BRVO.OB

[don]

mis-keyed: that should be CMNN, which popped yesterday. Don.

[fill_the_gap]

I still wonder why CCE backed out of 51%.  And it bothers me about the 3.25 million versus 4 million.

We'll never know, why not ask CCE for a reason, you're the man who talks a lot with IR   Thanks. I think management gave a credible explanation for the $3.25M versus $4M.
--------------------------------------------------------------------------------------------------------------------

David, I will do the dd and get back with you on this one.  Love the challenge.    -Jeff-
It may take awhile, but I will reply when information is gathered.

[David Randolph]

I still wonder why CCE backed out of 51%.  And it bothers me about the 3.25 million versus 4 million.

We'll never know, why not ask CCE for a reason, you're the man who talks a lot with IR   Thanks. I think management gave a credible explanation for the $3.25M versus $4M.
--------------------------------------------------------------------------------------------------------------------

David, I will do the dd and get back with you on this one.  Love the challenge.    -Jeff-
It may take awhile, but I will reply when information is gathered.

Thanks fill_the_gap 

Thanks a lot for sharing some of your experiences in the stock market Don, I loved it  I also plan to live 20 years plus at my current house, after changing 7 times since my son was born (and he's only 2 years old now).

Your asset allocation strategy is pretty conservative, as it should be for a fella of your age. I knew a man, who was already in his 50's, that put all his money and credit money in the stock market. Worse, he gambled on warrants. The result was that less than a year after he lost it all, about $300,000. The good thing is that he held is job, and it is a pretty good job 

Keep up Don, you're doing very well, I would be realized if I got to 60 and had done as much as you did.

Unfortunately BRVO couldn't hold the ascending trendline. It seems people really don't like private financing below the market price, even if like in BRVO's case it isn't for a quick profit.

Technically the stock now is standing at the 50% Fibonacci retracement level. It would be nice for it to hold current levels, if not the latest bull run couldn't produce a valid technical background for a meaningful advance.

I'll continue holding for the long term, based on fundamentals.

[fill_the_gap]

David,

Below is a copied post about what Roy said about not controlling BRVO.
I am not sure of how CCE is set up with other companies it distributes.

Roy explained at the N.Y.C. meeting

that Coke (KO) which owns about 35% of CCE had a problem with CCE controlling one of the brands it distributes. Coke thought that that would be a conflict, given that CCE wouldn't control other brands that it distributes. This seems completely plausible.

Who knows for sure.  I am buying the growth story for now. 

[David Randolph]

David,

Below is a copied post about what Roy said about not controlling BRVO.
I am not sure of how CCE is set up with other companies it distributes.

Roy explained at the N.Y.C. meeting

that Coke (KO) which owns about 35% of CCE had a problem with CCE controlling one of the brands it distributes. Coke thought that that would be a conflict, given that CCE wouldn't control other brands that it distributes. This seems completely plausible.

Who knows for sure. I am buying the growth story for now.

We hope that's the truth fill_the_gap, we have no reason to believe it isn't at this point. It seems plausible, as you say.

The company filed an 8-K yesterday, saying this:

«On November 28, 2005, the Company closed a funding transaction with
thirteen accredited institutional investors, for the issuance and sale of
40,500,000 shares of the Company's common stock to the Subscribers for
$20,250,000. The Company also issued five year warrants for the purchase of
an additional 15,187,500 shares of common stock at an exercise price of $0.80
per share. The securities are restricted and have been issued pursuant to an
exemption to the registration requirements of Section 5 of the Securities Act
of 1933 for "transactions of the issuer not involving any public offering"
provided in Section 4(2) of the Act and pursuant to a Regulation D offering.
The securities carry registration rights that obligate the Company to file a
registration statement within 45 days and have the registration statement
declared effective within120 days from closing.

