wydi10qa20090331.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-33519

WHO’S YOUR DADDY, INC.

(Exact name of Registrant as specified in its charter)

Nevada	98-0360989
(State of Incorporation)	(I.R.S. Employer Identification No.)

5840 El Camino Real, Suite 108, Carlsbad, CA 92008

(Address of principal executive offices)

(760) 438-5470

(Issuer’s telephone number)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company: in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o	Accelerated Filer o

Non-Accelerated Filer (Do not check if smaller reporting company) o	Smaller Reporting Company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of May 15, 2009, there were 20,920,781 shares of our common stock issued and outstanding.

WHO’S YOUR DADDY, INC.

FORM 10-Q

MARCH 31, 2009

INDEX


Part I – Financial Information

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition or Plan of Operation	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
Item 4T.	Controls and Procedures	19

Part II – Other Information

Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Information	20
Item 6.	Exhibits	21

Signatures		22

Certifications

PART I - -- FINANCIAL INFORMATION

ITEM I -- FINANCIAL STATEMENTS

WHO’S YOUR DADDY, INC.

BALANCE SHEETS

	March 31, 2009			December 31, 2008
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	-		$	-
Accounts receivable, net of allowance of $60,468 and $60,468 at March 31, 2009 and December 31, 2008, respectively.		36,032			33,496
Inventories		1,348			-
Prepaid and other		2,403			37,691
Total current assets		39,783			71,187
Property and equipment, net		40,807			45,708
Intangible assets, net		143,711			143,711
Deposits and other		36,335			36,335
Total assets	$	260,636		$	296,941

Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	860,167		$	833,364
Accrued expenses		1,208,193			1,285,163
Accrued litigation		1,790,000			1,790,000
Notes payable		667,000			607,000
Due to officers		345,378			221,618
Total current liabilities		4,870,738			4,737,145
Notes payable		307,146			232,146
Total liabilities		5,177,884			4,969,291

Shareholders’ deficit
Preferred stock, $0.001 par value: 20,000,000 shares authorized, 333,333 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively.		333			333
Common stock, $0.001 par value: 100,000,000 shares authorized, 20,920,781 and 19,870,781 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively.		20,921			19,871
Additional paid-in capital		24,530,867			24,436,127
Accumulated deficit		(29,469,369	)		(29,128,681	)
Total shareholders’ deficit		(4,917,248	)		(4,672,350	)
Total liabilities and shareholders’ deficit	$	260,636		$	296,941

See accompanying Notes to Financial Statements.

WHO’S YOUR DADDY, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended March 31,
	2009			2008


Sales	$	160,420		$	102,823
Cost of sales		93,239			74,287
Gross profit		67,181			28,536

Operating expenses:
Selling and marketing		119,174			81,689
General and administrative		239,338			491,320
Total operating expenses		358,512			573,009
Operating loss		(291,331	)		(544,473	)

Interest expense		48,957			84,422
Interest income		-			(2,061	)
Change in fair value of derivative liabilities		-			-
Gain on extinguishment of debt		-			(288,217	)
Other, net		400			(3,200	)
Loss before income taxes		(340,688	)		(335,417	)
Income taxes		-			-
Net loss	$	(340,688	)	$	(335,417	)

Basic and diluted net loss per share:	$	(0.02	)	$	(0.04	)
Weighted average number of common shares used in per share calculations:
Basic and diluted		20,497,722			8,929,093

See accompanying Notes to Financial Statements.

WHO’S YOUR DADDY, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2009			2008

Cash flows from operating activities:
Net loss	$	(340,688	)	$	(335,417	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on extinguishment creditor settlements		-			(288,217	)
Common stock issued for services rendered		95,790
Stock compensation expense		-			114,353
Depreciation		4,901			6,741
Amortization of debt discount		35,000			-
Changes in operating assets and liabilities:
Accounts receivable		(2,536	)		(31,467	)
Inventories		(1,348	)		74,287
Prepaid expenses and other assets		35,288			24,566
Accounts payable		26,803			120,971
Accrued expenses		48,030			303,375
Accrued litigation		-			(22,000	)
Due to officers and related parties		98,760			(11,953	)
Net cash used in operating activities		-			(44,761	)

