As filed with the Securities and Exchange Commission on January ____, 2019
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SHE Beverage Company, Inc.
(Exact name of registrant as specified in its charter)
California | 2086 | 47-1803329 | ||
(State or other jurisdiction of | (Primary standard industrial | (IRS employer | ||
incorporation or organization) | classification code number) | identification number) |
42601 8th Street West Suite 108
Lancaster CA 93534
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
42601 8th Street West Suite 108
Lancaster CA 93534
855-774-3238
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Elaine A. Dowling, Esq.
EAD Law Group, LLC
8275 S. Eastern Ave. Suite 200
Las Vegas, NV 89123
702-724-2636
ead@eadlawgroup.com
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check all that apply):
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | x | Smaller reporting company | x | |
Emerging Growth company | x |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Offering Price per Share | Proposed Maximum Offering Price (2) | Amount of Registration Fee (3)(4) | ||||||||||||
Common Shares for sale by Our Company | 10,000,000 | $ | 15.00 | $ | 150,000,000.00 | $ | 18,360.00 | |||||||||
Selling Shareholders– Common Stock | 6,835,967 | $ | 15.00 | $ | 102,539,505.00 | $ | 13,309.62 |
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a).
(3) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act.
(4) Previously Paid.
The registrant hereby may amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The issuer and the selling shareholders will sell the common stock being registered in this offering at a fixed price of $15.00 per share. It is possible that the Company’s shares may never be quoted on the NASDAQ Capital Markets or listed on an exchange.
SUBJECT TO COMPLETION, DATED January 10, 2020.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
PROSPECTUS
SHE BEVERAGE COMPANY, INC.
16,835,967 Shares of Common Stock
This prospectus will also allow us to issue a minimum of 100,000 and up to 10,000,000 common shares and selling shareholders to sell 6,835,967 common shares (“Shares” or “Securities”) in our initial public offering terminating the earlier of 180 days on July 14, 2020 or once the maximum offering has been met. The proceeds from the sale of the shares by the Company will be available for use by the Company. The selling shareholders’ sale of shares of common stock will result in proceeds which will not be available for use by the Company. The securities being registered in this offering may be illiquid because they are not listed on any exchange or quoted on the NASDAQ and no market for these securities may develop. The issuer and the selling shareholders will sell the common stock being registered in this offering at a fixed price of $15.00 per share. The Company’s shares may never be quoted on the NASDAQ or listed on an exchange.
Offering Price per Share | Gross Proceeds to Our Company | Net Proceeds to Our Company(1) | Net Proceeds to Selling Shareholders(2) | |||||||||||||
Per Share (Initial Public Offering) | 15.00 | 15.00 | 13.50 | 0.00 | ||||||||||||
Minimum (IPO) | 15.00 | 1,500,000.00 | 1,350,000.00 | 0 | ||||||||||||
Maximum (IPO) | 15.00 | 150,000,000.00 | 135,000,000.00 | 0 | ||||||||||||
Per Share (Selling Shareholders) | 15.00 | 0.00 | 0.00 | $ | 102,539,505.00 | |||||||||||
Total | $ | 15.00 | $ | 150,000,000.00 | $ | 135,000,000 | $ | 102,539,505.00 |
(1) Offering expenses may include printing, marketing, shipping and blue sky or broker related costs estimated at $1.50 per share.
(2) This calculation is based on all selling shareholders selling their shares at $15.00 per share. Selling shareholders are under no obligation to sell at the $15.00 per share price.
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act.
This offering is a best efforts self-underwritten offering where the officers and directors will be selling the securities and relying on the safe harbor provisions under Rule 3a-1 of the Exchange Act of 1934.
We are not a blank check company.
This offering will terminate upon reaching the maximum proceeds or the termination date, and the funds will be held in a separate account by the Company, but it is not a formal escrow or trust account therefor such funds may be available to creditors of the Company.
The securities offered in this prospectus involve a high degree of risk. You should consider the risk factors beginning on page 7 before purchasing our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is January 10, 2020.
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TABLE OF CONTENTS
Unless otherwise specified, the information in this prospectus is set forth as of January 10, 2020, and we anticipate that changes in our affairs will occur after such date. We have not authorized any person to give any information or to make any representations, other than as contained in this prospectus, in connection with the offer contained in this prospectus. If any person gives you any information or makes representations in connection with this offer, do not rely on it as information we have authorized. This prospectus is not an offer to sell our common stock in any state or other jurisdiction to any person to whom it is unlawful to make such offer.
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The following summary highlights selected information from this prospectus and may not contain all the information that is important to you. To understand our business and this offering fully, you should read this entire prospectus carefully, including the financial statements and the related notes beginning on page F-1. This prospectus contains forward-looking statements and information relating to SHE Beverage Company, Inc. (“the Company” or “SHE”). See Cautionary Note Regarding Forward Looking Statements on page 11.
Our Company
The Company was incorporated in the state of California in January 6, 2015.
Business Strategy
SHE Beverage Company, Inc. produces beverages focusing on the female customer. The Company understands that women wield substantial purchasing power. According to current research conducted by Business Insider on women’s purchasing power, women are taking the reins with their own finances and holding 60% of the U.S. personal wealth and 51% of all U.S stocks. They make 85% of all consumer purchasing decisions and account for $7 trillion in consumer and business spending.
SHE Beverage Company, Inc.’s strategy is to continue to create products for the whole family: men, women and children. The Company anticipates that its product demand and support will be primarily from women consumers.
Our executive offices are located at 42601 8th Street West Suite 108, Lancaster, CA 93534.
Our telephone number is 855-774-3238.
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act
The Company shall continue to be deemed an emerging growth company until the Company has stabilized. SHE Beverage Company, Inc. believes that with its current agreements for further distribution, and with the financial resources the Company intends to raise through its registered offering, it can further its manufacturing marketing and sales on a national and international level. The Company will move from emerging growth status when it meets the SEC requirements of and until the earliest of:
(A) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(B) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this title;
(C) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed to be a ‘large accelerated filer,’ as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.
As an emerging growth company, the Company is exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.
Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
As an emerging growth company, the Company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.
The Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.
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This prospectus covers a minimum of 100,000 and up to 10,000,000 common shares to be sold by the Company at a price of $15.00 per share in a direct public offering and 6,835,967 shares held by selling shareholders to be sold at $15.00 per share.
ABOUT THIS OFFERING
Securities Being Offered | Up to 10,000,000 shares of SHE Beverage Company, Inc. to be sold by the Company at a price of $15.00 per share and 6,835,967 shares of common stock of SHE Beverage Company, Inc. to be sold by selling shareholders at a price of $15.00 per share. The minimum offering is 100,000 shares |
Initial Offering Price | The Company will sell a minimum of 100,000 shares up to a maximum of 10,000,000 shares at a price of $15.00 per share, and the selling shareholders will sell up to 6,835,967 shares at a price of $15.00 per share. |
Terms of the Offering | The Company will offer and sell the shares of its common stock at a price of $15.00 per share in a direct offering to the public. The selling shareholders will offer and sell the shares of their common stock at a price of $15.00 per share. |
Termination of the Offering | The offering will conclude when the Company has sold all of the 10,000,000 shares of common stock offered by it. The Company may, in its sole discretion, decide to terminate the registration of the shares offered by the Company. |
Risk Factors | An investment in our common stock is highly speculative and involves a high degree of risk. See Risk Factors beginning on page 7. |
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An investment in our common stock is highly speculative, involves a high degree of risk, and should be made only by investors who can afford a complete loss. You should carefully consider the following risk factors, together with the other information in this prospectus, including our financial statements and the related notes, before you decide to buy our common stock. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially adversely affected, the trading of our common stock could decline, and you may lose all or part of your investment therein.
Risks Relating to the Early Stage of our Company
We are an operational company and our success is subject to the substantial risks inherent in the establishment of any business venture.
The implementation of our business strategy is ongoing. Our business and operations should be considered to be in an early stage and subject to all of the risks inherent in the establishment of any business venture. Any future success that we might enjoy will depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our company.
We have suffered operating losses.
We had an accumulated deficit of ($14,021,117) as of December 31, 2018, but we do not expect to continue to incur significant set up expenses in the foreseeable future related to the completion of development and commercialization of our products.
We may have difficulty raising additional capital, which could deprive us of necessary resources.
We expect to continue to devote significant capital resources to fund set up and marketing. In order to support the initiatives envisioned in our business plan, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships or other arrangements. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects for development of competitive technology by others. Because our common stock is not listed on a major stock market, many investors may not be willing or allowed to purchase it or may demand steep discounts. Sufficient additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our common stock.
We expect to raise additional capital during 2020 but we do not have any firm commitments for funding. If we are unsuccessful in raising additional capital, or the terms of raising such capital are unacceptable, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.
Failure to effectively manage our growth could place strains on our managerial, operational and financial resources and could adversely affect our business and operating results.
Our growth has placed, and is expected to continue to place, a strain on our managerial, operational and financial resources. Further, if our business grows, we will be required to manage multiple relationships. Any further growth by us, or an increase in the number of our strategic relationships will increase this strain on our managerial, operational and financial resources. This strain may inhibit our ability to achieve the rapid execution necessary to implement our business plan, and could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our company.
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Risks Relating to Our Business
We have substantial sales and marketing experience, which should decrease the risk that our business will fail.
Our officers, who will be responsible for marketing our products to potential users, have substantial sales and marketing experience. Further, we have budgeted amounts toward sales and marketing efforts over the next 12 months, which by industry standards is a limited amount of capital with which to launch our effort. Given the marketing budget and experience of our officers, there still can be no assurance that such efforts will be successful. Further, if our initial efforts to create a market for our newer products are not successful, there can be no assurance that we will be able to attract and retain qualified individuals with marketing and sales expertise to attract customers to our website “https://shebeverages.com” which website nor its contents are not incorporated as part of this prospectus. Our future success will depend, among other factors, upon whether our newer products can be sold at a profitable price and the extent to which consumers acquire, adopt, and continue to use them. There can be no assurance that our newer products will gain wide acceptance in its targeted markets or that we will be able to effectively market our products.
We may not be able to execute our business plan or stay in business without additional funding.
Our ability to generate future operating revenues depends in part on whether we can obtain the financing necessary to implement our business plan. We will likely require additional financing through the issuance of debt and/or equity in order to establish profitable operations, and such financing may not be forthcoming. As widely reported, the global and domestic financial markets have been extremely volatile in recent months. If such conditions and constraints continue or if there is no investor appetite to finance our specific business, we may not be able to acquire additional financing through credit markets or equity markets. Even if additional financing is available, it may not be available on terms favorable to us. At this time, we have not identified or secured sources of additional financing. Our failure to secure additional financing when it becomes required will have an adverse effect on our business.
If our estimates related to future expenditures are erroneous or inaccurate, it could have an adverse effect on our Company and you could lose your entire investment.
Our success is dependent in part upon the accuracy of our management’s estimates of our future cost expenditures for legal and accounting services (including those we expect to incur as a publicly reporting company), marketing and development expenses, and for inventory and administrative expenses. If such estimates are erroneous or inaccurate, or if we encounter unforeseen costs, we may not be able to carry out our business plan, which could result in the failure of our business and the loss of your entire investment.
We will need to achieve commercial acceptance of our newer product to generate revenues and achieve profitability.
We cannot predict when significant commercial market acceptance for our newer products will develop, if at all, and we cannot reliably estimate the projected size of any such potential market. If markets fail to accept our newer products, we may not be able to generate revenues from the commercial application of our technologies. Our revenue growth and achievement of profitability will depend substantially on our ability to introduce new products that are accepted by customers. If we are unable to cost-effectively achieve acceptance of our newer products by customers, or if the associated products do not achieve wide market acceptance, our business will be materially and adversely affected.
We are a small company with limited resources relative to our competitors and we may not be able to compete effectively.
The product marketing services of our competitors have longer operating histories, greater resources and name recognition, and a larger base of customers than we have. As a result, these competitors will have greater credibility with our potential customers. They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion, and sale of their products than we may be able to devote to our products.
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Our Chief Financial Officer (CFO) has other time commitments that may prevent him from devoting full-time attention to our operations, which may affect our operations.