      The net proceeds to the Company after the payment of transaction
expenses will be approximately $18.9 million. Approximately $5.8 million of
the net proceeds will used by the Company to redeem warrants for the purchase
of approximately 30.3 million shares of the Company's common stock, issued by
the Company in connection with prior financing transactions. In addition, the
Company will use the net proceeds from the financing for increased production
capacity, the launch of marketing campaigns, paying the finder's fee relating
to the Coca-Cola Enterprises Master Distribution Agreement and general
working capital purposes.»

This means they will buy back warrants previously issued representing 30.3 million shares of the company. This is like a stock buyback from the company, which is good news.

But, unfortunately, BRVO.OB is suffering like most OTCBB stocks at this point. Technically we have a support at $0.62, if that goes, the technical picture turns bearish again for BRVO.OB.

But I will continue holding for the long term, based on fundamentals, the upside potential is certainly worth the risk. I just need patience for the revenues and profit numbers to start coming in.

[bigdogs99999]

David,
You posted the news from the 8-K that I was about to post, but you did not analyze what it really means!!!  This news is fantastic!!!!!!!!!!!!!   BRVO issued and sold 40,500,000 shares for
$20,250,000.  Net proceeds of $18.9 million. BRVO plans to use $5.8 million to redeem warrants for approximately 30.3 million shares.   Do the math.  The increase in shares is 10,300,000 shares for which BRVO receives net $13.1 million (18.9 - 5. or about a $1.30 per share.  It is well above the market price, and provides the needed capital for putting product on the shelf.  This news is fantastic!!!     (The private investors also see the potential given the exercise price of the contingent garbage for the future).  The window of opportunity for BRVO is NOW given CCE and I am happy to see BRVO go so quickly to the market to get funds to ramp up production - I only wish that it had happened sooner so that production ramp-up was further along!  Why that did not occur is the real question to me given the projections of the company.

Dave

[huayilu]

David,
You posted the news from the 8-K that I was about to post, but you did not analyze what it really means!!!  This news is fantastic!!!!!!!!!!!!!   BRVO issued and sold 40,500,000 shares for
$20,250,000.  Net proceeds of $18.9 million. BRVO plans to use $5.8 million to redeem warrants for approximately 30.3 million shares.   Do the math.  The increase in shares is 10,300,000 shares for which BRVO receives net $13.1 million (18.9 - 5. or about a $1.30 per share.  It is well above the market price, and provides the needed capital for putting product on the shelf.  This news is fantastic!!!     (The private investors also see the potential given the exercise price of the contingent garbage for the future).  The window of opportunity for BRVO is NOW given CCE and I am happy to see BRVO go so quickly to the market to get funds to ramp up production - I only wish that it had happened sooner so that production ramp-up was further along!  Why that did not occur is the real question to me given the projections of the company.

Dave

Hi bigdogs99999,

I don't think your math is right.

I am not familiar with stock warrants, but it seems to me that $5.8 million is paid by company to compensate difference between execisable price at $0.80 of those warranted stocks and current market, which is:

30.3 millions shares x (0.80  execisable price - 0.61 market price ) = $ 5.76 million.

Please correct me.

[don]

Hi - re the warrants buy-back: let me throw my hat in the ring!
Huayilu, at first glance, I believe that your thinking/logic is inverted.
I have to go out now, but I will rework your calculation method and post my final opinion. Don.

[David Randolph]

Thanks for your posts, let's see 

BRVO sold 40,500,000 shares for $20,250,000, price was $0.50 a share. Net proceeds of this deal were $18,900,000. The company will use $5,800,000 to redeem warrants (buy back warrants) that represent 30,300,000 shares of the company - so price for these warrants was approximately $0.19.

Considering bigdoggs99999 math, which I think is accurate, the company will sell 40,500,000 (shares sold) - 30,300,000 (shares bought back) = 10,200,000 on balance.

It will receive $18,900,000 for the shares sold, and will pay $5,800,000 for the shares bought. So it will receive $18,900,000 - $5,800,000 = $13,100,000 for 10,200,000 shares, which is about $1.28 per share.