Cash flows from investing activities:
Trademarks		-			(9,599	)
Net cash used in investing activities		-			(9,599	)

Cash flows from financing activities:
Proceeds from the sale of common stock and stock subscription receivable		-			55,985
Net cash provided by financing activities		-			55,985
Net increase (decrease) in cash and cash equivalents		-			1,625
Cash and cash equivalents at beginning of period		-			145
Cash and cash equivalents at end of period	$	-		$	1,770

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	-		$	74,110
Cash paid during the period for income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock to settle creditor obligations	$	-		$	302,643
Issuance of common stock for services	$	95,790		$	-

See accompanying Notes to Financial Statements.

WHO’S YOUR DADDY, INC.

NOTES TO FINANCIAL STATEMENTS

March 31, 2009

(UNAUDITED)

Business

Who’s Your Daddy, Inc. (the “Company”) manufactures (on an outsource basis), markets, sells and distributes its The King of Energy® energy drinks and energy shots centered on its trademark-protected brand, Who’s Your Daddy®.

The Company’s primary focus is to expand upon sales of its energy drinks and concentrated energy “shots”, and it is exploring opportunities for the licensing of its proprietary name, Who’s Your Daddy®, for products that can take advantage of this distinctive name, including related products such as energy bars.

Management’s Plan of Operations

For the years ended December 31, 2008 and 2007, revenues declined to $745,050 from $981,919, respectively, primarily due to the lack of operating capital, resulting in reduced sales and marketing efforts, including payments for slotting fees for shelf space at retail outlets. The Company has also incurred net losses of $2,644,172 and $1,934,947 for the years ended December 31, 2008 and 2007, respectively. For the three months ended March 31, 2009, revenues were $160,420 and the Company experienced a net loss of $340,688. As of March 31, 2009, there was negative working capital of more than $4.8 million including $1.8 million of an accrued arbitration award for a lawsuit against the Company.

The Company’s cash requirements have been and will continue to be significant. The Company’s operations will require cash in 2009 to fund: 1) marketing, 2) new product development, 3) expansion of its distribution network, 4) purchasing inventory, 5) administrative costs, 6) payment of past due accounts payable, and 7) other working capital needs. Management believes the Company’s operating losses have resulted from a combination of insufficient revenues generated to support its sales and marketing efforts, new product development and administrative time and expense of being a small publicly-traded company.

Management continues to actively seek capital through various sources. During the third quarter of 2008, the Company raised $380,000 through the issuance of convertible promissory notes. Due to the current economic environment and the Company’s current financial condition, management cannot be assured there will be adequate capital available when needed and on acceptable terms. The factors described above raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that might result from the outcome of this uncertainty.

2.	Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year 2008 as reported in the Company’s Form 10-K have been omitted. In the opinion of management, the financial statements include all adjustments, consisting of normal recurring accruals necessary to present fairly the Company’s financial position, results of operation and cash flows. The results of operations for the three-month period ended March 31, 2009 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the financial statements and related notes which are part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

Accounting for Equity Instruments Issued to Consultants

The Company measures compensation expense for its non-employee stock-based compensation under Emerging Issues Task Force (“EITF”) No. 96-18 “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” The fair value of the option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to the statement of operations and credited to additional paid-in capital.

Debt Issued with Common Stock

Debt issued with common stock is accounted for under the guidelines established by Accounting Principles Board ("APB") Opinion No. 14 “Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants” under the direction of EITF 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”, EITF 00-27 “Application of Issue No 98-5 to Certain Convertible Instruments”, and EITF 05-8 Income Tax Consequences of Issuing Convertible Debt with Beneficial Conversion Features. The Company records the relative fair value of common stock related to the issuance of convertible debt as a debt discount or premium. The discount or premium is subsequently amortized over the expected term of the convertible debt to interest expense.

Net Loss per Share

Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period. Diluted net loss per share reflects the potential dilution to basic EPS that could occur upon conversion or exercise of securities, options or other such items to common shares using the treasury stock method, based upon the weighted average fair value of our common shares during the period. There were no potentially dilutive “in-the-money” securities outstanding for the three months ended Mardh 31, 2009 and 2008.

