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Experience
President
JSB Distribution Co.
March 2003 – Present (11 years 9 months)
Vice-President Sales & Marketing
Mr. Checkout Distributors, Inc.
2010 – 2014 (4 years)North America
For over 20 years, Joe has been involved in Sales, Marketing and/or Distribution to the retail market. By bringing a high level of Integrity, hard work and “A Customer First” Attitude Joe has been able to not only create new customer relationships, but a vast amount of industry colleagues that he considers to be friends. With experience ranging from warehouse, route sales, management and business owner, Joe understands what it takes to help bring your product to the masses and will always do his best to guide you in that direction. Joe resides in Southern California with his family.
Sales Director
Quantum Event Hosting
2011 – 2011 (less than a year)
Sales Manager
Liberty Woods International
2006 – 2007 (1 year)
Account Exec
Tele-Media of SoCal, LLC
1998 – 1999 (1 year
Joe Barnum
JSB Distribution Co. President - Hangover Joe's (HJOE) & GIT-R-DONE Energy Master Broker
Greater Los Angeles AreaWholesale
And I will post what I find
I will call veal at lunchtime to get an explanation of what happened with the Tranfer Agent. .And why we have another lawsuit
This not a game . This is about money
YOU TELL US
Hjoe please explain to us this problem and how you are going to fix it.
This company need to take care of business. FasT
They are currently not in good standing with us so we don’t give out anything.
Meagan D Pierson
Client Services
Corporate Stock
SENT MORE EMAILS TO t/A
T/A WONT GIVE OUT SHARE COUNT AT ALL
At this time I cannot give out information on Hangover Joe’s. Please contact the company’s investor relations.
Best,
Meagan D Pierson
Client Services
Corporate Stock Transf
missed football
I dONT HAVE TIME TO WATCH A SHOW FOR ONE HOUR AND SEE NOTHING
NOTHING ABOUT HJOE ON WWE
If the Chairman of the company would help with another loan.We are golden
WE need more of this
NOTE 5 – RELATED PARTY TRANSACTIONS
Promissory Note Payable, Related Party
The Chairman of the Company’s board of directors has advanced funds to the Company from time to time for working capital. As of September 30, 2014 and December 31, 2013, amounts payable to this individual were $116,421 and $89,422, respectively. These advances were previously non-interest bearing, unsecured, and due on demand. On March 1, 2013, the Company converted the outstanding advance amount of $89,422 into a promissory note, and this individual advanced an additional $27,000 to the Company in January, 2014. Interest at the rate of 5.5% per annum is compounded and charged annually. Principal payments in the amount of $14,966 and accrued interest were to be paid in nine installments, with the first payment due on June 15, 2013. No payments have been made through September 30, 2014. Interest expense on this note as of and for the nine months and quarters ended September 30, 2014 and 2013 was approximately $4,100 and $1,600, respectively.
I will be buying at lower prices
ost # of 8049
e been no material changes to the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Other than the following, all sales of unregistered equity securities that occurred during the period covered by this report have been previously disclosed in our current report on Form10-K filed on April 21, 2014, our current reports on Form10-Q filed on May 20, 2014, August 18, 2014 and other current reports on Form 8-K filed during the fiscal year to dater.
On September 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 7,000,000 shares.
On September 28, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 9,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 21, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 8,700,000 shares.
On September 3, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 16, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 23, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On October 7, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 5,206,806 shares.
On October 21, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 12,000,000 shares.
On September 30, 2014, LG Capital Funding LLC converted $8,500 of their $26,500 promissory note dated March 31, 2013 for 4,235,459 shares.
On October 7, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 13,503,549 shares
On October 7, 2014, JSJ Investments Inc. converted $14,796 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, JSJ Investments Inc. converted $19,580 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 13,503,549 shares.
On October 1, 2014, JMJ Financial converted $20,999 of their promissory note dated June, 2013 for 8,300,000 shares.
On October 13, 2014, JMJ Financial converted $18,288 of their promissory note dated June, 2013 for 9,500,000 shares.
On October 21, 2014, JMJ Financial converted $17,165 of their promissory note dated June, 2013 for 8,916,795 shares.
On September 26, 2014, Asher Enterprises Inc. converted $8,000 of their promissory note dated January, 2014 for 3,488,372 shares.
On September 29, 2014, Asher Enterprises Inc. converted $7,000 of their promissory note dated January, 2014 for 5,000,000 shares.
On September 30, 2014, Asher Enterprises Inc. converted $7,500 of their promissory note dated March, 2014 for 3,187,500 shares.
On November 3, 2014, the Company issued 20,583 Series D Convertible Preferred Shares each to the two principals of West Coast Capital in exchange for services valued at $12,500.
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act") for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transactions did not involve a public offering, Each of the investors are accredited investor, had access to information about the Company and their investment, took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securitie
Nice News
ngover Joe’s Holding Corporation. (OTCQB: HJOE) The maker of “The Hangover Recovery Shot” and developers of an innovative state of the art proprietary “Git-R-Done-Energy Shot” with Git-R-Done Productions, Inc. and Larry the Cable Guy released its 10-q for the third quarter 2014. While the Company showed losses at similar rates to the historic norm, the company is pleased to announce it has the sales cycle to retailers back on track which is a huge step in the process of bringing the company to success. With continued improvement in this arena, this gives the company more tools to solve its remaining challenges. For the quarter ended September 30, 2014 the Company reported approximately $50,000 in net sales under generally accepted accounting principles and an additional $35,000 in deferred revenue on product shipments that occurred late in the quarter that we have not yet received payment for bringing total sales to right at $85,000. This includes test markets from which we are seeing encouraging results and in some cases from larger chains. The company reports it is receiving reorders from older customers as well as newer customers and has achieved a healthy geographic spread for its products as the brand building process is underway.
“I, for one, am very pleased with the 7000 plus percent increase in net sales for this quarter in comparison with the last quarter this year ending June, 30, 2014,” said Matthew Veal, CEO. “Of course there are areas for further improvement, but this confirms to us and hopefully to our shareholders, that we have products people will buy and will continue to buy. This is just the start for us….”