While our Chairperson of Finance (COF), Sheila Crouch, is a full-time executive, our CFO, George Mathew, dedicates the majority of his working time, but not his full working time, to our business. Our COF has focused on building a finance bench with succession in mind, with a team to compliment at IPO status. The CFO is dedicated to the proper management of the Company’s financial operations and prioritizes his responsibilities to the Company. Our other officers and directors are responsible for all our business activities, and currently devote their full working time to our operations and management. Our officers and directors, with the exception of our CFO, have no other material work obligations and time commitments. Additionally, if our officers and directors become unable to handle the daily operations on their own, we may be required to hire additional qualified personnel to replace them in a timely manner.
Risks Relating to our Stock
The offering price of $15.00 per share is arbitrary.
The offering price of $15.00 per share has been arbitrarily determined by our management and does not bear any relationship to the assets, net worth or projected earnings of the Company, or any other generally accepted criteria of value.
We have no firm commitments to purchase any shares.
We have no firm commitment for the purchase of any shares, therefore there is no assurance that a trading market will develop or be sustained. The Company has not engaged a placement agent or broker for the sale of the shares but may incur offering expenses such as printing, marketing, shipping and blue sky or broker related costs (as required by certain states). The Company may be unable to identify investors to purchase the shares and may have inadequate capital to support its ongoing business obligations.
All proceeds from the sale of shares offered by the Company will be immediately available for use by the Company once the minimum offering amount it reached.
We have not established an escrow to hold any of the proceeds from the sale of the shares offered by the Company. As a result, all proceeds from the sale of shares offered by the Company will be available for immediate use by the Company once the minimum offering amount is reached. The proceeds of the sale may not be sufficient to implement the Company’s business strategy.
Our shares are not currently traded on any market or exchange. We will apply to have our common stock traded on NASDAQ; there is no guarantee that our shares will ever be quoted or listed on an exchange, which could severely impact their liquidity.
Currently our shares are not traded on any market or exchange. We will apply to have our common stock quoted via the NASDAQ Capital Market. Therefore, our common stock is expected to have fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for the common stock. It is possible that the Company’s shares may never be quoted or listed on an exchange.
An investor’s ability to trade our common stock may be limited by trading volume.
A consistently active trading market for our common stock may not occur. A limited trading volume may prevent our shareholders from selling shares at such times or in such amounts as they may otherwise desire. The Company’s shares may never be quoted or listed on an exchange.
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We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.
Recent federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements; others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or the NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges and NASDAQ, are those that address the board of Directors independence, audit committee oversight, and the adoption of a code of ethics. We have not yet adopted any of these corporate governance measures, and since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, shareholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees, may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.
Because we will not pay dividends in the foreseeable future, stockholders will only benefit from owning common stock if it appreciates.
We have never paid dividends on our common stock and we do not intend to do so in the foreseeable future. We intend to retain any future earnings to finance our growth. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase our common stock.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:
Factors that might cause these differences include the following:
· | the ability of the Company to offer and sell the shares of common stock offered hereby; |
· | the integration of multiple technologies and programs; |
· | the ability to successfully complete development and commercialization of sites and our company’s expectations regarding market growth; |
· | changes in existing and potential relationships with collaborative partners; |
· | the ability to retain certain members of management; |
· | our expectations regarding general and administrative expenses; |
· | our expectations regarding cash balances, capital requirements, anticipated revenue and expenses, including infrastructure expenses; and |
· | other factors detailed from time to time in filings with the SEC. |
In addition, in this prospectus, we use words such as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” and similar expressions to identify forward-looking statements.
In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company will be required to update any forward-looking statements as required by law.
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With respect to up to 10,000,000 shares of common stock to be sold by the Company, unless we provide otherwise in a supplement to this prospectus, we intend to use the net proceeds from the sale of our securities for general corporate purposes, which may include one or more of the following:
· | working capital; |
· | Set-up and marketing activities; |
· | capital expenditures. |
Our management will have broad discretion in the allocation of the net proceeds of any offering, however, the following table outlines management’s current anticipated use of proceeds given that the offering is being completed on a best-efforts basis and may not result in the Company receiving the entire offering amount. The offering is being conducted by the officers and directors under the safe harbor provision and is a best-efforts, self-underwritten offering. In the event that 100% of the funds are not raised, management has outlined how they perceive the funds will be allocated, at various funding levels. The offering scenarios are presented for illustrative purposes only and the actual amount of proceeds, if any, may differ. The offering expenses of any selling shareholders are not included in this table, and any such expenses that were to be incurred would be paid out of General Operating Expenses. The table is set out in the perceived order of priority of such purposes, provided however; management may reallocate such proceeds among purposes as the situation dictates. Pending such uses, we intend to place such funds in an FDIC insured bank account.
% of Shares Sold | Min | 25% | 50% | 75% | 100% | |||||||||||||||
# of Shares Sold | 100,000 | 2,500,000 | 5,000,000 | 7,500,000 | 10,000,000 | |||||||||||||||
Gross Proceeds | $ | 1,500,000 | $ | 37,500,000 | $ | 75,000,000 | $ | 112,500,000 | $ | 150,000,000 | ||||||||||
Less: Offering Expenses* | $ | 150,000 | $ | 3,750,000 | $ | 7,500,000 | $ | 11,250,000 | $ | 15,000,000 | ||||||||||
Net Proceeds to the Company | $ | 1,350,000 | $ | 33,750,000 | $ | 67,500,000 | $ | 101,250,000 | $ | 135,000,000 | ||||||||||
Use of Proceeds: | ||||||||||||||||||||
Legal & Accounting | $ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | $ | 100,000 | ||||||||||
General Operational Expenses | $ | 40,000 | $ | 288,000 | $ | 360,000 | $ | 582,600 | $ | 1,042,600 | ||||||||||
Outsource Services | $ | 30,183 | $ | 120,730 | $ | 430,190 | $ | 503,320 | $ | 628,320 | ||||||||||
Material-Inventory | $ | 1,179,817 | $ | 33,241,270 | $ | 66,609,810 | $ | 100,064,080 | $ | 133,229,080 | ||||||||||
Total | $ | 1,350,000 | $ | 33,750,000 | $ | 67,500,000 | $ | 101,250,000 | $ | 135,000,000 |
* Offering Expenses $1.50 per share include printing, marketing, shipping and blue sky or broker related costs.
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The following table sets forth our capitalization as of June 30, 2019:
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ | 77,260 | ||
Accounts receivable | 2,479 | |||
Advances, related party | 269,880 | |||
Inventory | 166,160 | |||
Prepaid expenses | 105,330 | |||
Total current assets | 621,109 | |||
Right-of-use assets - operating leases | 204,000 | |||
Right-of-use asset - financing lease | 50,250 | |||
Property, plant, and equipment, net | 3,102,051 | |||
Purchased intangible assets and goodwill, net | 7,181,651 | |||
Deposits | 82,103 | |||
TOTAL ASSETS | $ | 11,241,164 | ||
LIABILITIES | ||||
CURRENT LIABILITIES: | ||||
Accounts payable | $ | 2,843 | ||
Lease liability, current - operating leases | 102,000 | |||
Lease liability, current - financing lease | 12,403 | |||
Total current liabilities | 117,246 | |||
Lease liability, less current portion - operating leases | 102,000 | |||
Lease liability, less current portion - financing lease | 29,321 | |||
TOTAL LIABILITIES | 248,567 |
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The net tangible book value of our company as of June 30, 2019 was $3,810,946 ($0.18 per share of common stock based on 21,258,712 shares issued and outstanding). Net tangible book value per share is determined by dividing the tangible book value of the Company (total tangible assets, less total liabilities) by the number of outstanding shares of our common stock on June 30, 2019.
Our net tangible book value and our net tangible book value per share will be impacted by the 10,000,000 shares of common stock which may be sold by our company. The amount of dilution will depend on the number of shares sold by our company. The following example shows the dilution to new investors at an assumed offering price of $15.00 per share.
We are registering 10,000,000 new shares of common stock for sale by our company. If all shares are sold at the offering price of $15.00 per share less estimated offering expenses, our net tangible book value and per share dilution under various offering scenarios as of June 30, 2019, is illustrated in the following table:
$150,000,000 Offering (100%) | $112,500,000 Offering (75%) | $75,000,000 Offering (50%) | $37,500,000 Offering (25%) | |||||||||||||
Number of current shares held | 21,258,712 | 21,258,712 | 21,258,712 | 21,258,712 | ||||||||||||
Number of new shares issued | 10,000,000 | 7,500,000 | 5,000,000 | 2,500,000 | ||||||||||||
Total number of new shares held | 31,258,712 | 28,758,712 | 26,258,712 | 23,758,712 | ||||||||||||
Net tangible book value before this offering | $ | 3,810,946 | $ | 3,810,946 | $ | 3,810,946 | $ | 3,810,946 | ||||||||
Net proceeds to the Company | 135,000,000 | 101,250,000 | 67,500,000 | 33,750,000 | ||||||||||||
Net tangible book value after this offering | $ | 138,810,946 | $ | 105,060,946 | $ | 71,310,946 | $ | 37,560,946 | ||||||||
Assumed public offering price per share | $ | 15.00 | $ | 15.00 | $ | 15.00 | $ | 15.00 | ||||||||
Net tangible book value per share before this offering | $ | 0.179 | $ | 0.179 | $ | 0.179 | $ | 0.179 | ||||||||
Increase attributable to new investors | $ | 4.262 | $ | 3.474 | $ | 2.537 | $ | 1.402 | ||||||||
Net tangible book value per share after this offering | $ | 4.441 | $ | 3.653 | $ | 2.716 | $ | 1.581 | ||||||||
Dilution per share to new stockholders | $ | 10.559 | $ | 11.342 | $ | 12.284 | $ | 13.419 |
Control
The issuer is registering 6,835,967 shares of common stock that is collectively held by 586 shareholders. These shareholders will continue to own the majority of the issuer’s registered common stock after the offering.
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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is not currently traded on any exchange. We cannot assure that any market for the shares will develop or be sustained.
We have not paid any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. We intend to retain any earnings to finance the growth of our business. We cannot assure you that we will ever pay cash dividends. Whether we pay cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, capital requirements and any other factors that the Board of Directors decides are relevant. See Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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DESCRIPTION OF BUSINESS AND PROPERTY
Company Overview
SHE Beverage Company, Inc. is a specialty beverage producer with a portfolio of subsidiary businesses that all share a focus on women’s tastes and preferences. SHE was founded in 2014 by two women entrepreneurs, Lupe Rose and Sonja Shelby, and soon added a third co-founder, Katherine Dirden. The Company continues to be led by its three co-founders and a predominantly female executive team.
Specialty Beverage Focus
SHE’s primary focus is producing specialty beverages using proprietary formulations that are clearly differentiated from competing options. For example, SHE’s hard lemonade is popular for its sweet taste, higher alcohol content of around 10% ABV, and vibrant colors. SHE also produces craft beers catering to women’s palates and premium water adjusted for alkalinity or incorporating electrolytes and/or cannabidiol (CBD). SHE has also formulated and plans to release a line of supplement beverages that are designed to alleviate certain health issues, including a prenatal water that reduces the need for prenatal vitamins. Other formulated specialty beverages include hard seltzers, designer sodas, nitrogen brewed coffee, select wines, and antioxidant shots.
Additionally, SHE produces specialty beverages that are catered to specific audiences and events. For example, SHE produced a blue hard lemonade for the Los Angeles Dodgers World Series games during September 2017 as a trial run. SHE is exploring producing additional hard lemonade varieties to match team colors at different sports stadiums and for large, special events.
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Proprietary Formulations
SHE’s beverages are crafted with proprietary formulations after extensive research and development (R&D) efforts. SHE views its R&D as a key differentiator from much of the competition and currently safeguards its formulations as trade secrets. SHE believes that its R&D efforts, coupled with its marketing strengths and focus on women, will lead to greater market share and pricing power over time.
Tap Room & Related Subsidiaries
SHE is currently constructing a tap room and brewery near its headquarters location in Lancaster, California. SHE plans to use the tap room to directly distribute its specialty beverages to consumers as well as for marketing purposes and to continue to generate opportunistic revenue from special event rentals.