Recent Accounting Pronouncements

In March 2008, the FASB, affirmed the consensus of FASB Staff Position (FSP) APB No. 14-1 (APB 14-1), "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)," which applies to all convertible debt instruments that have a net settlement feature; which means that such convertible debt instruments, by their terms, may be settled either wholly or partially in cash upon conversion. FSP APB 14-1 requires issuers of convertible debt instruments that may be settled wholly or partially in cash upon conversion to separately account for the liability and equity components in a manner reflective of the issuer’s nonconvertible debt borrowing rate. Previous guidance provided for accounting for this type of convertible debt instrument entirely as debt. FSP APB 14-1 was effective on January 1, 2009.

In June 2008, the FASB issued EITF Issue No. 07-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock. EITF No. 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS No. 133 specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope exception. The adoption of EITF 07-5 had no material impact on our financial statements.

3.	Accrued Expenses

Accrued expenses consisted of the following at:

	March 31,		December 31,
	2009		2008
Compensation, tax and benefits	$	931,660	$	803,281
Customer deposits		227		115,576
Professional fees		82,914		72,914
Interest		125,746		115,746
Other		67,646		177,646
	$	1,208,193	$	1,285,163

4.	Convertible Promissory Notes

In 2008, the Company issued $380,000 face value, 10% convertible promissory notes (“Promissory Notes”). In connection therewith, the Company recorded a discount on the date of issuance of $211,758 for certain costs associated with the debt. The Company is amortizing the discount over the contractual term of the Promissory Notes. During the three months ended March 31, 2009 the Company recognized $35,000 in interest charges for the accretion of the unamortized discount. The aggregate unamortized discount at March 31, 2009 was $112,854.

5.	Related Parties

As described in Note 1, the Company has limited capital resources and liquidity. As a result, an officer of the Company and one of its major shareholders have advanced funds to the Company in order for it to meet its cash payment obligations. At March 31, 2009 the Company owes a total of $169,683 to these two individuals for these advances.

6.	Litigation

On April 1, 2005, the Company received a complaint filed by Who’s Ya Daddy, Inc., a Florida corporation (“Daddy”), alleging that the Company was infringing on Daddy’s trademark, Who’s Ya Daddy®, with respect to clothing. On April 7, 2006, the Company entered into a settlement agreement with Daddy pursuant to which the Company was granted an exclusive license to use its marks on clothing in exchange for a royalty payment of 6% of gross sales for clothing products in the United States, excluding footwear. As part of the settlement, the Company also agreed to remit to Daddy 12% of the licensing revenues received from third parties who the Company granted sublicense to for use of the marks on clothing. The Company has not made any of the required payments under the settlement agreement. On March 26, 2008, the Company, Dan Fleyshman and Edon Moyal each received a Notice of Levy from the United States District Court for the Southern District of California in the amount of $143,561 allegedly pursuant to the terms of the settlement agreement with Daddy. The Company settled the debt on March 4, 2009 for $125,000 of which $25,000 was paid through an advance by an officer. The first payment of $10,000 dollars is due April 30, 2009 and $10,000 is due every 60 days until the remaining $100,000 balance is paid.

On March 3, 2009 the Company received a judgment from WorldWide Express. The Company was paying $1,200 per month against the original judgment of $18,781. The Company had paid $10,949 and the remaining amount owed is $9,086.

7.	Common Stock

Issuances of Common Stock during the Three Months Ended March 31, 2009

On January 26, 2009 the Company entered into a Marketing & Representation Agreement with Leigh Steinberg Sports & Entertainment LLC (“LSSE”) under which LSSE will provide various marketing services. See Note 8. As partial consideration the Company agreed to issue up to 1,000,000 shares of its Common Stock to LSSE, which will vest ratably over a 12-month period as services are rendered. The Company is currently waiting for instructions from LSSE as to how to issue the vested shares. During the three months ended March 31, 2009, the Company has recorded stock-based marketing expense of $13,290, based on the average market price for the applicable periods, in connection with the vesting of these shares as required under EITF 96-18 (see Note 2).