The Git-R-Done-Energy Shot is now out in Canada with Jimmy Zee, our Canadian distributor who sells into over 5K stores in Canada. Mr. Zee reordered product from us this quarter and reports the product is selling very well in Canada. Our plan is to launch the brand nationwide in Canada in 2015 and already some of Canada’s larger chains have expressed serious interest into carrying Git-R-Done Energy in 2015. We have also had some of America’s largest retail chains come to us for consideration into their 2015 Planograms said Shawn Adamson Co-Founder of Hangover Joe’s and head of marketing and sales. We are getting a lot of interest from many different sectors of the market, from convenience stores to grocery stores and also from other retailers that carry health and beauty products. This is a brand that is very functional and has huge appeal to both retailers and consumers. It’s also exciting to be able to report that some of the nation’s largest retailers have asked us for samples of other flavors which are in development right now for their consideration along with our core product in 2015. We received positive data during our test marketing during our soft launch and had positive data to provide to retailers that requested this information. Git-R-Done Energy is a new brand and is performing very well for a new product just introduced to the market. We are extremely excited about where this product can go and deeply appreciate Larry The Cable Guy for his proactive involvement in helping promote and move the brand forward
On September 27, 2014, a former contractor of the Company filed suit against the Company for an unpaid account. The plaintiff is seeking approximately $125,000 from the Company. the Company cannot determine the likelihood of an outcome or a range of possible damages. The Company intends to vigorously defend the lawsuit on the grounds that the contractor never performed any services under the contract and prosecute its cause of action.
NOTE 7 – STOCKHOLDERS’ DEFICIT
Preferred stock
The Company is authorized to issue up to 10,000,000 shares of Preferred stock, par value $0.10 per share. The Articles of Incorporation provide that the Preferred stock may be issued from time to time in one or more series and gives the Board of Directors authority to establish the designations, preferences, limitations, restrictions, and relative rights of each series of Preferred Stock.
23
NOTE 7 – STOCKHOLDERS’ DEFICIT (CONTINUED)
Series A Preferred Stock
Of the 10,000,000 shares of the Company’s authorized Preferred Stock, ($0.10 par value per share), 425,000 shares are designated as Series A Convertible Preferred Stock (the “Series A Preferred”). The holders of outstanding shares of Series A Preferred were entitled to notice of any shareholders’ meeting and to vote as a single class with the common stock upon any matter submitted for approval by the holders of common stock, on an as-converted basis, as defined. Each share of Series A Preferred had eight votes per share. If any dividend or distribution was declared or paid by the Company on common stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series A Preferred were entitled to participate with the holders of common stock in such dividend or distribution, as defined.
Additionally, upon liquidation, dissolution or winding up on the Company, the Series A Preferred shareholders were entitled to be paid together with the common shareholders on a pro-rata basis. The Series A Preferred holders had the right to convert such shares of Series A Preferred in whole or in part, at any time, or from time-to-time upon written notice to the Company subject to the terms set forth below. The Series A Preferred may, or shall, be converted into shares of the Company’s authorized but unissued common stock on the following bases: (i) At the option of the holder, at any time before the “Financial Milestone” is met each share of Series A Preferred shall be convertible into eight shares of the Company’s common stock. (ii) Upon the “Financial Milestone” being met, each share of Series A Preferred shall automatically be converted into 28.8 shares of the Company’s common stock. (iii) If the “Financial Milestone” has not been met by October 8, 2013, each share of Series A Preferred then outstanding shall automatically be converted into eight shares of the Corporation’s Common Stock.
On October 8, 2013, pursuant to terms of the Series A Preferred Stock designation, 87,501 shares of Series A preferred were subject to an automatic conversion into 700,008 shares of the Company’s common stock. On October 8, 2013, each holder of record of shares of Series A Preferred is deemed to be the holder of record of common stock issuable upon the conversion not withstanding that common share certificates have not been delivered to the holders. As of September 30, 2014 and December 31, 2013, common shares have not yet been issued pursuant to the conversion.
Series C Preferred Stock
In April 2013, the Board of Directors approved the authorization of 5,000,000 shares of Series C Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred shares have voting rights equal to three votes per share and contain an automatic conversion into 15,000,000 common shares immediately upon the Company obtaining shareholder approval of, and filing with the Colorado Secretary of State, an increase in authorized common stock to at least 200,000,000 shares, which was effected in June, 2014.
In April 2013, the Company executed a term sheet with an accredited investor (“Investor”) for a proposed total investment of $1,000,000 in the Company to be exercised in two separate $500,000 units. In exchange for each unit of $500,000, the investor shall receive 15,000,000 shares of common stock for the first tranche and 5,000,000 shares of Series C Preferred Stock convertible into 15,000,000 shares of common stock for the second tranche, and warrants to acquire an aggregate of 500,000 shares of common stock at $0.12 per share for a period of five years. The first tranche of $500,000 was to be deposited on or before May 17, 2013 in exchange for 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. The second tranche of $500,000 was to be deposited on or before September 20, 2013 in exchange for 5,000,000 shares of Series C Preferred Stock convertible into 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. As of December 31, 2013, the Company received $342,500 toward the first investment tranche. In January, 2014, the company issued to the investor 10,275,000 common shares, and the investor advanced an additional $30,000 to the Company.
The common shares and underlying common shares attributable to the Series C Preferred Stock and warrants will have piggyback registration rights that will be triggered if the Company files a registration statement with the Securities and Exchange Commission for the resale of other securities. The warrants may be redeemed by the Company if certain conditions are met, including that the shares underlying the warrants have been registered and the common stock trades at or above $0.20 per share for 20 trading days. The Investor will be entitled to one seat on the Company's Board of Directors, and certain other development and distribution rights, as defined.
24
NOTE 7 – STOCKHOLDERS’ DEFICIT (CONTINUED)
Surrender of Founder’s shares
In January 2013, a shareholder of the Company surrendered 4,500,000 shares of common stock to the Company’s treasury for no consideration. The same shareholder surrendered an additional 26,013,736 shares in January 2014. These shares were surrendered to the Company in order to increase the Company’s number of authorized shares available for future issuances. On June 30, 2014 the Company reissued substantially all of these shares after increasing the Company’s authorized common shares to 500,000,000.