SHE established a legal cannabis product subsidiary called Pink Leaf after the acquisition of Elite Green Solutions in September 2018. Pink Leaf is currently focused on researching and developing a line of cannabis-infused products that are inspired by SHE’s focus on women’s tastes and preferences. SHE also expects there to be synergies between its specialty drink business and Pink Leaf. Additionally, Pink Leaf is exploring the development of a wellness resort, pending further market research, centered on cannabis-related treatments.
SHE created a subsidiary of premium soap and bath products under the Mink Bath Bombs and Bath Hi brands following its October 2018 acquisition of Mink Bath Bombs (MBB). The products are made with 100% natural ingredients such as cannabis, cocoa butter, citric acid, baking soda, and essential oils. R&D related to cannabis-related products is done in conjunction with SHE’s Pink Leaf subsidiary. SHE has market tested MBB’s products and built up inventory that is ready to distribute.
SHE acquired the Women’s Football League Association (WFLA) in July 2019. The WFLA intends to develop women’s football with its own set of rules and procedures that may become completely different from mainstream football over time. The WFLA also plans to showcase the entertainment value of its football games, including elaborate half-time shows featuring major celebrities. SHE plans to run the WFLA as an independent subsidiary. In addition to the growth potential of the WFLA, SHE also expects to realize marketing and beverage distribution synergies.
The WFLA is taking advantage of this once in a lifetime moment to be the first successful Women’s Football Organization. When you think WFLA, think Women’s NFL, the Elite Women’s Football League that will be recognized as the first ever Women’s Football Organization to execute the Full Tackle Sport like no other organization has delivered, with compensations to match. The WFLA has already generated much anticipation with its season launch in 2021. Additionally, the league has already been highlighted as the first to succeed in this much awaited arena. The State of Nevada and City of Las Vegas proclaimed October 19th as WFLA day. The League continues to grow relationships across the globe to become the first ever league to execute Women’s Tackle Football.
Portfolio of Startups and New Key Products
SHE controls a portfolio of independently-run technology startups. The startups each have their own management teams and were primarily acquired through performance-based equity exchanges.
Brandyay: A high-quality cut and sew production platform with all-over prints, automated size-grading, and a wide variety of customizable products that is currently in development. Brandyay plans to offer the possibility for independent and startup fashion designers to create on-demand clothing lines at reasonable cost and with no minimum purchase requirements. SHE owns 90% of Brandyay while the remaining 10% is owned by the Company’s founders.
SWAPP: A customer relationship management (CRM) app originally designed to help local churches canvas neighborhoods for their outreach efforts. The app’s prospecting tools can also be used by other companies and organizations to advance their sales efforts. SHE owns 90% of SWAPP while the remaining 10% is owned by the company’s founders.
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SHE Meets dating app: SHE Meets is a dating app created by SHE from a woman’s perspective offering strong privacy controls and a concierge service to encourage romantic connections. SHE believes that the app’s creative concierge and transportation-related features will clearly differentiate the app from competing online dating platforms. SHE owns 100% of SHE Meets.
Use of Event Sales and Outsourcing
In order to conserve capital and minimize the need for additional equity issuances, SHE Beverage rented out its premium event space, which is currently being converted to a tap room and brewery, to generate additional income. SHE also sold its proprietary products during such events. SHE also outsourced many of its labor needs, including senior management roles, to minimize its fixed headcount and related expense. It has since converted most outsourced roles to full-time positions.
Primary Use of Capital Going Forward
SHE plans to use funds raised in the near-term to primarily fund its specialty beverage marketing expenses, production, and greater distribution through its partners’ larger networks. SHE currently distributes its products through large retailers such as Walmart, Target, BevMo, and Total Wine & More in the areas surrounding its Lancaster, California headquarters as well as nationally through Amazon.com. SHE also has the option of providing specialty beverages, particularly hard lemonade, to large sports venues once it is able to produce enough inventory. Additionally, SHE entered into a distribution agreement with MHW Limited on July 25, 2018 to provide global distribution of its specialty beverage products pending inventory availability.
SHE will also use funds raised to provide capital to its subsidiaries and portfolio businesses based on performance and market demand as well as to fund potential acquisitions and for general corporate purposes.
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http://shebeverages.com
On September 9, 2018, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Elite Green, a sole proprietorship, to which all of the right, title, and interest in and to 100% of the ownership interests in Elite Green Solutions was exchanged for $40,000 and 400,000 shares of common stock of SHE Beverage Company, Inc. at $2.50 per share for total purchase price of $1,040,000.
On October 1, 2018, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Mink Bath Bombs, a sole proprietorship, to which all of the right, title, and interest in and to 100% of the ownership interests in Mink Bath Bombs was exchanged for 200,000 shares of common stock of SHE Beverage Company, Inc. at $2.50 per share for total purchase price of $500,000.
On February 1, 2019, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Le Chic Home, A California dba, to which all of the right, title, and interest in and to 100% of the membership interests was exchanged for 110,000 shares of common stock of SHE Beverage Company, Inc. valued at $2.50 per share for total purchase price of $275,000.
On May 15, 2019, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Brandyay, LLC to which all of the right, title, and interest in and to 90% of the issued and outstanding membership interests in Brandyay, LLC was exchanged for 2,160,000 shares of common stock of SHE Beverage Company, Inc. valued at $2.50 per share for total purchase price of $5,400,000.
On July 30, 2019, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Shelby Dirden & Rose Investment Group, Inc. (a related party) to acquire 100% of the issued and outstanding shares of the Woman’s Football League Association owned by Shelby Dirden & Rose Investment Group, Inc. in a transfer of net assets at historical cost between entities under common control transaction.
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On September 11, 2019, SHE Beverage Company, Inc. entered into an Acquisition and Stock Exchange Agreement with Buildingit, LLC to acquire 90% of the issued and outstanding membership interests in Buildingit, LLC was exchanged for 1,900,000 shares of common stock of SHE Beverage Company, Inc. at $2.50 per share for total purchase price of $4,750,000.
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act
The Company shall continue to be deemed an emerging growth company until the earliest of:
(A) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,007,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(B) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this title;
(C) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’.
As an emerging growth company, the Company is exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.
Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
As an emerging growth company, the company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.
The Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.
Employees
As of November 1, 2019, we have a small number of employees, but have four (4) officers and directors who are non-employee Directors. We have no agreements with any of our management/subcontractors for any services. We consider our relations with our subcontractors to be good.
Description of Property
We currently lease office space at 42601 8th Street West Suite 108, Lancaster, CA 93534 as our principal offices. We believe these facilities are in good condition, but that we may need to expand our leased space as our business efforts increase. We have 3 other leased office spaces: 44950 Valley Central Way #106, Lancaster, Ca 93536 which is used as corporate office and sales staff space,44950 Valley Central Way #101, Lancaster, CA 93536 Brewery and taproom and our Warehouse location: 104 East Ave K-4 Unit C, Lancaster, CA 93535. We also own five vacant lots located in Mojave, Nevada and Reno, Nevada. In 2019, we acquired real estate at 1243 West Ave H-4, Lancaster, CA 93534, 2833 West Ave K-12 #133, Lancaster, CA 93536, 44460 15th Street East No #1, Lancaster, CA 93535.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with (i) our audited financial statements as of December 31, 2018 and 2017 that appear elsewhere in this registration statement. This registration statement contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments. For information regarding risk factors that could have a material adverse effect on our business, refer to the Risk Factors section of this prospectus beginning on page 7.
Plan of Operation
SHE Beverage Company is a specialty beverage producer with a portfolio of subsidiary businesses that all share a focus on women’s tastes and preferences. SHE was incorporated in the state of California in January 6, 2015. SHE’s primary focus is producing specialty beverages using proprietary formulations that are clearly differentiated from competing options.
SHE produces hard lemonades and craft beers catering to women’s palates as well as premium water adjusted for alkalinity or incorporating electrolytes and/or cannabidiol (CBD). SHE has also formulated and plans to release a line of supplement beverages that are designed to alleviate certain health issues, including a prenatal water that reduces the need to for prenatal vitamins. Other formulated specialty beverages include hard seltzers, designer sodas, nitrogen brewed coffee, select wines, and antioxidant shots.
Additionally, SHE produces specialty beverages that are catered to specific audiences and events.
SHE is currently constructing a tap room and brewery near its headquarters location in Lancaster, California. SHE plans to use the tap room to directly distribute its specialty beverages to consumers as well as for marketing purposes and to continue to generate opportunistic revenue from special event rentals.
In addition to its specialty beverage division, SHE has a legal cannabis product subsidiary called Pink Leaf, a subsidiary of premium soap and bath products under the Mink Bath Bombs and Bath Hi brands and owns the Women’s Football League Association (WFLA).
SHE controls and intends to further develop a portfolio of independently-run technology startups. The startups will each have their own management teams. These startups include a high-quality cut and sew production platform, a customer relationship management (CRM) app, a dating app created from a woman’s perspective offering strong privacy controls and a concierge service to encourage romantic connections.
SHE plans to grow its specialty beverage business through increased marketing, production, and distribution through its partners’ larger networks. SHE is also currently constructing a tap room and brewery near its headquarters location in Lancaster, California. SHE plans to use the tap room to directly distribute its specialty beverages to consumers as well as for marketing purposes and to continue to generate opportunistic revenue from special event rentals.
SHE plans to provide capital to its other subsidiaries and portfolio businesses based on performance and market demand.
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Liquidity and Capital Resources
As of December 31, 2018, we had current assets of $513,597, consisting of $334,218 in cash, $25,000 in accounts receivable from a related party, $122,354 in inventory, and $32,025 in prepaid expenses. Current liabilities at December 31, 2018, totaled $45,010. As of December 31, 2017, we had current assets of $43,747, consisting of $246 in cash $372 in accounts receivable, $41,478 in inventory and $1,651 in prepaid expenses. Current liabilities at December 31, 2017, totaled $59,359.
As of June 30, 2019, we had current assets of $621,109, consisting of $77,260 in cash, $2,479 in accounts receivable, $269,880 in accounts receivable from a related party, $166,160 in inventory, and $105,330 in prepaid expenses. Current liabilities at June 30, 2019, totaled $117,246.
Funding requirements
Our material commitments for the next twelve months include payment on operating and financing leases totaling $82,405 and $16,405, respectively (including principal and interest repayments), and repayments on any credit line advances (there was no balance on the line of credit as of June 30, 2019 or December 31, 2018). However, with our anticipated growth we will require additional capital to meet our liquidity needs. Currently, the Company has determined that its anticipated monthly cash flow needs should not exceed $75,000 per month for 2020.
We anticipate that we will receive sufficient proceeds from investors through this offering, to continue the growth of our operations. However, there is no assurance that such proceeds will be received and there are no agreements or understandings currently in effect from any potential investors. The Company could continue operations on a scaled down basis with the cash on hand for approximately 6 months and with the minimum offering for a scaled down basis for 12 months. The Company has had significant revenues to date and it is anticipated that the Company will continue to grow and increase revenues from operations in the coming year; however, management has assumed for planning purposes only that it may need to sell common stock, take loans or advances from officers, directors or shareholders or enter into debt financing agreements in order to meet our cash needs over the coming twelve months. The Company has no agreements or understandings for any of the above-listed financing options.
The Use of Proceeds section includes a detailed description of the use of proceeds over the differing offering scenarios of 100%, 75%, 50% and 25%. As the Company’s expenses are relatively stable, unless additional products are rolled out, the Company believes it can fund its present operations with projected revenues together with offering proceeds under any of the offering scenarios. The Company will consider raising additional funds during 2020 through sales of equity, debt and convertible securities, if it is deemed necessary.
SHE Beverage Company, Inc. has no intention in investing in short-term or long-term discretionary financial programs of any kind.
Results of Operations
During the year ended December 31, 2018, our revenue was $1,729,199, with cost of sales of $812,021, operating expenses of $10,342,593, and other expenses of $13,690. As a result, we have reported a net loss of $9,439,105 for the year ended December 31, 2018. For the year ended December 31, 2017, our revenue was $1,722,360, with cost of sales of $776,214, operating expenses of $1,565,779, and other expenses of $6,126. As a result, we have reported a net loss of $625,759 for the year ended December 31, 2017. The vast increase in the operations of the Company is the reason for the increase in expenses.