On February 6, 2009 the Company issued 1,000,000 shares of its Common Stock to a major distributor of its products. The shares were issued as payment for marketing and promotion costs for the Company’s energy shot product to certain gaming properties, costs which the Company was unable to pay because of its limited resources. The shares were fully earned on the date of issuance without any recourse for marketing bench marks. During the three months ended March 31, 2009 the Company recorded stock-based marketing expense of $80,000, based on the market price on the date of issuance, in connection with the issuance of these shares.

On March 26, 2009 the Company issued 50,000 shares of its Common Stock to an Investor Relations firm for services performed. During the three months ended March 31, 2009 the Company recorded stock-based investor relations expense of $2,500, based on the market price on the date of issuance, in connection with the issuance of these shares.

8.	Marketing & Representation Agreement

On January 26, 2009 the Company entered into a Marketing & Representation Agreement with LSSE whereby LSSE will provide marketing, public relations and merchandising services to the Company. The Company intends to tap LSSE’s vast network of client companies and athletes for marketing, promotion, sponsorship and other exposure-increasing opportunities that it hopes will greatly broaden the reach and visibility of its products and significantly increase sales.

Under the Agreement, which has a term of 12 months, the Company has agreed to pay LSSE a monthly fee of $7,500 beginning April 1, 2009 in addition to a $7,500 fee paid on execution of the Agreement. In addition, the Company has agreed to issue to LSSE up to 1,000,000 shares of its Common Stock – see Note 7.

9.	Subsequent Event

On or about May 16, 2008, Fish & Richardson, P.C. (“Fish”) filed an action against us in the Superior Court of California, County of San Diego, asserting claims for breach of a settlement agreement purportedly entered into in connection with fees allegedly owed by us to Fish for Fish’s provision of legal services on our behalf in the approximate amount of $255,000. We asserted that the settlement agreement is void and that Fish failed to act as reasonably careful attorneys in connection with their representation of us.

Fish’s motion for summary judgment, which was heard on April 17, 2009, was granted. While the motion has not yet been formally entered, it appears that the amount will be $265,000, plus costs of approximately $9,000.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

Disclaimer Regarding Forward-Looking Statements

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Description of Business

Who’s Your Daddy® King of Energy™ Products

The business strategy behind our King of Energy™ energy drinks focuses on maintaining the edge, energy and humor behind our brand, while continuing to build brand awareness and recognition. Our target market includes young adults who seek alternatives to bad tasting energy drinks, coffee, and other stimulants. As part of our strategy, we have developed products and events that appeal to this group, and we continue to assess opportunities to expand our product lines and distribution worldwide. Our King of Energy™ energy drinks are designed to be positioned within mass-market retail outlets, offering high-quality, cutting-edge products with eye-catching packaging.

One of our most exciting products is the “energy shot,” which is a concentrated two ounce energy drink, designed to provide a zero calorie, sugar free, rapid and lasting energy boost which enhances muscle strength and endurance. One of the important ingredients in the energy shot is L-Arginine. Arginine in an amino acid and is essential for optimum growth and in the regulation of protein metabolism. It is well established that Arginine facilitates the release of growth hormone (HGH), stimulates the pancreas for insulin production, and is a component in the hormone vasopressin produced by the pituitary gland. HGH-release by means of Arginine may offer benefits in the treatment of injuries, as well as strengthening the immune system, building lean muscle, and burning fat. Arginine is also required by the body to carry out the synthesis of nitric oxide, a compound that, working through cGMP, relaxes blood vessels and allows more blood to flow through arteries. It has been hypothesized that taking extra Arginine will increase nitric oxide levels and increase blood flow. The energy shot was made available to the retail and wholesale market in mid-November 2008.

Our King of Energy™ energy drinks come in two flavors and four distinct formulas. We have Regular and Sugar-Free versions of our unique cranberry-pineapple flavor, which we started shipping in the third quarter of 2005, as well as Regular and Sugar-Free versions of our Green Tea flavor. We introduced our Regular Green Tea beverage in July 2006, and ours was one of the first Green Tea beverages for the energy drink market. In February 2007, we began shipping our Sugar-Free Green Tea flavored beverage. For this product, we are targeting women and the more mature generation who are interested in the anti-oxidants, cleansing, and weight loss features of Green Tea. This expands the scope of retailers who can carry our products, since many Green Tea retailers do not carry energy drinks.