Dissenting Shareholder
In connection with the Acquisition, an HOJ shareholder holding the equivalent of 612,953 shares of common stock asserted his rights as a dissenting shareholder under the Colorado Business Corporation Act and demanded payment for the fair value amount of his shares as of the date of the Acquisition. In July 2012, the Company estimated the fair value of these shares to be $20,000 and recorded a payable to shareholder in the amount of $20,000 and corresponding decrease to Equity.
In February 15, 2013, the Company entered into a settlement agreement with the dissenting HOJ shareholder. Under the terms of the settlement agreement, the Company agreed to pay $5,000 cash at closing and $15,000 plus accrued interest at 5% within 90 days. The Company also issued 50,000 shares of the Company’s common stock. The fair value of the common stock at the date of settlement was $5,500.
Stock options
Under the 2009 Stock Option Plan (the “2009 Plan”), the Company may grant non-statutory and incentive options to employees, directors and consultants. The exercise prices of the options granted are determined by the Plan Committee, whose members are appointed by the Board of Directors, and the exercise prices are generally to be established at the estimated fair value of the Company's common stock at the date of grant. Options granted have terms that do not exceed five years. The Company has reserved 650,000 shares for issuance under the 2009 Plan.
In July 2012, the Company’s shareholders approved the 2012 Stock Option Plan (the “2012 Plan”). Under the 2012 Plan, the Company may grant stock options, restricted and other equity awarded to any employee, consultant, independent contractor, director or officer of the Company. The Company has reserved 4,500,000 shares for issuance under the 2012 Plan. As of September 30, 2014, stock options to purchase 2,266,190 shares of common stock are outstanding under the 2012 Plan.
The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton valuation model. Expected volatility is based upon weighted average of historical volatility over the expected term of the option and implied volatility. The expected term of stock options is based upon historical exercise behavior and expected exercised behavior. The risk-free interest rate is based upon implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The dividend yield is assumed to be none as the Company does not anticipate paying any dividends in the foreseeable future.
25
NOTE 7 – STOCKHOLDERS’ DEFICIT (CONTINUED)
The following is a summary of stock option activity for the quarter ended September 30, 2014:
Options
Shares Under Option
Weighted Average Exercise Price
Weighted Average Remaining Contractual Life
Aggregate Intrinsic Value
Outstanding at January 1, 2014
2,266,190
$
0.06
$
1.63
$
-0-
Granted
-
-
Exercised
-
-
Forfeited / Cancelled
-
-
Outstanding at September 30, 2014
2,266,190
$
0.06
$
1.63
-0-
Vested or expected to vest at September 30, 2014
1,500,000
0.08
2.20
-0-
Exercisable at September 30, 2014
1,500,000
$
0.08
$
2.20
-0-
The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company’s common stock on September 30, 2014, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on September 30, 2014.
No stock-based compensation was recognized during the year ended December 31, 2013.
The following table summarizes the activity and value of non-vested options as of and for the nine months ended September 30, 2014:
Number of
Options
Weighted Average
Grant Date
Fair Value
Non-vested options at January 1, 2014
766,190
$
0.03
Granted
-
-
Vested
-
-
Forfeited/cancelled
-
-
Non-vested options at September 30, 2014
766,190
0.03
As of September 30, 2014, the Company does not expect outstanding options to acquire 766,190 shares of common stock will vest due to the performance criteria outlined in the option agreement. Compensation cost is revised if subsequent information indicates that the actual number of options vested is likely to differ from previous estimates.
26
NOTE 7 – STOCKHOLDERS’ DEFICIT (CONTINUED)
Warrants:
Summarized information about warrants outstanding and exercisable at September 30, 2014 is as follows:
Warrants
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
Outstanding at January 1, 2014
3,324,764
$
0.04
-
-
Issued for services
5,000,000
$
0.02
- -
Issued with note payable
417,662
$
0.08
- -
Forfeited/Cancelled
(3,064,764
)
$
0.03
- -
Outstanding at September 30, 2014
5,667,662
$
0.03
$
13.05
$
-
Vested or expected to vest at September 30, 2014
5,667,662
$
0.03
$
13.05
$
-
Exercisable at September 30, 2014
5,667,662
$
0.03
$
13.05
$
-
In April 2012, the Company granted a warrant to a sales consultant and director of the Company to purchase up to 6,129,528 shares of common stock in connection with a two-year service agreement. This warrant has a three-year term and an exercise price of $0.0326 per share with 3,064,764 shares vesting each on January 1, 2013 and January 1, 2014 if the Company’s sales exceeded certain thresholds in 2012 and 2013, respectively. On January 1, 2013, the board of directors concluded the sales target for 2012 was not met and warrants to purchase 3,064,764 shares of Company common stock were cancelled. In January, 2014, Management concluded that the performance criteria and sales thresholds for 2013 were not met and accordingly no stock-based compensation has been recognized and warrants to purchase 3,064,764 shares of Company common stock were cancelled.
In August, 2012, the Company issued a warrant for 100,000 shares. The warrants have a three year term and an exercise price of $.11 per share with immediate vesting.
In February and March 2013, the Company granted a warrant to an investor relations firm to purchase up to 150,000 shares of common stock that vested immediately. The warrants have a three-year term and an exercise price of $0.11 and $.09 per share, and $0 and $11,574 of stock based compensation related to this warrant and is recorded in general and administrative expenses during the quarter ended September 30, 2014 and 2013, respectively.
In January, 2014, the Company issued a warrant for 5,000,000 shares to an investor under a consulting arrangement. The warrants have a fifteen year term and an exercise price of $.02 per share with immediate vesting, and the services were valued at $100,000, accordingly.
In August, 2014, the Company issued 417,662 warrants to an investor in connection with the issuance of a note payable. The warrants have a three year term and an exercise price of $.08 per share, and are exercisable at any time on or after the note issuance date and on or before the note termination date of the note payable connected to this warrant, and the warrant was valued at $6,000.
On October 4, 2014, 10,000 warrants with an exercise price of $.40 per share expired.