During the six months ended June 30, 2019, our revenue was $742,416, with cost of sales of $433,236, operating expenses of $5,231,252, and other expenses of $2,495. As a result, we have reported a net loss of $4,924,567 for the six months ended June 30, 2019. For the six months ended June 30, 2018, our revenue was $857,307, with cost of sales of $394,824, operating expenses of $2,816,582, and other expenses of $3,091. As a result, we have reported a net loss of $2,357,190 for the six months ended June 30, 2018. The vast increase in the operations of the Company is the reason for the increase in expenses.
During the three months ended June 30, 2019, our revenue was $386,647, with cost of sales of $180,993, operating expenses of $2,509,435, and other expenses of $1,248. As a result, we have reported a net loss of $2,305,029 for the three months ended June 30, 2019. For the three months ended June 30, 2018, our revenue was $421,861, with cost of sales of $182,779, operating expenses of $1,749,388, and other expenses of $1,510. As a result, we have reported a net loss of $1,511,816 for the three months ended June 30, 2018. The vast increase in the operations of the Company is the reason for the increase in expenses.
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Off-Balance Sheet Arrangements
We do not have any 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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our financial statements, which we discuss under the heading “Results of Operations” following this section of our MD&A. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Use of Estimates
The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
Revenue Recognition
The Company’s revenues accounted for under ASC 606 generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price.
The Company recognizes revenue for the amount of consideration expected to be collected from the customers, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and returns. The Company reserves for estimated returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly. Please see the detailed policy in Note 2.
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Executive Officers
Name | Age | Position |
Lupe Rose | 50 | President & Director |
Sonja Shelby | 57 | Treasurer & Director |
Katherine Dirden | 44 | Secretary & Director |
Sheila Shelby-Crouch | 51 | Chairperson of Finance |
George Mathew | 44 | Chief Financial Officer |
Directors, Executive Officers, Promoters and Control Persons
Lupe Rose: President, CEO & Chairperson of the Board
CEO Lupe Rose has a long track record of working with major and independent artists such as Nick Cannon, Angie Stone, Jon B, Cece Peniston, Duane DaRock, Michael Beckwith, Jenni Rivera, JaRule, Destiny's Child and many more. Lupe Rose has also worked with major labels such as Sony, EMI, Interscope Records, Warner Chapel, Geffen Records, Universal Music Group, Arista Records, Bungalo Records and several others.
Rose has built several successful businesses and was devoting her time and resources to partnering with many commercial music giants to build a world-class Independent Music Corporation and was named The Independent Conglomerate of 2013 possessing many businesses in Music & Media.
In 2010, Rose’s aggression in the Political arena set her apart as a passionate, aggressive, experienced, geographical campaign expert in the new generation of street campaigning and social media political expertise, if you wanted to win your next campaign it was suggested you set aside time to meet this aggressive fund-raising community activist.
Rose has Co-Founded SHE Beverage Company, Inc., and has built the Company to its current success, creating and marketing its beverage catalogue, supplement line, company subsidiaries and has moved the Company to its current position.
Education: Business Administration with an Emphasis in Marketing at several undergraduate colleges, Other Professional Certificates in the field of Medicine, Journalism, Broadcasting, Education and Company Branding.
Rose has been recognized as a business leader in her field and has been highlighted in several magazine and newspaper articles and has been decorated as a maverick and business educator, empowering Women Entrepreneur’s across the globe.
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Sonja Shelby: VP, Treasurer & Director
Sonja F. Shelby attended Santa Monica and San Antonio Colleges. Her initial career focus was in the medical industry where she spent many years working in senior management at both UCLA & Cedar Sinai medical facilities.
Shelby later ventured into a business partnership with SHE Beverage Company, Inc.’s CEO, Lupe Rose, where they launched a music label in the entertainment industry, signing artist such as 10-time Diamond Recording artist Cece Peniston, Billboard charters LC Collins who has charted music with Donelle Jones, Vanessa Marie, Kontroversy Committee, and many Grammy Nominees.
After many years in the entertainment industry releasing music and touring, Shelby & Rose developed SHE Beverage Company, Inc. In 2009, they came up with the concept to create a beer catered to women by women and ended up shelving the company until 2014 when they fully launched.
Shelby is currently the Vice President of SHE Beverage Company, Inc., where she runs the day-to-day operations and Human Resources, and is the Vice Chair for the Company. Shelby has one son who works for SHE Beverage Company, Inc. as the General Manager.
Katherine Dirden: Secretary, COO & Director
Katherine Dirden was born in Miami Florida and moved to Southern California as a youth. Dirden’s parents were entrepreneurs most of her life where she felt fortunate to have them as an example to follow. Dirden had her first business at the age of 7 in Cuniculture and would sell to local pet stores.
After high school, Dirden focused her career in nursing spending 22 years with Kaiser Permanente. During her career, her specialty and focus became OBGYN and Nephrology where she developed a passion for Obstetrics. Because of Dirden’s love and personal attachment to Obstetrics, she opened a 3D/4D Ultrasound studio in Lancaster CA, with a business partner where the focus is to provide elective 3D/4D ultrasounds, childbirth classes, and other pediatric and maternity educational services to the community.
At the young age of 18, Dirden began her Investment Portfolio and educated herself in the Stock Market and Investment Properties. Fascinated with the current growing trends of Real Estate Flips, in 2005 she decided to go back to school to obtain a Real Estate License and shortly thereafter landed employment as an Agent with Keller Williams. To complement her real estate business, the Dirden’s launched a General Construction Company in 2011 called “Just Go Green,” specializing in the rehabilitation of investment properties, commercial work, and new buildouts for investment groups and city projects.
As Dirden continued to grow her financial portfolio, she and her husband began looking for additional business opportunities. Introduced to SHE Beverage Company, Inc., Dirden met with Lupe Rose CEO and Sonja Shelby Co-Owners of SHE Beverage Company, Inc. Dirden ultimately fell in love with the concept of the company and became SHE Beverage Company, Inc.’s first investor. As she continued to invest in SHE, Dirden established a working relationship with the pair, and later was offered an ownership position. In her role, Dirden assisted with the growth of the Company and with the formulation of product, eventually accepting her current position as Chief Operations Officer and Investor Relations Director. As COO for SHE Beverage Company, Inc., her role demands working with and securing contracts with tier 1 companies for product placement, brand and product onboarding, EFT set up and billing, company compliance, and ensuring the company has effective operational and financial procedures in place. Dirden also manages relationships with partners/vendors, partners with other C-level executives to accomplish short and long-term operational goals, assists with acquisitions of other companies, and diversity certification.
As Investor Relations Director, Dirden works with PCAOB certified auditors to complete the SEC required audit for S-1 prospectus filing, educates investors about SHE Beverage Company, Inc., and responds to investor inquiries in person and over the phone, 1:1 and in group settings. As the need arises, she can also be found tracking shareholder ownership, reviewing investor regulatory filings, and managing investor accounts with the transfer agent. Dirden will also partner on any special projects including capital markets, corporate development and various other corporate events and works with legal counsel and consultants to ensure compliance on regulatory matters, all while participating in seed funding, series A and series B funding. Dirden focuses her daily activities with SHE Beverage Company, Inc. on growing the brand and taking the company public with business partners Rose & Shelby.
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George Mathew: Chief Financial Officer
Mr. Mathew is a former investment banker who has worked on M&A, IPO, and fixed income transactions with a cumulative deal value of over $20 billion while at firms including Salomon Smith Barney and Morgan Stanley. He was also on the management committee of Houston’s largest independent bank, Amegy.
In addition to banking, George coded and developed the top iOS real estate investing app, the iOS app supporting America’s largest online marketplace for homemade food, and a data-driven, automated financial advisor focused on helping middle-class Americans optimize their savings, investments, and debt.
George graduated Phi Beta Kappa from Johns Hopkins University and is a Fulbright Scholar. He was born and raised in Houston, Texas.
Sheila Shelby-Crouch: Chairperson of Finance
Ms. Shelby-Crouch was born and raised in Los Angeles, CA. Sheila was hired by Wells Fargo Bank in December of 1986. Sheila continued to work and attend classes at Mount San Antonio College, CA and in June 1999, Sheila earned an Associate of Science Degree in Finance.
While at Wells Fargo, Sheila received numerous promotions and achievements. Sheila retired from Wells Fargo in July 2019 as a Senior Operations Manager in Armored Transportation. Sheila is now Chairman of Finance with SHE Beverage Company, Inc. Sheila is a highly accomplished professional with over 25 years of management experience and has a solid background in operations, business development, financial budgeting/forecasting, risk mitigation, compliance policies, information technology, staff training/development, vendor management, change management, project management and turnaround situations with large and small business units. Sheila is a results-orientated, decisive leader, with proven success in streamlining operations, reducing costs, and improving productivity. Sheila thrives in a fast-paced, growth-orientated, highly competitive environment where partnerships and collaboration are highly valued. From May 2005 to October 2009, Sheila successfully managed the largest ATM processing site for Wells Fargo with a combined staff of over 200 exempt and non-exempt team members and a financial budget of over $7MM. Sheila is a strong believer in the power of positive thinking and diversity in the workplace. Sheila chaired the EUS Diversity and Inclusion Team from November 2014 to September of 2016. This was a great accomplishment to work with and network with all levels of Wells Fargo leaders and team members. The newsletter “The Outreach Beacon” that was created from the group, is still in circulation today and provides diversity updates to the entire organization.
Brandon Shelby: General Manager
Born to a single mother in West Covina, California, Brandon was taught to rise above adversity from a young age. During his adolescent years, he specifically took interest in entertainment creating dance routines and singing in front of anyone who would listen. As a teenager, he expanded his interests into sports and became quite competitive, igniting within himself the fire to win every time. These qualities remained and shaped Mr. Shelby, paving the way for a successful future.
After moving to Palmdale, California, Brandon took a strong interest in business, even joining the Business Academy as a freshman in high school. Well into his Junior year, he was able to integrate additional business curriculum, and was recognized by the “Who’s Who Among American High Students.” He went on to graduate with great certainty about what he wanted to do.
In 2002, Brandon attended Antelope Valley College, at which time he studied film with a desire to become a producer/editor. However, after completing 3 full years, he no longer carried a desire in this industry and decided to work towards something more fulfilling. He took a break from school and made the choice to return to his first love and once again focused on music. Over time he studied the music industry thoroughly, familiarizing himself with contracts, and labels and artists, eventually getting signed as an artist and releasing his own material.
In 2014, unbeknownst to him, Brandon was asked to join the SHE Beverage Company, Inc. team, given his expertise and knowledge in management and business. He was brought on board to join the sales team, eventually climbing the ranks and becoming the General Manager of the company. As GM, Brandon directed and managed the organization's business activities, developed and implemented effective sales strategies, and was driven to ensure the overall success of SHE Beverage Company, Inc. His love for football and strong interest in advocating for women’s equality made Brandon an ideal team member to challenge the football dynamic, and work alongside the CEO to develop the women’s professional football league. Additionally, Brandon was instrumental in building the structure of the WFLA, named each franchise, developed the rules and regulations, as well as worked with legal teams from California and New York; two of the largest metropolitan cities to introduce the most profitable women’s professional football structure.
Brandon’s efforts have also been focused on athlete and franchise owner recruitment, writing bylaws, developing synergies by partnering with sponsors, venues, and entertainment. Brandon has vetted both owners and athletes to ensure they understand the WFLA Organization's purpose and legacy. His entertainment background brings the total fan experience to the fans as he understands the promotional and advertising aspect for the league. By overseeing daily business operations, and maintaining successful relationships with clients, Brandon now holds the position of WFLA Commissioner.
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Executive Compensation
Summary Compensation Table. The following table sets forth certain information concerning the annual compensation of our Chief Executive Officer and our other executive officers during the last two fiscal years.