After testing and experimenting with flavors and taking approximately 50 different formulas through “blind” taste tests, we selected the Cranberry-Pineapple flavor for our flagship product. By far, this formulation was found to enjoy the broadest consumer appeal with the target demographic group due to its appealing taste, the lack of typical “after-taste,” and by providing a solid “hook” for the consumer and retailer. In 2007, we distributed four flavors of our King of Energy™ energy drinks – Cranberry-Pineapple in Regular and Sugar-Free and Green Tea in Regular and Sugar-Free. Unlike many of the other energy drinks on the market, our King of Energy™ energy drinks taste good and are similar to drinking a soda or fruit punch. Formulated with taurine and caffeine, our energy drinks are designed to energize and improve mental performance while increasing concentration, alertness and physical endurance.

Business Plan

On May 28, 2008, we instituted management changes in an attempt to attract additional investment capital and revise our marketing strategy. Michael R. Dunn assumed the positions of Chairman of the Board of Directors and Chief Executive Officer. We intend to use any new capital to initiate the strategy below, in an attempt to increase sales and enhance profit margins while securing brand recognition in the energy drink market.

On November 21, 2008, we entered into a Master Distributor Agreement (the “Distributor Agreement”) with Beryt Promotion, LLC, a Nevada limited liability company (the “Distributor”). The Distributor Agreement, which has a term of one year, provides that, in exchange for the Distributor acting as the exclusive distributor of our products, with the right to sub-distribute, we shall: (1) sell our products to the Distributor at a discount to the retail price; and (2) issue to the Distributor 100,000 shares of our common stock. Subsequently, we issued an additional 1,000,000 shares of common stock to Ramon DeSage for marketing and promotional expenses in December 2008 and another 1,000,000 shares of common stock in February 2009. The Who’s Your Daddy® Sport Energy shot is currently in Caesars Palace, Flamingo Hotel, Paris Las Vegas, Bally’s Hotel, Rio Hotel, Harrah’s Hotel, Imperial Palace, Bill’s Gambling Hall, Luxor, Excalibur, Circus Circus, Monte Carlo, Mandalay Bay, New York New York, Stratosphere, Planet Hollywood Venetian Hotel, LAX Night Club, Dick’s Last Resort, Coyote Ugly, Pure Night Club and Prive Night Club. Additionally, Mr. DeSage has been able to market the product to almost every gift shop and hotel in Las Vegas while paying almost all of the marketing costs, due to our limited cash resources.

Through one of his companies, Cadeau Express, Mr. DeSage caters to hotels and casinos which roll out the red carpet for selective guests and high-end gamblers. Cadeau Express stocks over 14,000 different items, including a full line of jewelry, crystal, watches, writing instruments, fragrances, electronics, promotional items, leather goods, and fashion accessories. Mr. DeSage has the expertise to provide guidance for effective ways to promote special events or develop an incentive or premium give-away program to enhance our business goals.

On January 26, 2009, we entered into a Marketing & Representation Agreement with Leigh Steinberg Sports & Entertainment LLC, a Nevada limited liability company (“LSSE”). The agreement with LSSE includes marketing, public relations, and merchandising services, including introductions, negotiations, and support for our products. For over 35 years, Leigh Steinberg has pioneered the sports management industry, setting the standard for excellence in athlete representation. He has represented the first pick of the first round of the NFL draft a record-breaking eight times and 60 overall first round NFL picks. Leigh’s unrivaled history of negotiating record-setting contracts and tireless dedication to charitable activities are the cornerstones of his business. Among many others, Leigh has represented Hall of Famers, Steve Young, Troy Aikman and Thurman Thomas, heavyweight champion Lenox Lewis and Major League Baseball stars such as Will Clark, Shawn Green and Orlando “El Duque” Hernandez, all of who have worked with Leigh as a part of their contracts to donate a combined amount of more than $250 million for various charitable causes. On April 6, 2009, LSSE and Who’s Your Daddy, Inc. announced an endorsement deal with undefeated heavyweight boxing contender, Chris Arreola. Our announcement was days before Arreola’s April 11, 2009 boxing match against heavyweight veteran, Jameel McCline, at the Mandalay Bay Hotel & Casino in Las Vegas. Under the terms of the agreement, Arreola wore our brand logo on his trunks during the fight and would also promote our products through the use of his likeness on our website.