This deal seems to be so great, that is very odd why the stock has been down so much since it was announced. There may be 3 motives for this:

1) Why did someone sell warrants to buy 30,300,000 shares for just $5,800,000? That's just $0.19 a share. But, remember, warrants are rights to buy a stock at a given price, so the investors which held the warrants would have to pay more than $0.19 to buy the actual shares. The company bought the warrants at $0.19, but this way it won't sell any shares to these people, and possibly that money was already in the balance sheet, I don't know.

And now I'm starting to think, CCE had 30 million warrants to buy BRVO's shares at price $0.36. Are these 30 million warrants CCE's warrants?  Maybe fill_the_gap's explanation (or, Roy Warren explanation got by fill_the_gap, thanks a lot  ) to why CCE didn't take control of BRVO, that was that COKE didn't like CCE to have the majority control of a brand it distributes, will have further ramifications and CCE will be forced, by COKE and ethical reasons, to let go of any participation in BRVO.

If this were the case BRVO is paying $5.8M for something it sold for nothing in dollar terms, just the MDA agreement with CCE.

Speculation that CCE may be the seller of the 30 million warrants may be pushing BRVO's shares down ... it would be great if management clarifies who is the seller of the warrants.

2) Traders and investors just runaway when they get the «private placement red flag», and they don't look into details.

3) Generally OTCBB stocks are out of favor at this particular moment.

We have some questions now to some particular deals, but nothing in this changes my strategic long term view that BRVO will grow a lot in the coming years and the share price will reflect that.

I'll continue holding BRVO for the long term, though technically the stock is quite bearish now. Congrats to those 3 SOF Members who sold high 

[don]

David:
BRVO sold 40,500,000 shares for $20,250,000, price was $0.50 a share. Net proceeds of this deal were $18,900,000. The company will use $5,800,000 to redeem warrants (buy back warrants) that represent 30,300,000 shares of the company - so price for these warrants was approximately $0.19.
I think your facts are correct - but your conclusions are only partially so. As I interpret it, BRVO is saying that it will pay 19 cents per share in cash to acquire each warrant. We do not know:
(i) how many shares a warrant entitled to buy;
(ii) what is the exercise price.
I do think that it is most probably a good deal; since one way or the other, we will see the fully diluted number of shares go down by 30.3 million, as a consequence of the issue of 40.5 million shares. The net increase is as you have computed. Unfortunately, until this stock is followed by analysts, the cleverness of the deal is not going to impact on the market's preception of what the shares are worth. The market sees only one tangible thing - the issue of shares at 50 cents. Hence, I believe that 60 is the floor. This is my version  of a fundamental. 50 X 120% =60.  At this time, I do not place much importance on the TA. It is a coincidence that they are almost the same. all imho! Don.

[huayilu]

David and Don,

My previous post is totally wrong as I don't understand warrants. I read some articles today and found below statement from http://www.hashemian.com/financial-markets/stock-warrants-183.htm.

"warrants normally carry a long term limit before they expire (such as five or more years) and when exercised, new common shares are issued by the company to cover the transaction"

It seems that the Company has not issued outstanding common stocks for these warrants yet, but to buy back warrants. It costs company $0.19 to redeem each warrants. So this action won't reduce the oudstanding common stcoks.

[bigdogs99999]

And now I'm starting to think, CCE had 30 million warrants to buy BRVO's shares at price $0.36. Are these 30 million warrants CCE's warrants?  Maybe fill_the_gap's explanation (or, Roy Warren explanation got by fill_the_gap, thanks a lot  ) to why CCE didn't take control of BRVO, that was that COKE didn't like CCE to have the majority control of a brand it distributes, will have further ramifications and CCE will be forced, by COKE and ethical reasons, to let go of any participation in BRVO.

I also thought about the CCE warrants - odd coincidence if it is not those.  Plus CCE is having some serious upheavals that makes fill-the-gaps idea a good one. 