(a) Name and Principal Position | (b) Year | (c) Salary | (d) Bonus | (e) Stock Awards | (f) Option Awards | (g) Non-equity Incentive plan compensation | (h) Nonqualified Deferred Compensation Earnings | (i) All Other Compensation | (j) Total Compensation | |||||||||||||||||||||||||||
Lupe Rose, President & Director | 2019 | $ | 250,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 250,000 | |||||||||||||||||||||||||
2018 | $ | 250,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 250,000 | ||||||||||||||||||||||||||
2017 | $ | 250,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 250,000 | ||||||||||||||||||||||||||
Sonja Shelby-VP, Treasurer & Director | 2019 | $ | 200,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 200,000 | |||||||||||||||||||||||||
2018 | $ | 200,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 200,000 | ||||||||||||||||||||||||||
2017 | $ | 200,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 200,000 | ||||||||||||||||||||||||||
Katherine Dirden, Secretary & Director | 2019 | $ | 175,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 175,000 | |||||||||||||||||||||||||
2018 | $ | 175,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 175,000 | ||||||||||||||||||||||||||
2017 | $ | 175,000 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 175,000 | ||||||||||||||||||||||||||
George Mathew, CFO * | 2019 | $ | 144,768 | 0 | 0 | 0 | 0 | 0 | 0 | $ | 144,768 | |||||||||||||||||||||||||
Sheila Shelby-Crouch, COF * | 2019 | $ | 225,000 | $ | 250,000 | 0 | 0 | 0 | 0 | 0 | $ | 475,000 |
* Hired in 2019.
Audit, Compensation and Nominating Committees. As noted above, we intend to apply for listing our common stock on the NASDAQ, which does require companies to maintain audit, compensation or nominating committees. The company’s shares may never be quoted on the NASDAQ or on an exchange. Considering the fact that we are an early stage company, we do not maintain standing audit, compensation or nominating committees. The functions typically associated with these committees are performed by the entire Board of Directors which currently consists of three members who are not considered independent.
27 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Principal Stockholders, Directors, Nominees and Executive Officers and Related Stockholder Matters
The following table sets forth, as of January 10, 2020, certain information with respect to the beneficial ownership of shares of our common stock by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock, (ii) each director or nominee for director of our Company, (iii) each of the executives, and (iv) our directors and executive officers as a group. Unless otherwise indicated, the address of each shareholder is c/o our company at our principal office address:
Beneficial Owner | Address | Number of Common Shares Beneficially Owned (*) | Percent of Class (**) | Number of Preferred Shares Beneficially Owned(*) | Percent of Class(**) | |||||||||||||
Lupe Rose | 42601 8th Street West Suite 108 Lancaster, CA 93534 | 1,040,000 | 3.4 | % | 7,500,000 | 37.5 | % | |||||||||||
Sonja Shelby | 42601 8th Street West Suite 108 Lancaster, CA 93534 | 1,040,000 | 3.4 | % | 7,500,000 | 37.5 | % | |||||||||||
Katherine Dirden | 42601 8th Street West Suite 108 Lancaster, CA 93534 | 800,000 | 2.6 | % | 5,000,000 | 25.0 | % | |||||||||||
All Directors and Officers as a Group (3 persons) | 2,880,000 | 9.40 | % | 20,000,000 | 100 | % |
(*) Beneficial ownership is determined in accordance with the rules of the SEC which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power with respect to those securities. Unless otherwise indicated, voting and investment power are exercised solely by the person named above or shared with members of such person’s household. This includes any shares such person has the right to acquire within 60 days.
(**) Percent of class is calculated on the basis of the number of shares outstanding on January 10, 2020 (30,918,492 common and 20,000,000 Preferred).
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
It is our practice and policy to comply with all applicable laws, rules and regulations regarding related person transactions, including the Sarbanes-Oxley Act of 2002. A related person is an executive officer, director or more than 5% stockholder of SHE Beverage Company, Inc., including any immediate family members, and any entity owned or controlled by such persons. Our Board of Directors (excluding any interested director) is charged with reviewing and approving all related-person transactions, and a special committee of our Board of Directors is established to negotiate the terms of such transactions. In considering related-person transactions, our Board of Directors takes into account all relevant available facts and circumstances.
Director Independence
Our Board of Directors has adopted the definition of “independence” as described under the Sarbanes Oxley Act of 2002 (Sarbanes-Oxley) Section 301, Rule 10A-3 under the Securities Exchange Act of 1934 (the Exchange Act) and NASDAQ Rules 4200 and 4350. Our Board of Directors has determined that its members do not meet the independence requirements.
28 |
Authorized and Issued Stock Number of Shares at January 10, 2020 | ||||||||
Title of Class | Authorized | Outstanding | ||||||
Common stock, $0.001 par value per share | 400,000,000 | 30,918,492 | ||||||
Class A Preferred stock, $0.001 par value per share | 20,000,000 | 20,000,000 | ||||||
Class B Preferred stock, $0.001 par value | 5,000,000 | 0 |
Common stock
The Company is authorized to issue 400,000,000 shares of common stock at $.001.
Dividends. Each share of common stock is entitled to receive an equal dividend, if one is declared, which is unlikely. We have never paid dividends on our common stock and do not intend to do so in the foreseeable future. We intend to retain any future earnings to finance our growth. See Risk Factors.
Liquidation. If our company is liquidated, any assets that remain after the creditors are paid and the owners of preferred stock receive any liquidation preferences, will be distributed to the owners of our common stock pro-rata.
Voting Rights. Each share of our common stock entitles the owner to one vote. There is no cumulative voting. A simple majority can elect all of the directors at a given meeting and the minority would not be able to elect any directors at that meeting.
Preemptive Rights. Owners of our common stock have no preemptive rights. We may sell shares of our common stock to third parties without first offering it to current stockholders.
Redemption Rights. We do not have the right to buy back shares of our common stock except in extraordinary transactions such as mergers and court approved bankruptcy reorganizations. Owners of our common stock do not ordinarily have the right to require us to buy their common stock. We do not have a sinking fund to provide assets for any buy back.
Conversion Rights. Shares of our common stock cannot be converted into any other kind of stock except in extraordinary transactions, such as mergers and court approved bankruptcy reorganizations.
Preferred stock
Class A Preferred
Class A Preferred has the same terms and rights as common stock with the exception that it carries 10 to 1 voting and conversion rights to common stock. The Board of Directors of the corporation, using its reasonable discretion, shall determine, either quarterly or annually at its discretion, the mechanism for conversion and shall promptly give notice (the “Notice”) to the then current holders of the Series A Preferred Stock. Each such notice shall be dated by the Board of Directors as of the date it is actually sent to the holders of the Series A Preferred Stock. Each share of Series A Preferred Stock may be converted into ten (10) shares of Common Stock as fully paid and non-assessable Common Stock.
Class B Preferred
Class B Preferred shares shall have the preferences, limitations, conversion, voting and any relative rights as determined by the Board of Directors at the time of issuance of each share of Series B Preferred Stock.
29 |
Limitations on Stockholder Actions
California RS provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he is not liable or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. CRS further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he is not liable pursuant to CRS or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court or other court of competent jurisdiction in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court or other court of competent jurisdiction shall deem proper.
Our bylaws provide as follows:
(a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or interstate representative is or was a director, officer or employee of the Corporation or of any corporation in which he served as such at the request of the Corporation shall be indemnified by the Corporation against the reasonable expenses, including attorney’s fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceeding, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for gross negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer, director or employee may be entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
30 |