Arreola, whose nickname is “The Nightmare,” and who is of Hispanic American descent, exemplifies the type of athlete we want to associate with. As a Mexican Heavyweight, he has a chance to make history and we want to be associated with him as he continues his quest to become the first Mexican Heavyweight Champion of the world. The endorsement of Arreola (26-0, 23 knockouts) represents an aggressive and strategic move into the sport of boxing by the Company.

Our exciting and new two-ounce “energy shot” will typically be sold at point of purchase in convenience and grocery stores. With the introduction of this product, we believe we will be able to attract a new category of distributors who service the candy, tobacco and other ancillary items in convenience stores across the country. We expect to be able to sell directly to large regional and national retail chains in areas where we do not have distributors. Some of the major benefits of the product include reduced shipping fees, warehouse fees, and increased product longevity. The profit margin on the energy shot is substantial and offers the retailer three to four times the profit than sales from candy. We believe the product can also open additional distributing opportunities if we achieve sales levels that meet the expectation of the retailer. The ability to sell the energy shot at the cash register will significantly enhance the potential for sale of our product line in the energy drink section of the store.

The Industry

Energy drinks are beverages with legal stimulants, vitamins, and minerals that give users a lift of energy. Common ingredients are caffeine, taurine, ginseng, sugars, and various amounts of vitamins and minerals. The product is consumed by individuals who are explicitly looking for the extra boost in energy – college students, the “on-the-go” average person, and those seeking an alternative to coffee. Over the last few years, the United States energy drink sector has witnessed strong growth. In 2006, the sector experienced growth of over 40% to reach $5 billion dollars in the United States. According to Beverage Digest, the energy drink sector is projected to reach $8 billion by 2009.

Results of Operations for the Three Months Ended March 31, 2009 and 2008

Sales

Our sales consist of energy drink products sold to distributors and retail stores. Our sales are recorded at the selling price, less promotional allowances, discounts and fees paid to obtain retail shelf space (referred to as “shelving” or “slotting” fees).

During the first quarter of 2009, we generated $160,420 from the net sales of our products, compared to $102,823 for the comparable period in 2008. In the first quarters of 2009 and 2008 we paid $0 and $42,998 in promotion allowances and $0 and $24,506 in slotting fees, respectively, both of which were recorded as reductions of sales. In 2009 the majority of our sales consisted of our new energy shot product while 2008 sales were mostly our energy drink product.

Gross Profit

Gross profit represents revenues less the cost of goods sold. Our cost of goods sold consists of the costs of raw materials utilized in the manufacturing of products, packaging fees, repacking fees, in-bound freight charges, and internal and external warehouse expenses. Raw materials account for the largest portion of the cost of sales. Raw materials include costs for cans, ingredients and packaging materials.

Our gross profit for the first quarter of 2009 was $67,181, compared to $28,536 for the comparable period in 2008 and the gross margin for the 2009 period was 42%, compared to 28% for the comparable quarter of 2008. The increase in gross margin was primarily attributable to impact of the promotion allowances and slotting fees paid in the first quarter of 2008 on that periods gross margin.

Selling and Marketing Expenses

Selling and marketing expenses include personnel costs for sales and marketing functions, advertising, product marketing, promotion, events, promotional materials, professional fees and non-cash, stock-based compensation.

Selling and marketing expenses for the first quarter of 2009 were $119,174, compared to $81,689 for the comparable period in 2008. The 2009 period included $93,290 in costs for stock-based marketing expense relating to common shares issued or issuable to a major distributor and to LSSE. See Note 6 to the financial statements. Additionally, in 2009 there was a reduction in expenses for promotional materials, promotional events and a reduction in headcount resulting from cash constraints compared to the 2008 period.