27
NOTE 8 – INCOME TAXES
Deferred tax assets and liabilities have been determined based upon the differences between the financial statement amounts and the tax bases of assets and liabilities as measured by enacted tax rates expected to be in effect when these differences are expected to reverse. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Net operating loss (“NOL”) carry forwards are the most significant component of the Company’s deferred tax assets; however, the ultimate realization of the deferred tax assets is dependent upon generation of future taxable income. Management considers past history, the scheduled reversal of taxable temporary differences, projected future taxable income, and tax planning strategies in making this assessment. Utilization of our NOL carry forwards would reduce our federal and state income tax liability incurred. Based on management’s assessment, a 100% valuation allowance is recorded at September 30, 2014 and December 31, 2013.
The provision (benefit) for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate, expected to be applicable for the full fiscal year. For the first quarters ended September 30, 2014 and 2013, the Company did not record any income tax benefit due to the recognition of a full valuation allowance.
NOTE 9 – SUBSEQUENT EVENTS
On October 12, 2014 GEL Properties, LLC and Union Capital, LLC did not purchase their third tranches under the TCA Settlement Agreement (See Note 3) as there were not sufficient authorized unissued shares in the Company's treasury to meet the reserve requirements under the Settlement Agreement. No assurance can be made that the Company will be able to increase the authorized shares to the necessary amount, or if we were able to, that the settlement could be reinstituted or brought back what terms would be worked out. Accordingly, the TCA settlement is in default.
On November 5, 2014, the Company signed a consulting contract with West Coast Capital Consultants, Inc. (“Green Giant”) whereby Green Giant would represent it in search of funding under the United States Citizenship and Immigration Services Immigrant Investor Program known as EB-5. Under our arrangement, the Company paid an initial payment of $5,000 and issued 20,583 Series D Preferred Shares which are convertible into 100 shares of common stock each to the two principals of Green Giant.
28
ITEM 2. MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Statement about Forward-Looking Statements
This Form 10-Q contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “hopes,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, including projections under our licensing and distribution arrangements, the Company’s anticipated growth potential in its business, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified under “Risk Factors” in our Form 10-K for the year ended December 31, 2013. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.
The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
Background
The term the “Company” as used herein is intended to refer to the Hangover Joe’s Holding Corporation and its wholly owned subsidiary, Hangover Joe’s Inc. The Company has a limited operating history and there will be limited continuing impact regarding these operations, and the Company cannot provide any assurance it will be able to raise funds through a future issuance of equity or debt to carry out its business plan.
Plan of Operation
The Company sells two ounce energy shots to retailers that typically place them near the counters in convenience and other stores. Our main product has been an all-natural, two-ounce beverage, formulated to help relieve the symptoms associated with alcohol induced hangovers – the Hangover Recovery Shot. The Hangover Recovery Shot is also an officially licensed product of The Hangover movie series from Warner Brothers. The Company has registered the trademark “Hangover Joe’s Get Up & Go” with the U.S. Patent and Trademark office. The assets consist of intellectual property relating to Hangover Joe’s Recovery Shot, including but not limited to a license agreement dated July 19, 2011, between the LLC and Warner Bros. Consumer Products, Inc. The license agreement permits HOJ to use the character names, costumes, artwork logos, and other elements depicted in the 2009 movie “The Hangover” during the term of the license agreement, which expired January 31, 2013. The Company then negotiated an extension to this license agreement through January, 2016.
The Company sells its products primarily to convenience stores, liquor stores and grocery stores through distribution agreements, as well as through online internet sales. The Company began selling its products in February 2011. HOJ is actively seeking to expand the distribution of its product, the Hangover Joe’s Recovery Shot, and our additional energy shot, Larry the Cable Guy’s Git-R-Done energy shot, which was added to our product line during 2014.
Results of Operations
The Company’s operations have been curtailed for the quarter ended September 30, 2014 compared to the quarter ended September 30, 2013 due to its lawsuit with TCA and sales has been limited to small orders from our website while we reorganize our finances.
Three Months Ended September 30, 2014 and September 30, 2013
For the three months ended September 30, 2014, we experienced a consolidated net loss of approximately $592,000 compared to a consolidated net loss of approximately $400,000 during the comparable period last year. Net sales increased and gross profits increased $44,000 or 1070% and $23,000 or 2607%, respectively from the comparable period last year. These increases were offset by a approximately $160,000 increase in general and administrative expenses from the comparable period last year.
29
Net Sales
During the three months ended September 30, 2014, the Company generated approximately $49,000 in net sales compared to $4,000 in net sales in the comparable period last year. The $44,000 or 1070% increase from the comparable period last year was primarily due to inability to ship orders to new distribution partners we had generated in the last two years due to the TCA lawsuit. The Company did temporarily settle the lawsuit after the in August 2014 and still needs to raise capital and has targeted a list of major customers it intends to pursue or bring back, but there is no assurance we can accomplish all or part of these plans.
Cost of Goods Sold
Cost of goods sold, which includes product costs, packaging materials, and product royalties, increased in the aggregate from approximately $3,000 for the three months ended September 30, 2013 as compared toapproximately $25,000 for the same period this year. As a percentage of sales, cost of sales decreased from 79% of sales for the quarter ended September 30, 2013 to 51% for the quarter ended September 30, 2014. This increase represented increased sales during the quarter.
Gross Profit
During the three months ended September 30, 2013, the Company realized a gross profit of approximately $1,000 or 21% of net sales, as compared to the quarter ended September 30, 2014, a gross profit of approximately $24,000, or 49% of net sales. These cost of goods sold included increasing sales levels as discussed above.
Sales & Marketing Costs
Sales & marketing costs decreased approximately $13,000 or 9% to approximately $133,000 for the three months ended September 30, 2014 as compared to approximately $146,000 for the comparable period last year. This decrease was primarily due to decreased sales salaries and consulting expense, trade shows, and graphic design costs in this area, as explained by the factors discussed above.
General & Administrative Expenses
General and administrative expenses increased approximately $160,000 or 79% to $363,000 for the three months ended September 30, 2014 as compared to approximately $202,000 for the same period last year. The increase was due to payments using stock in lieu of to incur charges due to our financial condition under terms established in a prior year when our stock prices were lower ad the effect of guaranteed minimum royalties on our contract with Larry the Cable Guy.