BRVO also has been issuing quite a number of convertible debentures that include warrants at very low prices (e.g., in January 2005 BRVO issued five-year warrants for the purchase of 9,200,000 shares at $0.16; May 2005, five-year warrants for purchase of 4,000,000 shares at $0.129).  Cleaning up any of these - especially since the convertible debentures give even more rights for more shares on the cheap - is a good practice.  BRVO is using its higher stock price to effectively increase the amount of money it raised, on a long term basis, back when its stock price was much lower. 

[boatguy]

Coca-Cola Enterprises CEO Leaving

   http://www.thestreet.com/_mktwrm/stocks/food/10255267.html?cm_ven=CBSM&cm_cat=FREE&cm_ite=NA

[don]

The 30.3 million shares/warrants buy-back:
may I paste together the various posts and - based on what I can determine (with Roy Warren's assistance, which is limited by confidentiality issues)- summarize the story so far, as:
somewhere in past EDGAR filings, you will find that Bravo issued convertible shares/debt or warrants which, at current market prices, are "in the money". Put in plain english, the holders of those warrants or debt have the right to convert at a price per share which is below current market prices.
Bravo has announced its intention to pay a premium ($5.8 million) to some of these holders, in order for them to surrender their warrants/debt for cancellation by the company. This premium of $5.8 million most probably, would be close to the book gains of the warrant holders (I could be wrong).  Let's assume that there are warrants to buy 30.3 million shares at 42. Those holders could exercise their right and require Bravo to issue new shares out of treasury for 42cents each. Bravo would get either (i) cash of 30.3mill x42cents =$12.726million   or (ii) extinguish convertible debt or convertible preference shares which are presently on its balance sheet. By that I mean that before the exercise/conversion, there would have been $12.726 million of debt or preference shares issued, and after the exercise/conversion there would be an extra 30.3 million common shares issued with an attributed total issue price of $12.726million.
Now this is the key aspect of the deal. Altho' those warrants do not appear on the balance sheet, they 'count' when proforma or fully diluted earnings per share are calculated, thereby driving down the earnings per share calculation. Also, when anyone competent is examining the company's capital structure, they will add these potential 30.3 million shares to arrive at the 'total' share count.
After this deal is done -  Bravo will have used the proceeds from issuing 11.6million shares (11.6million shares issued @50cents each to provide the 5.8million cash needed for the buy-back) to buy back the obligation it has to issue 30.3 million new shares. Conclusions:
1. Until you know the exercise price of the warrants to be bought back, you cannot calculate the supposed dollar value 'gain' arising out of the deal.
2. You can figure that the  dilutive factor of warrants issued will be reduced by an effective 18.7million shares (it took 11.6 million shares to remove 30.3 million shares reserved for issue.
3. Suffice it to say, as the majority on this board agree - this is intelligent deal-making by Roy Warren (and, possibly, his new CFO). Don.

[boatguy]

 Investor Common Shares Warrant Shares Purchase Price
---------------------------------- ------------- -------------- --------------


Lombard Odier Darier Hentsch & Cie 12,000,000 4,500,000 $ 6,000,000
Magnetar Capital Master Fund, Ltd. 10,000,000 3,750,000 $ 5,000,000
Kings Road Investments Ltd. 5,500,000 2,062,500 $ 2,750,000
Radcliffe SPC, Ltd. 5,500,000 2,062,500 $ 2,750,000
Lagunitas Partners LP 1,256,316 471,119 $ 628,158
Gruber & McBaine International 343,684 128,881 $ 171,842
Jon D and Linda W Gruber Trust 400,000 150,000 $ 200,000
JMG Triton Offshore Fund, Ltd. 800,000 300,000 $ 400,000
JMG Capital Partners, LP 800,000 300,000 $ 400,000
Capital Ventures International 1,200,000 450,000 $ 600,000
UBS O'Connor LLC PIPES Corporate
Strategies Master Limited 1,200,000 450,000 $ 600,000
Whalehaven Capital Fund Limited 1,000,000 375,000 $ 500,000
Alpha Capital 500,000 187,500 $ 250,000
---------- ---------- -----------

TOTAL 40,500,000 15,187,500 $20,250,000