General and Administrative Expenses

General and administrative expenses include personnel costs for management, operations and finance functions, along with legal and accounting costs, bad debt expense, insurance and non-cash, stock-based compensation.

General and administrative expenses for the first quarter of 2009 were $239,338, compared to $491,320 for the comparable period in 2008. The changes in these expenses were mainly the result of an overall reduction in headcount and a reduction of stock-based compensation.

Interest Expense

Interest expense during the first quarter of 2009 consisted of cash-based and non-cash based interest on our convertible promissory notes and other debt instruments. Interest expense during the 2008 period consisted of cash-based interest and registration rights penalties.

Interest expense during the first quarter of 2009 was $48,957, compared to $84,422 during the comparable period in 2008. The 2009 period includes $35,000 in non-cash interest expense on our convertible promissory notes while the 2008 period includes $69,919 in registration rights penalties.

Gain on the Extinguishment of Debt and Accounts Payable

In the first quarter of 2008, we entered into settlement agreements with certain vendors to pay their outstanding balances through the issuance of common stock or reduced cash payments. As a result of the settlements, we recognized a net gain of $288,217 from these settlements. There have been no such settlements during the first quarter of 2009.

Liquidity and Capital Resources

The report of our independent registered public accounting firm on the financial statements for the year ended December 31, 2008 contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern as a result of recurring losses, a working capital deficiency, and negative cash flows. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that would be necessary if we are unable to continue as a going concern.

We are and have been since the first quarter of 2008, in the process of conducting a “best-efforts” private offering of our common stock or convertible securities for a proposed minimum of $3,500,000 (the “Proposed Private Placement”). During the third quarter of 2008, we collectively issued $380,000 face value, 10% convertible promissory notes (“Promissory Note”) due 18 months after the respective date of issuance. Each Promissory Note consisted of a convertible promissory note bearing interest at a rate of 10% per annum and two shares of our restricted common stock equal to the outstanding principal balance. Upon the closing of a debt or equity offering of $1,750,000 prior to the due date, we are required to repay any amounts due under the Promissory Notes.

The Promissory Notes and any accrued interest thereon are convertible at the option of the holder into shares of our common stock at a conversion price equal to 80% of the volume weighted average price (“VWAP”) for 30 trading days preceding the earlier of (i) closing of at least $3 million in gross proceeds of the Proposed Private Placement, or (ii) 12 months from the date of issuance. The conversion price is subject to a floor of $0.50 per share and a ceiling of $0.75 per share. If we do not complete the Proposed Private Placement by January 15, 2010, we will be required to make equal monthly payments of principal and interest over a 60 month period.

Due to our lack of capital, we are in default of certain note agreements and past due with several vendors. If we do not raise additional capital, we may not be able to meet our financial obligations when they become due which can have a material adverse impact on our business.

We have been, and are, actively seeking to raise additional capital through our investment banker and other sources. Any proceeds raised are expected to be used for operational expenses, new product development, procurement of inventory and selling expenses. Due to the highly competitive nature of the beverage industry, our expected operating losses in the foreseeable future, and the credit constraints in the capital markets, we cannot assure you that such financing will be available to us on favorable terms, or at all. If we cannot obtain such financing, we will be forced to curtail our operations or may not be able to continue as a going concern, and we may become unable to satisfy our obligations to our creditors. In such an event, we will need to enter into discussions with our creditors to settle, or otherwise seek relief from, our obligations.

At March 31, 2009, our principal sources of liquidity consists of cash generated from product sales, advances of funds from officers and the issuance of debt and equity securities. In addition to funding operations, our principal short-term and long-term liquidity needs have been, and are expected to be, the pay down of past due accounts payable, servicing debt, the funding of operating losses until we achieve profitability, and expenditures for general corporate purposes. In addition, commensurate with our level of sales, we require working capital for purchases of inventories and sales and marketing costs to increase the promotion and distribution of our products.

At March 31, 2009, our cash and cash equivalents were $0, and we had negative working capital of $4,830,955. During the three months ended March 31, 2009, because of a lack of capital, we have issued 1,050,000 shares of common stock and are obligated to issue 166,667 common shares in payment for services investor relations and for marketing, promoting and merchandising our product. The value of the services and shares was $93,290. At March 31, 2009, we had $974,146 in debt obligations, of which $457,000 is in default for non-payment.

