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The insolvency of NewAge has now become much more intriguing.

John R. Wadsworth’s initial move after acquiring NewAge through a Purchase Asset Agreement in August is to file a lawsuit against the organization’s former management.

contract violation, self-serving sabotage, and extortion. a look into the demise of an MLM business that had touted yearly revenues of $500 million.

Defendants in NewAge’s lawsuit filed on October 7th include:

Before NewAge and Ariix merged, Frederick “Fred” Cooper, a former NewAge director and co-majority shareholder, served as the CEO and board chairman of Kwikclick.

Before the merger with NewAge, the President of NewAge and co-majority shareholder Mark Wilson

Kwikclick, a Delaware business led by NewAge CEO Brent Willis

For comparison, Ariix was purchased by NewAge in 2020.

In what is referred to as a “brazen plan,” the Defendants are charged in NewAge’s complaint with neglecting to safeguard Ariix’s assets after the acquisition. Ariix has large liabilities as well, but they weren’t revealed.

This allegedly went against the acquisition agreement between NewAge and itself.

In general, the Complaint portrays Fred Cooper (right) as somewhat of a dictator;

Cooper may not have an executive position inside the NewAge corporation, but traditional Ariix employees still believed Cooper had the power to direct corporate strategy.

Cooper’s regular attendance at company meetings and his misleading representation of himself as the chairman of the board during his many speaking engagements with Brand Partners—activities that went above and beyond his customary duties as a corporate director—all served to confirm this view. According to information and belief, Cooper charged NewAge for his appearance-related costs.

Employees at NewAge saw Cooper as co-CEO of the company alongside Brent Willis, even though he had no managerial power.

The reason why the defendant failed to safeguard Ariix’s property is due to him

When Zhang, a former employee of Ariix, received a full copy of the company’s ICONN software to use at Kwikclick.

The program known as ICONN belonged to Ariix, was created by Ariix employees at Ariix’s cost, and was owned by Ariix.

Zhang, who had served as Ariix’s chief information officer up until that point, was fired by the company in or around June 2020. Zhang began a new job as Chief Information Officer at Kwikclick after being fired by Ariix.

However, Zhang kept receiving his pay from Ariix long after he was ostensibly fired from the company.

Cooper instructed Ariix to keep paying Zhang’s salary based on knowledge and belief to help Cooper’s new business, Kwikclick.

Cooper gave the China-based Ariix software development team specific instructions to focus a lot of time and effort on creating the Kwikclick software.

Cooper only did this for the advantage of his brand-new business, Kwikclick.

According to knowledge and belief, Cooper gave Tyler Jones, a former employee of Ariix and NewAge’s vice president of legal following the merger, the task of drafting and backdating a fake contract between Ariix and Kwikclick about the ICONN source code.

Before NewAge bought Ariix, the fake agreement was not made known to NewAge.

To code for Kwikclick, NewAge allegedly spent $200,000 per month at one time.

Cooper bullied and threatened the NewAge staff members who spoke out against his proposal when they questioned if a licensing arrangement with Kwikclick was necessary.

According to a new executive. Kwikclick

was a ruse intended to obtain information on NewAge’s Brand Partners and utilize that knowledge to create a brand-new, rival MLM.

Nevertheless, NewAge went into a software license arrangement with Kwikclick in late 2021 without getting board consent.

Cooper and Willis signed the License Agreement on behalf of Kwikclick and NewAge, respectively.

Because the NewAge board of directors specifically reserved the right to ratify the agreement itself and did not do so, Willis and Cooper were aware that Willis lacked the jurisdiction to force NewAge to engage in the License Agreement.

Furthermore, KwikClick’s software allegedly differed from NewAge’s current program by only 5%.

The License Agreement’s conditions are not typical. They are very bad for NewAge and very good for Kwikclick.

For the life of the License Agreement, the License Agreement stipulated that NewAge would pay Kwikclick a license fee of $50,000 per month.

By the terms of the License Agreement, NewAge was also compelled to pay sizeable commissions on any goods that NewAge Brand Partners sold via the Kwikclick platform.

Moving on to disclosures, Defendants informed NewAge Ariix that it had $11 million in working cash before the transaction.

Ariix’s debt responsibility was $18 million.

The investigation of Cooper, who benefitted from the company’s demise, purchasing NewAge to avoid bankruptcy, is one intriguing piece.

Cooper’s refusal to sign a necessary non-disclosure agreement, his failure to show proof of money, and his refusal to agree to conditions that were acceptable to the Special Committee of the Board of Directors monitoring the sale process led to the end of negotiations with Cooper.

Instead, Cooper started establishing Kwikclick as NewAge’s unofficial replacement.

The public trading of Kwikclick’s shares started in 2022. Defendants Cooper and Wilson started issuing Kwikclick shares to NewAge executives, top Brand Partners, and global sales leaders.

These contributions were not disclosed to the NewAge board of directors.

According to information and belief, Cooper arranged for the transfer of Kwikclick shares to NewAge executives and Brand Partners to gain their allegiance, solicit their business, and provide them with incentives to encourage the usage of Kwikclick inside the NewAge organization.