Nine Months Ended September 30, 2014 and September 30, 2013
For the nine months ended September 30, 2014, we experienced a consolidated net loss of approximately $1,631,000 compared to a consolidated net loss of approximately $1,692,000 during the comparable period last year. Net sales and gross profits each decreased approximately $272,000 and $45,000 or 84% and 64%, respectively from the comparable period last year. These decreases were offset by a $102,000 decrease in operating expenses from the comparable period last year.
Net Sales
During the nine months ended September 30, 2014, the Company generated approximately $50,000 in net sales compared to $322,000 in net sales in the comparable period last year. The $272,000 or 84% decrease in net sales from the comparable period last year was primarily due to our inability to ship product as a result of the TCA lawsuit discussed earlier. The Company has reviewed its sales channels, and while we did incur drops in comparison to the second half of the prior year, we believe new channels can be opened to supplement what we have and replace some of the business we no longer have, but we believe additional marketing resources and a complete settlement of the TCA settlement will be needed to build our customer base to its full potential.
30
Cost of Goods Sold
Cost of goods sold, which includes product costs, packaging materials, and product royalties, decreased in the aggregate from approximately $252,000 for the nine months ended September 30, 2013 as compared to approximately $25,000 for the same period this year. As a percentage of sales, cost of sales decreased from 78% of sales for the nine months ended September 30, 2013 to 50% for the nine months ended September 30, 2014. This decrease was primarily due to guaranteed minimum royalty obligations incurred with sales limited due to the TCA lawsuit discussed above.
Gross Profit
During the nine months ended September 30, 2014, the Company realized a gross profit of approximately $25,000 or 50% of net sales compared to $70,000 or 22% of net sales during the same period last year. The limitations on sales while we resolved the TCA lawsuit, as also affected by the royalties resulted in the overall increase in gross profit in percentage terms during the nine months ended September 30, 2014.
Sales & Marketing Costs
Sales & marketing costs decreased approximately $174,000 or 30% for the nine months ended September 30, 2014 when the total was approximately $399,000 as compared to approximately $573,000 for the nine months ended September 30, 2013. This decrease was due to reduced sales as described above.
General & Administrative Expenses
General and administrative expenses increased approximately $71,000 or 8% to approximately $969,000 for the nine months ended September 30, 2014 as compared to approximately $898,000 for the same period last year. This increase is due to the effect of guaranteed minimum royalties.
Material Changes in Financial Condition; Liquidity and Capital Resources
The Company’s consolidated financial statements for the three months ended September 30, 2014, have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Report of our Independent Registered Public Accounting Firm on the Company’s consolidated financial statement as of and for the year ended December 31, 2013, and the three months ended September 30, 2014 includes a “going concern” explanatory paragraph which means that the auditors stated that conditions exist that raise doubt about the Company’s ability to continue as a going concern.
Cash Flows
During the nine months ended September 30, 2014, we used proceeds from the borrowing of approximately $653,000 to fund our operations whereas during the comparable period in 2013, when we used borrowings from our credit facility, net of repayment of other obligations, of $801,000 to fund our operations. Cash as of September 30, 2014 was approximately $48,000 as compared to approximately $3,000 at December 31, 2013.
Cash flows used in operating activities for the nine months ended September 30, 2013 was approximately $667,000 as compared to $576,000 for the comparable period last year. This increase in cash used in operations was primarily due to the financial issues discussed above.
Cash flows provided by investing activities were zero for both the nine months ended September 30, 2013 and the nine months ended September 30, 2014.
Cash flow provided by financing activities for the nine months ended September 30, 2013 was approximately $712,000 compared to cash provided of approximately $577,000 for the comparable period last year. This was due to the above referenced net borrowings under the credit facility in 2013 discussed above offset by amounts paid off on other inventory credit arrangement.
31
Capital Resources
As of September 30, 2014, we had cash and cash on hand of approximately $48,000 and a working capital deficit of $2,746,000 as compared to cash and cash on hand of approximately $3,000 and working capital deficit of approximately $2,634,000 as of December 31, 2013. The improvement in our liquidity and change in working capital were primarily the result of a settlement of stock subscriptions by issuing shares to an investor in the quarter ended September 30, 2014.
Although the Company has generated revenue through the sale of its products, the Company’s cash flow has not been sufficient to cover its operating expenses and the Company has had to rely upon proceeds from borrowings and from the sale of common stock through private placements to fund its operations. During the nine months ended September 30, 2014, the Company received gross proceeds of $653,000 under its various borrowings. We anticipate that we will need to rely on sales of our securities in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will be able to complete any additional sales of our equity securities or that we will be able arrange for other financing to fund our planned business activities. If we are unable to fund future operations by way of financing, including public or private offerings of equity or debt securities, our business, financial condition and operating activities will be adversely impacted.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, net sales or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.
Recent Accounting Pronouncements
The Company reviews new accounting standards as issued. Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company’s consolidated financial statements.
Critical Accounting Policies
There have been no changes to the Company’s critical accounting policies in the nine months ended September 30, 2014, from those contained in the Company’s 2013 Annual Report on Form 10-K.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting Company, we are not required to include disclosure under this item.
Item 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of September 30, 2014, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that because of material weaknesses in our internal control over financial reporting, as described in the Company’s Annual Report on Form10-k for the year ended December 31, 2013, that our disclosure controls and procedures were not effective as of September 30, 2014.Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
There were not any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated by the SEC under the 1934 Act) during the three months ended September 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
32
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time the Company may be involved in various litigation matters, which arise in the ordinary course of business. Except as previously disclosed, there is no litigation that management believes will have a material impact in the financial position of the Company.
Item 1A. RISK FACTORS
There have been no material changes to the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Other than the following, all sales of unregistered equity securities that occurred during the period covered by this report have been previously disclosed in our current report on Form10-K filed on April 21, 2014, our current reports on Form10-Q filed on May 20, 2014, August 18, 2014 and other current reports on Form 8-K filed during the fiscal year to dater.
On September 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 7,000,000 shares.
On September 28, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 9,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 21, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 8,700,000 shares.
On September 3, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 16, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 23, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On October 7, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 5,206,806 shares.
On October 21, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 12,000,000 shares.