The following table presents information regarding the selling stockholders and the shares that may be sold by them pursuant to this prospectus. See also Security Ownership of Certain Beneficial Owners and Management. These selling shareholders are Underwriters for this offering.
Contract Date | Registration 1/Investor 1 | Registration 2/Investor 2 | Registration 3/Investor 3 | Registration 4/Investor 4 | Total shares to be registered | |||||||
12/1/2018 | Niccole Culver | 200 | ||||||||||
12/3/2018 | Simeon Tyree Yarbrough | 20,000 | ||||||||||
12/4/2018 | Monique Dawnielle Aubry | Toni Maria Aubry | 1,000 | |||||||||
12/5/2018 | Cornelius L. Norwood | 24,000 | ||||||||||
12/10/2018 | Carlos Manuel Jimenez | 4,000 | ||||||||||
12/11/2018 | Brenda Newman | Dominique Woosley Patterson | 4,000 | |||||||||
12/11/2018 | Elaine Newton | 200 | ||||||||||
12/11/2018 | Julieta Elena Poroj | 200 | ||||||||||
12/11/2018 | Matthew Tate Rambur | 800 | ||||||||||
12/11/2018 | Quenton Bowden | 4,000 | ||||||||||
12/13/2018 | Erica Lynne Allbee | 16,000 | ||||||||||
12/13/2018 | Latoya Terry | 400 | ||||||||||
12/13/2018 | Shannon O'Toole | 4,000 | ||||||||||
12/13/2018 | Shirin Safiah Zavosh-Forrester | David M. Forrester | Tarley Anne Green | 2,000 | ||||||||
12/14/2018 | Justin Smerber | 12,000 | ||||||||||
12/16/2018 | Scott Cooper | 100,800 | ||||||||||
12/17/2018 | Joel Smerber | 12,000 | ||||||||||
12/17/2018 | Lynzi Boyle | Justin Boyle | 400 | |||||||||
12/18/2018 | Arlester Morris | 800 | ||||||||||
12/18/2018 | Patricia Tom | 16,000 | ||||||||||
12/18/2018 | Raquel Stage | 20,000 | ||||||||||
12/19/2018 | Yichiu Lee | 6,000 | ||||||||||
12/19/2018 | Anthony Ismael Moreno | 800 | ||||||||||
12/19/2018 | Anthony Lionel Jackson | 4,000 | ||||||||||
12/19/2018 | Calvin C. Powell | Barbara Powell | 2,000 |
31 |
12/19/2018 | Desiree Raquel Moreno | 800 | ||||||||||
12/19/2018 | Dominic Andre Moreno | 800 | ||||||||||
12/19/2018 | Julio Caesar Macias | 400 | ||||||||||
12/19/2018 | Marcus Daniel Moreno | 800 | ||||||||||
12/19/2018 | Ming Hong Chung | 400 | ||||||||||
12/20/2018 | Dennis James Milonas | 40,000 | ||||||||||
12/20/2018 | Kimberly Inez Carter | 400 | ||||||||||
12/20/2018 | Linton Wiley | 7,360 | ||||||||||
12/21/2018 | Dennis Raymond | 16,000 | ||||||||||
12/21/2018 | Gonzalo G. Martinez | 12,000 | ||||||||||
12/21/2018 | Kevin Hall | 2,000 | ||||||||||
12/21/2018 | Leah Ava Franklin | 2,000 | ||||||||||
12/21/2018 | Marguerite Himmons | 80,000 | ||||||||||
12/21/2018 | Mathew James Smerber | 56,200 | ||||||||||
12/21/2018 | Quantum Real Estate Investments, LLC | 20,000 | ||||||||||
12/21/2018 | Robert Lionel Jackson | 4,000 | ||||||||||
12/22/2018 | Bertram Day | Sherrie Day | 7,200 | |||||||||
12/23/2018 | Christopher Crouch | 26,000 | ||||||||||
12/23/2018 | Shihte Yang | Chiachien Liu | 2,000 | |||||||||
12/24/2018 | Kay Devore-Garth | 800 | ||||||||||
12/24/2018 | Robert L. Rodriguez | 4,000 | ||||||||||
12/26/2018 | Alvin Stafford Jr. | 20,000 | ||||||||||
12/26/2018 | Carly J Christensen | 1,400 | ||||||||||
12/26/2018 | Denise Harrell-McMillon | 400 | ||||||||||
12/26/2018 | Julie B. Sloan | 2,000 | ||||||||||
12/26/2018 | Micah David Tobon | 20,000 | ||||||||||
12/26/2018 | Nicole Alston-Rouzan | 400 | ||||||||||
12/26/2018 | Tamika Latoya Odom-Hooker | 2,000 | ||||||||||
12/26/2018 | Terald Smith | Angelica Smith | 400 | |||||||||
12/27/2018 | Odom Family Trust | 2,000 | ||||||||||
12/28/2018 | Jonathan Don Anderson-Ingebrigtsen | Jon-Andrew Anderson | 37,000 | |||||||||
12/28/2018 | Robert J. Barron | 800 |
32 |
12/30/2018 | Monica Ibanez | Gary Steven Jones | 24,800 | |||||||||
1/1/2019 | Hanbiao Wang | 20,000 | ||||||||||
1/2/2019 | Jody Foister | 8,000 | ||||||||||
1/2/2019 | Valentino Marciano | 2,000 | ||||||||||
1/3/2019 | Audrey Gregis | 4,000 | ||||||||||
1/3/2019 | Brandon Shelby | 110,000 | ||||||||||
1/3/2019 | David Crouch | 5,000 | ||||||||||
1/3/2019 | Deanne Dudley | 5,000 | ||||||||||
1/3/2019 | Jodi Lynne Smith Family Trust | 3,200 | ||||||||||
1/3/2019 | Kim Echols | 2,400 | ||||||||||
1/7/2019 | Mark Eugene Stevens | 4,000 | ||||||||||
1/7/2019 | Steven Chaney | 6,400 | ||||||||||
1/11/2019 | Jessica Ann Fisher | 4,000 | ||||||||||
1/11/2019 | John Charles Getskow Sr. | John Charles Getskow Jr. | 4,000 | |||||||||
1/11/2019 | John Charles Getskow Sr. | Janel Lea Piersma | 4,000 | |||||||||
1/11/2019 | John Charles Getskow Sr. | 8,000 | ||||||||||
1/11/2019 | John Charles Getskow Sr. | Jace Robert Getskow | 20,000 | |||||||||
1/11/2019 | John Charles Getskow Sr. | Jamie Marie Getskow-Voeltz | 20,000 | |||||||||
1/11/2019 | John Charles Getskow Sr. | Veronica Getskow | 40,000 | |||||||||
1/11/2019 | Karla Gomez | 36,000 | ||||||||||
1/11/2019 | Laura Gerdes | 20,000 | ||||||||||
1/12/2019 | Adam Charles Barber | 10,000 | ||||||||||
1/12/2019 | Dennis Sugasawara | 24,800 | ||||||||||
1/12/2019 | Jenni Duke | Ryan Duke | 3,000 | |||||||||
1/12/2019 | June Ann Verseput | Douglas James Verseput | 2,000 | |||||||||
1/12/2019 | Michael Thomas Perry | 2,000 | ||||||||||
1/12/2019 | Shawn Caldwell | Carla Caldwell | 16,800 | |||||||||
1/13/2019 | Sofiaan Fraval | 14,000 | ||||||||||
1/14/2019 | Ari Jason Rothberg | Catherine Joan Edinger. | 600 | |||||||||
1/14/2019 | Elizabeth Schiel | 800 | ||||||||||
1/14/2019 | Nisha Nitin Shah | 2,000 | ||||||||||
1/15/2019 | John Lamar Love | 20,400 | ||||||||||
1/15/2019 | Leslie Fox | 8,000 |
33 |
1/15/2019 | Regina Lisa Campbell | 2,000 | ||||||||||
1/15/2019 | Steven Robert Borge | Debra Kay Borge | 2,000 | |||||||||
1/17/2019 | Danielle Rambur | 2,400 | ||||||||||
1/17/2019 | Gene Rubin | 4,000 | ||||||||||
1/17/2019 | John Doane | 11,200 | ||||||||||
1/17/2019 | Joyce Veltri-Butera | 25,000 | ||||||||||
1/17/2019 | La Verne Warren | 800 | ||||||||||
1/17/2019 | Mark Jacob Naeyaert/IRA | 24,000 | ||||||||||
1/19/2019 | Brenda W. Campbell | 2,000 | ||||||||||
1/19/2019 | Jasmine Lew, M.D. | 6,800 | ||||||||||
1/19/2019 | Lindsey Marie Lawrence | 400 | ||||||||||
1/21/2019 | Curt Jablin | 20,000 | ||||||||||
1/21/2019 | Hector Franco | 2,000 | ||||||||||
1/21/2019 | Margaret Bonfield | 26,400 | ||||||||||
1/21/2019 | Perry James Crawford | 6,000 | ||||||||||
1/21/2019 | Steven Reed Prescott | 16,000 | ||||||||||
1/24/2019 | Anita Rhnea Campbell | Elwayne Bernard Campbell | 2,400 | |||||||||
1/24/2019 | Blaine Paul Blackstone | Michelle Anne Blackstone | 2,000 | |||||||||
1/24/2019 | Nino Blackburn | 800 | ||||||||||
1/24/2019 | Robin Britt Jefferis | 600 | ||||||||||
1/25/2019 | Caleb Findley Clubb | 4,000 | ||||||||||
1/25/2019 | Mark Chappell | Kelly Chappell | 16,000 | |||||||||
1/27/2019 | Rita Lorraine Carey | 136,000 | ||||||||||
1/28/2019 | Mary Anne Bennett | 24,800 | ||||||||||
1/28/2019 | Michael Stecher | 20,000 | ||||||||||
1/28/2019 | Paul J Carey Sr. | 32,000 | ||||||||||
1/29/2019 | Fernando Alvarez | 60,000 | ||||||||||
1/29/2019 | LaTausha Deshaun Cherrise Weber | 2,000 | ||||||||||
1/29/2019 | Lo Picolo | 4,000 | ||||||||||
1/30/2019 | Jeffrey Richards | Sharleen Richards | 2,000 | |||||||||
1/30/2019 | John Zeigler | 26,800 |
34 |
1/31/2019 | Charity Joy Schroeder | Kyle Caldwell | 9,600 | |||||||||
1/31/2019 | Larry Munchrath | 28,000 | ||||||||||
1/31/2019 | Tamara Lee Kirby | Reed C. Kirby | 1,200 | |||||||||
2/1/2019 | Juliette Perez | Martin Perez | 110,000 | |||||||||
2/4/2019 | Harry DaPena | 2,000 | ||||||||||
2/4/2019 | Lucy Katz | 17,000 | ||||||||||
2/7/2019 | Layercake Group, Inc. | 2,000 | ||||||||||
2/7/2019 | Malati Baker | 4,000 | ||||||||||
2/7/2019 | Peggy Klaus | 6,000 | ||||||||||
2/11/2019 | Tierney Turner | 400 | ||||||||||
2/12/2019 | Jeffrey Arnell Simpson | 20,000 | ||||||||||
2/14/2019 | Mike Matthews | 7,200 | ||||||||||
2/23/2019 | Aurelio Lopez Jr. | 2,000 | ||||||||||
2/23/2019 | Jason Chapman | 120,000 | ||||||||||
2/25/2019 | Jami Lynn Napolitani | 1,600 | ||||||||||
2/25/2019 | Kenneth Napper | 400 | ||||||||||
2/27/2019 | Jonna Leanne Clouse | 14,000 | ||||||||||
2/27/2019 | Rena M. DelHomme | 24,000 | ||||||||||
2/28/2019 | Ruth Broyde Sharone | 2,000 | ||||||||||
3/4/2019 | Kevin J. Woods | Tierney A. Smith | 2,000 | |||||||||
3/4/2019 | Kristine Kuhlman | 16,000 | ||||||||||
3/5/2019 | Michael V. Henderson | 124,000 | ||||||||||
3/5/2019 | Shawn James Driscoll | 50,000 | ||||||||||
3/5/2019 | Susan Jones | 8,000 | ||||||||||
3/6/2019 | Michael Goffinet | Sandra M. Goffinet | 52,800 | |||||||||
3/6/2019 | Pete Johnson | 79,800 | ||||||||||
3/7/2019 | Hendrick Torossian | 20,000 | ||||||||||
3/7/2019 | Rosie M. Evans | 4,800 | ||||||||||
3/8/2019 | Daniel Damian | 28,000 | ||||||||||
3/8/2019 | Demaurius E. Strong | 400 | ||||||||||
3/11/2019 | La Tanya Roquemore | 10,000 | ||||||||||
3/11/2019 | Mario Gonsalves | 32,000 | ||||||||||
3/11/2019 | Susan Edwards | 4,000 | ||||||||||
3/12/2019 | Alston Tetsuo Hayashida | Hanh Nguyen Hayashida | 400,000 |
35 |
3/12/2019 | Roberta Diane Lawson | 2,000 | ||||||||||
3/13/2019 | James David Maxwell II | 2,000 | ||||||||||
3/13/2019 | Lisa Marie Cornea | Richard Ryan Cornea | 4,000 | |||||||||
3/14/2019 | Kevin Louis Pichon | 10,000 | ||||||||||
3/17/2019 | David Wright | 4,000 | ||||||||||
3/18/2019 | Carol Ballentine Black | 3,000 | ||||||||||