Cash Flows

The following table sets forth our cash flows for the three months ended March 31:

	Three Months Ended March 31,
	2009		2008			Change

Operating activities	$	-	$	(44,761	)	$	44,761
Investing activities		-		(9,599	)		9,599
Financing activities		-		55,985			(55,985	)
Change	$	-	$	1,625		$	(1,625	)

Operating Activities

Operating cash flows for the three months ended March 31, 2009 reflect our net loss of $340,688, offset by changes in working capital of $204,997 and non-cash items (depreciation, creditor settlements and stock-based compensation) of $135,681. The change in working capital is primarily related to increases in accounts payable and accrued expenses offset by a decrease in customer deposits. The increase in accounts payable and accrued expenses are due to the lack of operating capital to pay vendors and the deferral of payment of a significant percentage of wages to our executive officers.

Investing Activities

There was no cash used in investing activities for the three months ended March 31, 2009. During the same period in 2008, we spent $9,599 for trademarks.

Financing Activities

There was no cash used in investing activities for the three months ended March 31, 2009. During the comparable period in 2008, we received proceeds for the sale of common stock and common stock subscriptions totaling $55,985.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our President and Chief Financial Officer (the “Certifying Officer”) attempted to evaluate the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Because there was no written documentation of our disclosure controls and procedures at the time, the Certifying Officer was unable to complete an evaluation and therefore could not conclude whether the disclosure controls and procedures were effective or ineffective as of March 31, 2009. The Company has since documented in writing its disclosure controls and procedures and has evaluated such controls and procedures as of the end of the period covered by this report. Based upon such evaluation, the Certifying Officer concluded that our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure, due to the material weaknesses described below.

In light of the material weaknesses described below, the Certifying Officer performed additional analysis and other post-closing procedures to ensure our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The Certifying Officer has identified the following three material weaknesses which have caused the Certifying Officer to conclude that our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We have not documented our internal controls. We were required to provide written documentation of key internal controls and assess the effectiveness of our internal controls over financial reporting beginning with our fiscal year ending December 31, 2008. The Certifying Officer evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and have concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. The Certifying Officer evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3. We had a significant number of audit adjustments for the last three fiscal years. Audit adjustments are the result of a failure of the internal controls to prevent or detect misstatements of accounting information. The failure could be due to inadequate design of the internal controls or to a misapplication or override of controls. The Certifying Officer evaluated the impact of our significant number of audit adjustments last year and have concluded that the control deficiency that resulted represented a material weakness.

To remediate the material weaknesses in our disclosure controls and procedures identified above, in addition to working with our independent auditors, we have continued to refine our internal procedures to begin to implement segregation of duties and to reduce the number of audit adjustments.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 4T.

CONTROLS AND PROCEDURES

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES

During the third quarter of 2008, we sold a total of $380,000 face value, 10% convertible promissory notes (“Promissory Notes”), together with 720,000 shares of common stock, pursuant to a private offering, to a total of 11 individuals. Under the terms of the Promissory Notes, the principal and any unpaid accrued interest thereon is due and payable on January 15, 2010. Each of the respective Promissory Notes is convertible, at the option of the holder, into shares of the our restricted common stock at a price equal to 80% of the volume weighted average price for the last 30 trading days preceding the earlier of (i) closing of at least $3,000,000 in gross proceeds, or (ii) 12 months from the initial closing date of the offering. However, the conversion price may not be less than $0.50 per share, or greater than $0.75 per share. We relied on the exemption from registration relating to offerings that do not involve any public offering pursuant to Section 4(2) under the Securities Act of 1933 (the “Act”) and/or Rule 506 of Regulation D promulgated pursuant thereto. We believe that each purchaser is an “accredited investor” under Rule 501 under Regulation D of the Act and had adequate access to information about the Company.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

There have been no events which are required to be reported under this item.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.

OTHER INFORMATION

None

ITEM 6.	EXHIBITS
31.1	Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32	Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized.

Dated: May 18, 2009

	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

a.	All significant deficiencies and material weakness 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 control over financial reporting.