On September 30, 2014, LG Capital Funding LLC converted $8,500 of their $26,500 promissory note dated March 31, 2013 for 4,235,459 shares.
On October 7, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 13,503,549 shares
On October 7, 2014, JSJ Investments Inc. converted $14,796 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, JSJ Investments Inc. converted $19,580 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 13,503,549 shares.
On October 1, 2014, JMJ Financial converted $20,999 of their promissory note dated June, 2013 for 8,300,000 shares.
On October 13, 2014, JMJ Financial converted $18,288 of their promissory note dated June, 2013 for 9,500,000 shares.
On October 21, 2014, JMJ Financial converted $17,165 of their promissory note dated June, 2013 for 8,916,795 shares.
On September 26, 2014, Asher Enterprises Inc. converted $8,000 of their promissory note dated January, 2014 for 3,488,372 shares.
On September 29, 2014, Asher Enterprises Inc. converted $7,000 of their promissory note dated January, 2014 for 5,000,000 shares.
On September 30, 2014, Asher Enterprises Inc. converted $7,500 of their promissory note dated March, 2014 for 3,187,500 shares.
On November 3, 2014, the Company issued 20,583 Series D Convertible Preferred Shares each to the two principals of West Coast Capital in exchange for services valued at $12,500.
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act") for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transactions did not involve a public offering, Each of the investors are accredited investor, had access to information about the Company and their investment, took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
33
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Item 6. EXHIBITS
Exhibit No.
Title
2.1
Agreement and Plan of Merger and Reorganization dated July 25, 2012 by and among Accredited Members Holding Corporation, AMHC Merger Corp., and Hangover Joe’s Inc., Incorporated by reference from Form 10-Q for the quarter ended September 30, 2012 and filed on November 14, 2012.
2.2
Purchase and Indemnification Agreement dated July 27, 2012 by and among Accredited Members Holding Corporation, Hangover Joe’s Inc., Accredited Members, Inc., AMHC Managed Services, Inc. and World Wide Premium Packers, Inc., Incorporated by reference from Form 10-Q for the quarter ended September 30, 2012 and filed on November 14, 2012.
3.1.1
Articles of Incorporation. Incorporated by reference from Form SB-2 Registration Statement filed on January 29, 2007.
3.1.2
Amendment to Articles of Incorporation. Incorporated by reference from Form 10-Q for the quarter ended March 31, 2010 and filed on May 17, 2010.
3.1.3
Amendment to the Articles of Incorporation. Incorporated by reference from Form 8-K dated December 15, 2010, and filed on December 20, 2010.
3.1.4
Amendment to the Articles of Incorporation. Incorporated by reference from Form 10-Q for the quarter ended June 30, 2012 and filed on August 14, 2012
3.1.5
Amendment to the Articles of Incorporation. Incorporated by reference from Form 10-Q for the quarter ended June 30, 2012 and filed on August 14, 2012
3.1.6
Certificate of Designation of the Preferences, rights, limitations, qualifications, and restrictions of the Series B Preferred Stock of Hangover Joe’s Holding Corporation. Incorporated by reference from Form 10-K for the year ended December 31, 2012 and filed on April 15, 2013.
3.1.7
Certificate of Designation of the Preferences, rights, limitations, qualifications, and restrictions of the Series C Preferred Stock of Hangover Joe’s Holding Corporation. Incorporated by reference from Form 10-K for the year ended December 31, 2012 and filed on April 15, 2013.
3.2
Bylaws. Incorporated by reference from Form 8-K dated October 19, 2010, and filed on October 25, 2010.
4.1
Securities Purchase Agreement by and among the Company and the Asher Enterprises, Inc., dated January 14, 2014. Incorporated by reference from Form 8-K filed on January 21, 2014.
4.2 Convertible Promissory Note issued to Asher Enterprises, Inc. Incorporated by reference from Form 8-K filed on January 21, 2014.
4.3 Securities Purchase Agreement by and among the Company and the Asher Enterprises, Inc., dated March 13, 2014. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.4 Convertible Promissory Note issued to Asher Enterprises, Inc. dated March 13, 2014 Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.5 12% Convertible Note issued to JSJ Investments Inc dated March 20, 2014. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.6 Securities Purchase Agreement by and among the Company and Adar Bays LLC dated March 24, 2014. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.7 8% Convertible Redeemable Note issued to Adar Bays LLC. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.8 Securities Purchase Agreement by and among the Company and LG Capital Funding, LLC dated March 19, 2014. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.9 8% Convertible Redeemable Note issued to LG Capital Funding, LLC. Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2013 and filed on April 21, 2014.
4.10 Convertible Promissory Note issued to KBM Worldwide, Inc. dated May 9, 2014. Filed Herewith.
4.11 Securities Purchase Agreement with KBM Worldwide, Inc. dated May 9, 2014. Filed Herewith.
4.12
Securities Purchase Agreement by and among the Company and the KBM Worldwide, Inc., dated May 29, 2014 Incorporated by reference and Filed on June 23, 2014.
4.13
Convertible Promissory Note issued to KBM Worldwide, Inc. dated May 29, 2014 Incorporated by reference and Filed on June 23, 2014.
34
4.14
12% Convertible Note issued to JSJ Investments Inc dated May 21, 2014 Incorporated by reference and Filed on June 23, 2014
4.15
Convertible Note issued to Black Mountain Equities, Inc. Incorporated by reference and Filed on June 23, 2014
4.16
Securities Purchase Agreement by and among the Company and LG Capital Funding, LLC dated July 3, 2014 Incorporated by reference and Filed on July 16, 2014
4.17
8% Convertible Redeemable Note issued to LG Capital Funding, LLC dated July 3, 2014 Incorporated by reference and Filed on July 16, 2014
4.18
8% Convertible Redeemable Back End Note issued to LG Capital Funding, LLC dated July 3, 2014 Incorporated by reference and Filed on July 16, 2014
4.19
8% Collateralized Secured Back End Note issued to Hangover Joe's Holding Corporation dated July 3, 2014 Incorporated by reference and Filed on July 16, 2014
4.20
Securities Purchase Agreement by and among the Company and Auctus Private Equity Fund, LLC, dated July 25, 2014. Filed herewith.