3/18/2019 | Lisa Thomas Black Ulmer | 3,000 | ||||||||||
3/18/2019 | Maurice Mercer | 2,000 | ||||||||||
3/19/2019 | Charles M. Black | David S. Black | 4,000 | |||||||||
3/19/2019 | Javier Lopez | 20,000 | ||||||||||
3/19/2019 | Matthew Hissong | Brooke Hissong | 4,000 | |||||||||
3/19/2019 | Thomas Wells Black | 26,500 | ||||||||||
3/20/2019 | Brookie Rocha | 400 | ||||||||||
3/20/2019 | Claudia Barnes | 400 | ||||||||||
3/22/2019 | Harleigh-Anne Myricks | 4,000 | ||||||||||
3/22/2019 | Lawrence R. Brown | 2,000 | ||||||||||
3/22/2019 | Linda Garcia | 2,000 | ||||||||||
3/22/2019 | Mia McDaniel | 20,000 | ||||||||||
3/22/2019 | Michelle Berry | 4,000 | ||||||||||
3/22/2019 | Robert T. Wright | Shelli D. Wright | 6,000 | |||||||||
3/22/2019 | Teresa Ann Stecher | 20,000 | ||||||||||
3/22/2019 | Terry Brown | Monique Brown | 2,000 | |||||||||
3/22/2019 | Thera Huish | 4,000 | ||||||||||
3/23/2019 | Dwayne Landre Brown | Yvette Michelle Brown | 4,000 | |||||||||
3/23/2019 | Wendell Lister | 16,000 | ||||||||||
3/24/2019 | Jackie Kilby | 8,000 | ||||||||||
3/25/2019 | Anais Franco | 2,000 | ||||||||||
3/25/2019 | Darryl Eugene Murphy | 1,600 | ||||||||||
3/25/2019 | Edward McDaniel | 2,000 | ||||||||||
3/25/2019 | Hector Garcia | 2,000 | ||||||||||
3/25/2019 | James Yelton | 204,400 | ||||||||||
3/25/2019 | Karen June McCain | 4,000 | ||||||||||
3/25/2019 | Richard Mark Pratte | 2,000 | ||||||||||
3/25/2019 | Tamikah Marie Clark | 400 | ||||||||||
3/25/2019 | Tiffany Murphy | 400 |
36 |
3/26/2019 | Kevin Andre Goran | Rochelle Goran | 16,000 | |||||||||
3/26/2019 | Michael T Lascala | 4,000 | ||||||||||
3/26/2019 | Nick LaScala | 4,000 | ||||||||||
3/26/2019 | Sheila Gibbs | 4,000 | ||||||||||
3/27/2019 | Claire Traynham | 2,000 | ||||||||||
3/27/2019 | Connie Louise Tyler | Clande Dee Tyler | 16,000 | |||||||||
3/27/2019 | Daniel Dale Smith | Nancy Hardy Smith | 1,600 | |||||||||
3/27/2019 | Harvey Duane Hill | 20,000 | ||||||||||
3/27/2019 | Paramijt Singh | 5,000 | ||||||||||
3/27/2019 | Patricia Anne Labudzik | 800 | ||||||||||
3/27/2019 | Rodney Williams | 6,000 | ||||||||||
3/27/2019 | Sonsorey Yevett Corbin | 4,800 | ||||||||||
3/27/2019 | Tarek Graves | 2,200 | ||||||||||
3/27/2019 | Timothy Davis | 6,000 | ||||||||||
3/27/2019 | Vanessa Robinson Barden | 4,000 | ||||||||||
3/28/2019 | Angella Raisian | 10,000 | ||||||||||
3/29/2019 | Anthony Darryl Gilliam | Eunitha Nelson Gioffre | 6,000 | |||||||||
3/29/2019 | Brendan Nnamdi Oluoha | 2,400 | ||||||||||
3/29/2019 | Camille Dicarlo | Robert Dicarlo | 20,000 | |||||||||
3/29/2019 | Corrine Gibb | William Gibb | 8,000 | |||||||||
3/29/2019 | Dan E Underwood | 2,800 | ||||||||||
3/29/2019 | Daryl C. Mays | Chrystal Mays | 400 | |||||||||
3/29/2019 | Jean-Luc Laflin | 2,000 | ||||||||||
3/29/2019 | Jettie B Robinson | 16,000 | ||||||||||
3/29/2019 | Marla Satterfield | 2,200 | ||||||||||
3/29/2019 | OLT Aquisitions, LLC | 4,000 | ||||||||||
3/29/2019 | Raymond J. Swearingen | Clinton Carver Jr | 2,000 | |||||||||
3/29/2019 | Roberta Lunnis | 2,000 | ||||||||||
3/29/2019 | Romee Stephens | 40,000 | ||||||||||
3/29/2019 | Thomas Hedberg | 2,000 | ||||||||||
3/29/2019 | Tim McGovern | 2,000 | ||||||||||
3/30/2019 | Barbara A. Anderson | 600 | ||||||||||
3/30/2019 | Geraldine | 400 | ||||||||||
3/30/2019 | Glynnis Mason | 400 |
37 |
3/30/2019 | Jacqueline E. Kelly | 400 | ||||||||||
3/30/2019 | Jorge Amador | 400 | ||||||||||
3/30/2019 | Lauren Fox | 2,000 | ||||||||||
3/30/2019 | Philip Joseph Stewart | 8,000 | ||||||||||
3/31/2019 | Robert Kenneth Fisher | 2,000 | ||||||||||
3/31/2019 | Sherrief Battle | 10,000 | ||||||||||
3/31/2019 | Brenda Green | William Green | 16,000 | |||||||||
3/31/2019 | Chih Yu Yang | 2,000 | ||||||||||
3/31/2019 | Cierra Denise McNeely | 5,000 | ||||||||||
3/31/2019 | Danny Tran Ly | 2,000 | ||||||||||
3/31/2019 | Darrin beckett | 2,800 | ||||||||||
3/31/2019 | Derek T. Garrett | 400 | ||||||||||
3/31/2019 | Donte Hemmans | 2,400 | ||||||||||
3/31/2019 | Elizabeth Beatrice Estrada | 2,000 | ||||||||||
3/31/2019 | Francisco J. Alvarez JR. | 24,000 | ||||||||||
3/31/2019 | Jamie Gomez | Danielle Kehaulani | 1,600 | |||||||||
3/31/2019 | Kevin Emaile | Gisele Michelea Garrett | 2,000 | |||||||||
3/31/2019 | Kimberly LaShawn Pugh-Smith | 400 | ||||||||||
3/31/2019 | Krishna Zafar In care of Bansi Vora | 120,000 | ||||||||||
3/31/2019 | Mason Smith | 200 | ||||||||||
3/31/2019 | Miguel Ceja Martinez | 2,000 | ||||||||||
3/31/2019 | Mikkel Roy Johnson | 2,000 | ||||||||||
3/31/2019 | Milcah White | 200 | ||||||||||
3/31/2019 | Misty Skarb | 2,400 | ||||||||||
3/31/2019 | Okera D Robinson | 40,000 | ||||||||||
3/31/2019 | Pick Well LLC | 56,000 | ||||||||||
3/31/2019 | Randy Kutcher-Ortega | Susan Kutcher-Ortega | 800 | |||||||||
3/31/2019 | Roger Goodman | 30,000 | ||||||||||
3/31/2019 | Steven Bertone | 2,400 | ||||||||||
3/31/2019 | Susan Kutcher-Ortega | Cortez Ortega | 200 | |||||||||
3/31/2019 | Terrence Dixon | 800 | ||||||||||
3/31/2019 | Worrell Selvin | 6,400 |
38 |
4/8/2019 | Nikio Caffery | 400 | ||||||||||
4/22/2019 | Rodney Edwards | Cassandra Kendrick | 800 | |||||||||
4/26/2019 | Carl Millberg | 2,000 | ||||||||||
4/30/2019 | Joseph Ellis | 4,000 | ||||||||||
5/1/2019 | Barbara Flores-Sanders | Lorenzo Flores | 200 | |||||||||
5/1/2019 | Manny Vizcarra | 800 | ||||||||||
5/1/2019 | Manuel Vizcarra | 8,000 | ||||||||||
5/6/2019 | Carolyn Ann Gautier | 2,000 | ||||||||||
5/7/2019 | Ryan Robert Shaff | 2,800 | ||||||||||
5/15/2019 | Christopher Bryan | 200,000 | ||||||||||
5/15/2019 | Jeanne Zimmer | 4,000 | ||||||||||
5/15/2019 | Jerrod Washington | 200,000 | ||||||||||
5/16/2019 | Jay Arvind Dholakia | 8,000 | ||||||||||
5/16/2019 | Marvin McKinnon | 4,000 | ||||||||||
5/17/2019 | Leroy Betton Jr | Bobbie M. Betton | 2,400 | |||||||||
5/17/2019 | Michael A. Kelly | Patricia M. Kelly | 12,000 | |||||||||
5/17/2019 | Shivaputra Kulkarni | 14,400 | ||||||||||
5/17/2019 | Willette Mitchell | 800 | ||||||||||
5/17/2019 | Excelsior Management, LLC | 216,000 | ||||||||||
5/18/2019 | Hiroko Fukawa | 10,200 | ||||||||||
5/18/2019 | James Steven Crawshaw | Gwendolyn Louise Crawshaw | 20,000 | |||||||||
5/20/2019 | Benjamin T. Oh | 8,000 | ||||||||||
5/20/2019 | Kenneth T. Oh | 8,000 | ||||||||||
5/20/2019 | Kevin T. Oh | 8,000 | ||||||||||
5/20/2019 | Mark Forrest Galloway | Kimberly Denise Galloway | Aidan Joelle Galloway | 12,000 | ||||||||
5/20/2019 | Michelle Tibinsky | 4,000 | ||||||||||
5/20/2019 | Pamela Hawkins | Richard Bruce Klock | 8,000 | |||||||||
5/21/2019 | Andrew Ayers | 16,000 | ||||||||||
5/21/2019 | Avani Vaidya | 4,000 | ||||||||||
5/21/2019 | Debra Ingebrigtsen | 8,000 | ||||||||||
5/21/2019 | Kaushik Patel | 4,000 | ||||||||||
5/22/2019 | Caleb Beyah | 8,080 | ||||||||||
5/22/2019 | Pearl Dynasty LLC. | 2,400 |
39 |
5/23/2019 | Gourav Bhateja | 2,000 | ||||||||||
5/23/2019 | Jasmin Millberg | 4,000 | ||||||||||
5/24/2019 | Maria E Guerra | 2,000 | ||||||||||
5/24/2019 | Scottie Williams | 800 | ||||||||||
5/25/2019 | Anthony Moore | Melanie Lamar Vaughn | 2,000 | |||||||||
5/25/2019 | La Taunya Green | Gregory LeDuff Jr. | 4,000 | |||||||||
6/2/2019 | Anthony Sumbry | Judith Sumbry | 4,000 | |||||||||
6/3/2019 | Casey Jason Chapman | 8,000 | ||||||||||
6/3/2019 | Dennis Todd Kreinbrink | 20,000 | ||||||||||
6/5/2019 | John Francis Kalakoa Lum | 8,000 | ||||||||||
6/6/2019 | Hope Flores | Marco Flores | 8,000 | |||||||||
6/6/2019 | Robert Noy | 12,000 | ||||||||||
6/7/2019 | Jeffrey Stephen Fryer | 4,000 | ||||||||||
6/7/2019 | Raymond Jack Whiteley | 8,000 | ||||||||||
6/17/2019 | Billy Garrett | 2,000 | ||||||||||
6/17/2019 | Inson E. Oh | 80,000 | ||||||||||
6/18/2019 | Eugene Talcott | 4,000 | ||||||||||
6/19/2019 | George Isaac Bates | 7,600 | ||||||||||
6/21/2019 | Leslie Denise Schlender | 2,000 | ||||||||||
6/27/2019 | Allison Rae Shaff | Mason Randall Shaff | 4,000 | |||||||||
6/27/2019 | Michael J McGahan | 2,000 | ||||||||||
6/27/2019 | Wende Lynne Eddington | Orsino Boyd Eddington | 40,000 | |||||||||
6/30/2019 | Marcus Bonner | 20,000 | ||||||||||
7/1/2019 | Jayeshkumar C. Vaidya | 800 | ||||||||||
7/3/2019 | Annie Russell | 4,000 | ||||||||||
7/4/2019 | Walter Jeff Stiles | Thomas Marshall | 5,600 | |||||||||
7/6/2019 | William Garner | 32,000 | ||||||||||
7/12/2019 | Christopher Conan Haggins | 4,000 | ||||||||||
7/16/2019 | Dana Crisp | 2,000 | ||||||||||
7/16/2019 | Kiva Dale | 8,000 | ||||||||||
7/22/2019 | Anthony M. Carter | 8,000 | ||||||||||
7/23/2019 | Dana A. Gezik | John G. Gezik | 8,000 | |||||||||
7/26/2019 | Jacqueline V. Venters | 4,000 | ||||||||||
7/26/2019 | Kengatta Lakema Callen | 40,000 | ||||||||||
7/31/2019 | Carol Williams | 800 |
40 |
7/31/2019 | John Joseph Greci | Karla Renee Greci | 1,600 | |||||||||
8/2/2019 | Brenda Green | 3,200 | ||||||||||
8/2/2019 | Cornell Wilkins | 800 | ||||||||||
8/2/2019 | Darlene Richard | 800 | ||||||||||
8/2/2019 | Debra Linda Tang | 2,000 | ||||||||||
8/2/2019 | Dwayne Kevin Conard | 8,080 | ||||||||||
8/2/2019 | Edwina Chism | 800 | ||||||||||
8/2/2019 | Gilbert Tobon | Betsy Tobon | 2,400 | |||||||||
8/2/2019 | Jeanann Jammo | 800 | ||||||||||
8/2/2019 | John Robert Shaff | Lisa Diane Shaff | 800 | |||||||||
8/2/2019 | Rafael Lemus-Rangel | 28,000 | ||||||||||