Defendant Wilson informed the group of important Brand Partners present at an Orlando, Florida, Founder’s Club special emergency meeting on August 30, 2022, that both his and Cooper’s noncompete agreements would expire in November 2022.

Wilson announced to the group that he and Cooper will be “free agents” as of November 2022. The remaining members of the group were also “free agents,” Wilson informed the group.

These claims were made in breach of the restrictive covenants that Cooper and Wilson were subject to entice NewAge’s top Brand Partners (Founders Club members) to join a new company that Cooper and Wilson had founded to compete with NewAge.

Throughout August 2022, Cooper’s scheme intensified with the threat of “making whole” him and NewAge stockholders at whatever cost.

Phil Lewis, the operations executive who had formerly worked for Ariix and was now working for NewAge, informed John Wadsworth on or around August 31, 2022, that he had spent 10 hours with Cooper the previous day.

The “Ariix team” was “mobilizing,” according to Lewis, and the “team” intended to “leave as a group” unless all investors who lost money on NewAge shares were compensated.

Lewis allegedly warned Wadsworth that he would “lose the entire Ariix team” if he did not “make Fred [Cooper] an owner.”

Lewis warned Wadsworth that if he didn’t give Cooper 30% of the NewAge firm, Wadsworth would lose the other half of the company when Cooper departed.

Cooper’s idea was supported by Tim Sales (right), who is described as a “major Brand Partner for NewAge,” who also personally threatened Wadsworth.

Tim Sales, an important NewAge Brand Partner, warned Wadsworth on or around September 2, 2022, that “if you don’t make Fred an owner, or give Fred the Ariix business, everyone will go, and you will lose half of your investment.”

Early on, Sales was an Ariix Brand Partner. A significant portion of the sales of NewAge items is attributable to Sales and his downline Brand Partners.

The general manager of NewAge in Europe, Ishim Benallal (also known as Isham Benallal, right), took things to the next level by engaging in direct extortion.

Benallal informed Wadsworth on September 16, 2022, that if Cooper and Wilson were not given controlling ownership and a majority stake in the business that was formed to purchase NewAge’s assets through the bankruptcy procedure, all of the European Brand Partners would depart NewAge.

Benallal informed Wadsworth that if he so desired, he could eliminate NewAge’s European operations in three days.

Benallal urged NewAge’s European Brand Partners to “pull out your phone now and join up for Kwikclick; do it now!” during a presentation.

Benallal also disclosed to Wadsworth that Cooper had granted him 6 million shares in Kwikclick, meaning he was no longer required to work.

The claims above were “fabricated at the instruction or prompting of Cooper and Wilson and for their gain,” according to NewAge’s Complaint.

And of course, this was done at the expense of NewAge, which was essentially left without a plan as it entered bankruptcy.

In its case, NewAge charges the defendants with:

The unlawful meddling in contractual relationships (Cooper, Wilson, Willis, and Kwikclick)

fiduciary duty breach (Cooper, Wilson, and Willis across three separate counts)

violation of the merger agreement contract (Cooper and Wilson)

Fraud – merger contract (Cooper and Wilson)

License agreement fraud (Cooper and Kwikclick)

infringement of a licensing agreement (Kwikclick)

assisting in a fiduciary obligation violation (Kwikclick)

Defend Trade Secrets Act infraction (Cooper, Wilson, Willis, and Kwikclick)

unauthorized use of trade secrets (Cooper, Wilson, Willis, and Kwikclick)

violation of a non-compete and non-solicitation clause in a contract (Cooper)

infringement of a non-compete clause in a contract (Cooper and Wilson)

the unlawful meddling in contractual relationships (Cooper, Wilson, Willis, and Kwikclick)

conspiracy (Cooper, Wilson, Willis, and Kwikclick) (Cooper, Wilson, Willis, and Kwikclick)

unfair enlargement (Cooper, Wilson, Willis, and Kwikclick)

fraud committed by imposing constructive trust (Wilson, Willis, and Kwikclick)

Additionally, NewAge is asking for a declaration of ownership over the Kwikclick program, claiming to possess the source code.

Currently selling at $2, Kwikclick shares are down from their all-time high of $7.

According to NewAge’s complaint,

Approximately 53.4% of Kwikclick’s outstanding shares are still owned by Cooper.

Cooper served as Kwikclick’s CEO from about September 2022 to September 2023.

Cooper left his position as CEO of Kwikclick sometime in or around September 2022.

Kwikclick’s old website domain now points to “kwik.com,” indicating a rebranding by the business.

The registration for the private domain “kwik.com” was most recently updated on June 30th, 2022. In October 2021, Kwik’s official Facebook profile was created.

Kwik’s website traffic, as monitored by SimilarWeb, fluctuates somewhat; there were 6,700 visits in July, 30,000 in August, and 18,200 in September.

That traffic is dispersed among Israel, Italy, and France. Isham Benallal appears to be working on this:

This is shaping up to be a very intriguing case to follow, if Cooper, Wilson, and Willis don’t give in to pressure and settle.

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