4.21
Convertible Promissory Note issued to Auctus Private Equity Fund, LLC, dated July 25, 2014. Filed Herewith.
4.22
Securities Purchase Agreement by and among the Company and KBM Worldwide, Inc., dated August 12, 2014. Filed herewith.
4.23
Convertible Promissory Note issued to KBM Worldwide, Inc, Inc. dated August 12, 2014. Filed Herewith.
4.24
Securities Purchase Agreement by and among the Company and Eastmore Capital, LLC, dated August 12, 2014. Filed herewith.
4.25
Convertible Promissory Note issued to Eastmore Capital, LLC dated August 12, 2014. Filed Herewith.
4.26
Settlement Agreement between the Company and TCA Global Master Credit Fund, L.P. dated August 12, 2014. Filed Herewith.
4.27
Assignment and Assumption Agreement between TCA Global Master Credit Fund, L.P., the Company and Union Capital, LLC dated August 12, 2014. Filed Herewith.
4.28
Assignment and Assumption Agreement between TCA Global Master Credit Fund, L.P., the Company and GEL Properties, LLC dated August 12, 2014. Filed Herewith.
4.29
Replacement Convertible Promissory Note issued to Union Capital, LLC dated August 12, 2014. Filed Herewith.
4.30
Replacement Convertible Promissory Note issued to GEL Properties LLC dated August 12, 2014. Filed Herewith.
4.31
Securities Purchase Agreement by and among the Company and the KBM Worldwide, Inc., dated September 2, 2014. Incorporated by reference and Filed on September 29, 2014.
4.32
Convertible Promissory Note issued to KBM Worldwide, Inc. dated September 2, 2014. Incorporated by reference and Filed on September 29, 2014.
4.33
Note Purchase Agreement by and among the Company and the Tangiers Investment Group, LLC, dated September 3, 2014. Incorporated by reference and Filed on September 29, 2014.
4.34
Convertible Debenture issued to Tangiers Investment Group, LLC dated September 3, 2014. Incorporated by reference and Filed on September 29, 2014.
4.35EB-5 contract with West Coast Capital, LLC dated November 3, 2014. Filed herewith.
10.1 Credit Agreement between Hangover Joe’s Holding Corporation and Hangover Joe’s Inc, collectively as borrowers and TCA Global Credit Master Fund LP, as Lender effective January 10, 2013. Incorporated by reference from Form 10-K for the year ended December 31, 2012 and filed on April 15, 2013.
10.2 First Amendment to Credit Agreement between Hangover Joe’s Holding Corporation and Hangover Joe’s Inc, collectively as borrowers and TCA Global Credit Master Fund LP, as Lender dated February , 2013. Incorporated by reference from Form 10-K for the year ended December 31, 2012 and filed on April 15, 2013
10.3 Promissory note with JMJ Financial dated June 18, 2013, Incorporated by reference from Form 10-Q for the quarter ended June 30, 2013 and filed on August 19, 2013.
10.4 License Agreement between the Company and Warner Brothers Japan dated December 16, 2013. Incorporated by reference from Form 10-Q for the quarter ended September 30, 2013 and filed on December 19, 2013.
10.5 Employment agreement between company and Michael Jaynes, Chairman. Incorporated by reference from Form 8-K filed on January 21, 2014.
10.6 Employment agreement between company and Matthew Veal, CFO and CEO. Incorporated by reference from Form 10-Q for the quarter ended September 30, 2013 and filed on December 19, 2013.
10.7 Employment agreement between company and Shawn Adamson, Chief Sales and Marketing Officer. Incorporated by reference from Form 10-Q for the quarter ended September 30, 2013 and filed on December 19, 2013.
31.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Matthew A. Veal, Chief Executive and Financial Officer). Filed herewith.
32.1
Certification Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Matthew A. Veal, Chief Executive and Financial Officer). Filed herewith.
101.INS
XBRL Instance Document. Filed herewith.
101.SCH
XBRL Schema Document. Filed herewith.
101.CAL
XBRL Calculation Linkbase Document. Filed herewith.
101.DEF
XBRL Definition Linkbase Document. Filed herewith.
101.LAB
XBRL Labels Linkbase Document. Filed herewith.
101.PRE
XBRL Presentation Linkbase Document. Filed herewith.
35
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.
HANGOVER JOE’S HOLDING CORPORATION
Date: November 19, 2014
By:
/s/ Matthew Veal
Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)
36
Exhibit 4.35
West Coast Capital Consultants
EB-5 FUNDING AGREEMENT
This EB-5 Funding Agreement (“Agreement”), effective as of 11,05,2014 (“Effective Date”) is entered into by and between Hangover Joe's Holding Corporation (herein referred to as the “CLIENT PROJECT”) and West Coast Capital Consulting/Grant Galloway (herein referred to as the “WCCC/GG”).
WHEREAS, the CLIENT PROJECT desires to engage the services of WCCC/GG to represent the CLIENT PROJECT in securing EB-5 Regional Center funding.
NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:
1. Term of Consultancy. CLIENT PROJECT hereby agrees to retain the WCCC/GG to act in a consulting capacity to the CLIENT PROJECT, and WCCC/GG hereby agrees to provide services to the CLIENT PROJECT.
2. Duties of WCCC/GG: WCCC/GG agrees that it will provide the following specified services through the diligent commercial efforts of its officers and employees.
(a) Consult with and assist the CLIENT PROJECT in developing, and implementing appropriate documents for presenting the CLIENT PROJECT and its business plans, strategy and personnel to the EB-5 investment community, and creating the foundation for and securing EB-5 investment funding.
(b) Introduce the CLIENT PROJECT to the EB-5 /Regional Center investment community and diligently market the CLIENT PROJECT to all existing EB-5 Regional Centers.
3. Remuneration. For undertaking this engagement, document preparation, and marketing the CLIENT PROJECT agrees to provide compensation to WCCC/GG as follows:
1) Cost: 5,000 USD.
Signed /s/ Matthew A. Veal
2) Marketing Efforts: $12,500 USD worth of shares of stock of Hangover Joe's Holding Corporation calculated at .003 per share totaling $12,500.
Signed /s/ Matthew A. Veal
3) 100,000 USD CASH as a success fee upon the securing of a minimum of $2,500,000 USD in EB-5 funding provided by WCCC/GG.
Signed /s/ Matthew A. Veal
The CLIENT PROJECT understands and agrees that WCCC/GG has represented that it has foregone significant opportunities to accept this engagement and that the CLIENT PROJECT derives substantial benefit from the execution of this Agreement and the ability to announce its relationship with WCCC/GG. Once the remuneration has been paid, it will constitute payment for WCCC/GG’s agreement to consult to the CLIENT PROJECT and will be deemed a nonrefundable retainer.
4. Legal Representation. CLIENT PROJECT and WCCC/GG represents that they have consulted with independent legal counsel and/or tax, financial and business advisors, to the extent that they deemed necessary.
5. Status as Independent Contractor. WCCC/GG's engagement pursuant to this Agreement shall be as independent contractor, and not as an employee, officer or other agent of the CLIENT PROJECT.
6. Complete Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
AGREED TO:
CLIENT PROJECT: Hangover Joe's Holding Corporation
By: /s/ Matthew A. Veal
Name: (Duly Authorized Agent) CEO
West Coast Capital Consulting/Grant Galloway (WCCC/GG):
By: /s/ Grant Galloway
Name: Grant Galloway
EXHIBIT 31.1
Certifications:
I, Matthew Veal, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Hangover Joe’s Holding Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any changes in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
Dated: November 19, 2014
By
/s/ Matthew Veal
Matthew Veal,
Chief Executive and Financial Officer
(Principal Executive, Financial and Accounting Officer)
EXHIBIT 32.1
Certification of Principal Executive and Financial Officer
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly Report of Hangover Joe’s Holding Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 19, 2014
By
/s/ Matthew Veal
Matthew Veal,
Chief Executive and Financial Officer
(Principal Executive, Financial and Accounting Officer)
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ON THE 10 Q ANOTHER LAWSUIT FILED
crazy stuff
e been no material changes to the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Other than the following, all sales of unregistered equity securities that occurred during the period covered by this report have been previously disclosed in our current report on Form10-K filed on April 21, 2014, our current reports on Form10-Q filed on May 20, 2014, August 18, 2014 and other current reports on Form 8-K filed during the fiscal year to dater.
On September 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 7,000,000 shares.
On September 28, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 9,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 3, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 11,400,000 shares.
On October 21, 2014, GEL Properties LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 8,700,000 shares.
On September 3, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 16, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On September 23, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 4,000,000 shares.
On October 7, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 5,206,806 shares.
On October 21, 2014, Union Capital LLC converted $1,000 (on a tentative basis, to be redetermined according to the agreed-upon discount when the shares are actually sold) for 12,000,000 shares.
On September 30, 2014, LG Capital Funding LLC converted $8,500 of their $26,500 promissory note dated March 31, 2013 for 4,235,459 shares.
On October 7, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, LG Capital Funding LLC converted $9,000 of their $26,500 promissory note dated March 31, 2013 for 13,503,549 shares
On October 7, 2014, JSJ Investments Inc. converted $14,796 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 10,203,886 shares.
On October 21, 2014, JSJ Investments Inc. converted $19,580 of their $50,000 (including $1,000 of interest) promissory note dated March 31, 2013 for 13,503,549 shares.
On October 1, 2014, JMJ Financial converted $20,999 of their promissory note dated June, 2013 for 8,300,000 shares.
On October 13, 2014, JMJ Financial converted $18,288 of their promissory note dated June, 2013 for 9,500,000 shares.
On October 21, 2014, JMJ Financial converted $17,165 of their promissory note dated June, 2013 for 8,916,795 shares.
On September 26, 2014, Asher Enterprises Inc. converted $8,000 of their promissory note dated January, 2014 for 3,488,372 shares.
On September 29, 2014, Asher Enterprises Inc. converted $7,000 of their promissory note dated January, 2014 for 5,000,000 shares.
On September 30, 2014, Asher Enterprises Inc. converted $7,500 of their promissory note dated March, 2014 for 3,187,500 shares.
On November 3, 2014, the Company issued 20,583 Series D Convertible Preferred Shares each to the two principals of West Coast Capital in exchange for services valued at $12,500.
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Act") for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transactions did not involve a public offering, Each of the investors are accredited investor, had access to information about the Company and their investment, took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
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Item 3. DEFAULTS UPON SENIOR SECURITIES
The Git-R-Done team is getting ready to set up for the trade show. Photos tomorrow from the Tampa Trade Show, We are going to Git R Done big time for HJOE this weekend. We cannot wait to start showing buyers the nations leading healthy energy shot.
another good day
long and strong with over 8 million shares
nice day
Picturs of new product Posted below
I
GitRDoneEnergy
10 hours ago · Edited
Team Hangover Joe's is gearing up for the AATAC trade show in Tampa, Florida this weekend. We have a busy week as Roberto will be going to Nola to meet with a new distributor and then on to Florida to do the show with the rest of the HJOE Team! We are going Git R Done in Tampa this weekend for HJOE!
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GitRDoneEnergy We wanted to update so people understand how it works. When we ship to a distributor like the Master Distributor in Houston they are master distributors selling to a lot of truck jobbers coming to their warehouse bucket truck guys as well. We have no clue where the product goes as these guys put in tons of mom and pop stores as well as some franchise stores but their is no master list. The get it up and down the streets this help build the brand at this early stage. They key is they sell and the jobbers keep coming back to pick up and refill stores from our master distributors. This is how you spread product in urban areas like Houston etc. If its a chain group we will announce this and so will LTCG to drive traffic to stores. We are building the brand at this point with lots of Master Distributors and Jobbers around the country but there will be announcements in the future stay tuned!
1 · 3 hours a
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GitRDoneEnergy @GitRDoneEnergy · 25m 25 minutes ago
Another pallet shipping today to our new Houston Distributor with the counter display racks and store window... http://fb.me/1KPTUJK15
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GitRDoneEnergy @GitRDoneEnergy · 4h 4 hours ago
This morning, it was brought to our attention that one of our distributors of the brand was banned for speaking... http://fb.me/3i3oPtEL7
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