8/2/2019 | Manuel Cahero | Jocelynn Galvan | 4,000 | |||||||||
8/2/2019 | Mary Rios | 800 | ||||||||||
8/2/2019 | Romona Louise Berry | 1,600 | ||||||||||
8/5/2019 | Christopher Dinriquez | 20,000 | ||||||||||
8/5/2019 | Kevin Vanklaveren | 800 | ||||||||||
8/5/2019 | Leslie Paul Cline | 4,000 | ||||||||||
8/5/2019 | Michael Rizzo | 1,600 | ||||||||||
8/5/2019 | Rajesh Vekata Atyam | 4,000 | ||||||||||
8/5/2019 | Wynton Foster | 40,000 | ||||||||||
8/6/2019 | Ashley Britine Ripperger | 1,200 | ||||||||||
8/6/2019 | Josef Malcolm Robinson | 800 | ||||||||||
8/6/2019 | Karla Goldman | 800 | ||||||||||
8/6/2019 | Robert E. L. Correa | 1,000 | ||||||||||
8/6/2019 | Robin Anne Correa | 1,000 | ||||||||||
8/6/2019 | Stacy L. Beugen | 4,000 | ||||||||||
8/6/2019 | Warren Moore | 1,600 | ||||||||||
8/7/2019 | Charlean M. Jones | 800 | ||||||||||
8/9/2019 | Patricia Gentry Edington | 800 | ||||||||||
8/12/2019 | Benjamin David Howard | 1,600 | ||||||||||
8/12/2019 | Lynn Cavé | Jeffrey Cavé | 4,000 | |||||||||
8/12/2019 | Michelle Patricia King | Stacey Deon Jones | 800 | |||||||||
8/12/2019 | Pat Edington | 800 | ||||||||||
8/13/2019 | Allison Warren | 800 | ||||||||||
8/13/2019 | Danelle L. Rich | 4,000 |
41 |
8/13/2019 | Gary L. Thomas | 3,536 | ||||||||||
8/13/2019 | Mark Keane | 24,000 | ||||||||||
8/14/2019 | Tambra Hodges | 5,600 | ||||||||||
8/15/2019 | April Weeden White | 2,400 | ||||||||||
8/15/2019 | Cristian's Big Heart Foundation | 800 | ||||||||||
8/15/2019 | Darryl Williams | 6,400 | ||||||||||
8/15/2019 | Emanuel Deleon Hopkins | 1,000 | ||||||||||
8/15/2019 | Jacqueline Catchings | 800 | ||||||||||
8/15/2019 | Jordan Munford | 1,000 | ||||||||||
8/15/2019 | Mavis Windom | 800 | ||||||||||
8/15/2019 | Terran L Zinsmeister Jr. | 3,200 | ||||||||||
8/16/2019 | Glenda Rowe | 800 | ||||||||||
8/20/2019 | Abel A. Avila | 2,880 | ||||||||||
8/20/2019 | Kim Robert Layaban Mercado | 4,800 | ||||||||||
8/20/2019 | Mark Anthony Miller | Shameka Denee Miller | 4,000 | |||||||||
8/20/2019 | Robert J. Shannon | 2,000 | ||||||||||
8/20/2019 | Zilka Guerra | 2,400 | ||||||||||
8/21/2019 | Brett Epstein | 880 | ||||||||||
8/21/2019 | J.Christopher Roche | 10,400 | ||||||||||
8/21/2019 | Victoria Daley | 8,000 | ||||||||||
8/22/2019 | Duana Garrett | 4,000 | ||||||||||
8/25/2019 | Aaron Cadena | 8,000 | ||||||||||
8/25/2019 | K & L Toney Corporation | 1,600 | ||||||||||
8/25/2019 | Ra’Miia Morris | 800 | ||||||||||
8/26/2019 | Angela Moore | Annton Berry Jr. | 1,000 | |||||||||
8/26/2019 | Willie Carl Jenkins Jr. | Cherie Lavone Payne | 800 | |||||||||
8/26/2019 | Jamea Hill | 800 | ||||||||||
8/26/2019 | Rhonda Ridgeway | 800 | ||||||||||
8/26/2019 | Tracy Aguirre | 1,600 | ||||||||||
8/27/2019 | Debra Brown | 4,000 | ||||||||||
8/27/2019 | Herbert Hale | 1,200 | ||||||||||
8/28/2019 | Adam Troy Idlebird | 800 | ||||||||||
8/28/2019 | Anjury Heidi Perkins-Gallardo | 800 | ||||||||||
8/28/2019 | Donna Marshall | 4,000 | ||||||||||
8/28/2019 | Frank R. Crosby III | 800 |
42 |
8/28/2019 | Ivy Brittany Thompson | Mycol Akhile | 800 | |||||||||
8/28/2019 | Jaccob R. Castillo | 800 | ||||||||||
8/28/2019 | KeJonnai Lanique Kidd | 800 | ||||||||||
8/28/2019 | KeMarshay Lakeya Kidd | 800 | ||||||||||
8/28/2019 | Marvin Lee Kidd | Sherice L. Kidd | 6,400 | |||||||||
8/28/2019 | Mayra Alejandra Salcido | 800 | ||||||||||
8/28/2019 | Michelle Denise Kelly | Charlette Yvonne Kelly | 800 | |||||||||
8/28/2019 | Ryan Parker | 800 | ||||||||||
8/28/2019 | Tracie Kyle Hunter | 800 | ||||||||||
8/28/2019 | Tymeshia Randolph | 800 | ||||||||||
8/29/2019 | Givenchy Diere Martin | 800 | ||||||||||
8/29/2019 | Hodari Sababu | 800 | ||||||||||
8/29/2019 | Jose Salgado | 5,600 | ||||||||||
8/29/2019 | Robert Lee Shurelds Jr. | 10,800 | ||||||||||
8/30/2019 | Michole McBroom | 40,000 | ||||||||||
9/3/2019 | Jacqueline Celestine | 800 | ||||||||||
9/3/2019 | John T. Smith | 800 | ||||||||||
9/3/2019 | Justin Gripper | 800 | ||||||||||
9/3/2019 | Kevin Epps | Crystal Calhoun-Epps | 2,400 | |||||||||
9/3/2019 | Kimberly Ladawn Avery | 800 | ||||||||||
9/3/2019 | La Shawn Camille Shelton | 800 | ||||||||||
9/3/2019 | Miguel Angel Rivera | 4,000 | ||||||||||
9/3/2019 | Pharoah LeShiek Bacon | 800 | ||||||||||
9/3/2019 | Steven D Patterson | 800 | ||||||||||
9/3/2019 | Allea Adams | 1,600 | ||||||||||
9/3/2019 | Ebony Elizabeth Norville | 2,400 | ||||||||||
9/4/2019 | Sky Imperium Development LLC | 150,000 | ||||||||||
9/4/2019 | Translight, LLC | 150,000 | ||||||||||
9/5/2019 | Kenyah Duncan | 800 | ||||||||||
9/5/2019 | Michael Gioffre | 8,000 | ||||||||||
9/5/2019 | Shane Delaney | Charlene Mackabee | 800 | |||||||||
9/6/2019 | Alex K’yon Bullock | 960 |
43 |
9/6/2019 | Allea Adams Guardian for Kai Justice Lee | 800 | ||||||||||
9/6/2019 | Anthony Eldridge Williams | 800 | ||||||||||
9/6/2019 | Daren Arthur Duvernay | 800 | ||||||||||
9/6/2019 | Eric Lamont Finley | Laura Elizabeth Williams | 960 | |||||||||
9/6/2019 | Jack Bruce Piatetsky | 4,000 | ||||||||||
9/6/2019 | Michael Moppin | 800 | ||||||||||
9/6/2019 | Renee Corley Hill | 800 | ||||||||||
9/10/2019 | Heather B. Henry | 800 | ||||||||||
9/10/2019 | Hitesh Hotlani | 4,000 | ||||||||||
9/10/2019 | Tracy L. West | 800 | ||||||||||
9/11/2019 | Kushal Shirishkumar Chokshi | 2,000 | ||||||||||
9/11/2019 | Punit P. Chokshi | 2,000 | ||||||||||
9/11/2019 | Thomas Ryan Wakefield | 200,000 | ||||||||||
9/12/2019 | Chesnie Guerra | 800 | ||||||||||
9/12/2019 | Daniel C. McDaniel | 800 | ||||||||||
9/12/2019 | Daren Ramon James | 800 | ||||||||||
9/12/2019 | Henry Guerra | 800 | ||||||||||
9/12/2019 | James Pendergrass | 2,000 | ||||||||||
9/12/2019 | Jorge Mauricio Guerra Guardian for Jazlyn Isabella Guerra | 800 | ||||||||||
9/12/2019 | Jorge Mauricio Jr. Guerra | 800 | ||||||||||
9/12/2019 | Jose Mejia | 800 | ||||||||||
9/12/2019 | Justine Amber Maldonado | 800 | ||||||||||
9/12/2019 | Tracy Monterroso | 800 | ||||||||||
9/14/2019 | Rene Morris | 1,600 | ||||||||||
9/16/2019 | Kelly Redmond | Michael Redmond | 64,000 | |||||||||
9/17/2019 | Jose Alberto Cortez Sr. | 4,000 | ||||||||||
9/20/2019 | Joyce Qi | 3,200 | ||||||||||
9/20/2019 | LaTresa Michele Harris | 800 | ||||||||||
9/29/2019 | Jorge Mauricio Guerra | 16,000 | ||||||||||
10/2/2019 | Esmeralda Hernandez | 800 | ||||||||||
10/2/2019 | Jason Lawrence | Carolyn Sue Tull | Clint Ryan Tull | 40,000 |
44 |
10/2/2019 | Stacha McCall | 800 | ||||||||||
10/2/2019 | Teira Bausley | 800 | ||||||||||
10/3/2019 | Brandon Wilkerson | 8,000 | ||||||||||
10/3/2019 | Jacob A Avigdor | 15,000 | ||||||||||
10/4/2019 | Vanessa Rodriguez | 40,000 | ||||||||||
10/6/2019 | Matthew Tenczar | 32,000 | ||||||||||
10/6/2019 | Alisha Morcate | 16,000 | ||||||||||
10/6/2019 | Timothy Miller | 24,000 | ||||||||||
10/6/2019 | Bertie Plante | 4,000 | ||||||||||
10/6/2019 | Michael Fenimore | 4,000 | ||||||||||
10/6/2019 | Debbie DiBenedetto | 6,400 | ||||||||||
10/6/2019 | Gene Tenczar | 12,000 | ||||||||||
10/6/2019 | Crista Jacomini | Mike Jacomini | 24,000 | |||||||||
10/6/2019 | Richard Figueroa | 16,000 | ||||||||||
10/6/2019 | Denae DiBenedetto | 4,000 | ||||||||||
10/6/2019 | Steven White | 20,000 | ||||||||||
10/6/2019 | Larry Jacomini | 20,000 | ||||||||||
10/7/2019 | Kendall Korrinne Hamilton | 4,000 | ||||||||||
10/7/2019 | Laron Ragland | 800 | ||||||||||
10/7/2019 | Myrna Rich-Ray | 43,200 | ||||||||||
10/7/2019 | Rebecca Fairfax | 800 | ||||||||||
10/8/2019 | Kenneth Stanley Aguirre | 4,000 | ||||||||||
10/8/2019 | Michael Dean Elrod | 4,000 | ||||||||||
10/9/2019 | Jerry Wayne Clark | Claudia Louise Clark | Judy Marie Clark | 2,000 | ||||||||
10/9/2019 | John White | 3,200 | ||||||||||
10/9/2019 | Shelby Nicole Thomas | 1,200 | ||||||||||
10/10/2019 | Demy S West | Michael West | 800 | |||||||||
10/10/2019 | Heather J Clark | Aaron P Clark | 800 | |||||||||
10/10/2019 | Karolyn Plummer | 800 | ||||||||||
10/10/2019 | Kendall Appelp | 24,000 | ||||||||||
10/10/2019 | Nicholas M Howell | 800 |
45 |
10/10/2019 | Nicole Grey | 800 | ||||||||||
10/10/2019 | Nikkisha Renee Robbins | Rosalind Jeanette Mitchell | 800 | |||||||||
10/10/2019 | Tony Howell | Pamela J. Howell | 8,000 | |||||||||
10/10/2019 | Craig Studenka | 40,000 | ||||||||||
10/10/2019 | Patrick Dennis | 800 | ||||||||||
10/11/2019 | Damian Torres | 1,600 | ||||||||||
10/11/2019 | Troy Williams | 1,600 | ||||||||||
10/14/2019 | Lillie S. Frierson | 800 | ||||||||||
10/14/2019 | Royalton Lynch | Tamara Gordo | 800 | |||||||||
10/17/2019 | Kimberly Dawson | 800 | ||||||||||
10/18/2019 | Marva Lindsey | Douglas Lindsey | 1,600 | |||||||||
10/21/2019 | Falesha Skiffer-Brown | 1,600 | ||||||||||
10/28/2019 | T E Millwood | 800 | ||||||||||
10/28/2019 | Emma Lee Thomas-Williams | 1,600 | ||||||||||
10/31/2019 | Charles A Friesen | Renee E Davis-Friesen | 800 | |||||||||
9/3/2019 | Steven D Patterson | 800 | ||||||||||
9/9/2019 | John Harris | 4,000 | ||||||||||
9/9/2019 | Tanya Andrus | 960 | ||||||||||
11/5/2019 | Kelly Suzanne Bielat | 3,200 | ||||||||||
8/9/2019 | Matthew Gezik | 800 | ||||||||||
11/11/2019 | Amrita Divine Grace | 800 | ||||||||||
11/11/2019 | Diane Jones | 800 | ||||||||||
11/7/2019 | Rene Patino | 4,000 | ||||||||||
11/13/2019 | Theodore Metzgar | Susan Metzgar | 1,600 | |||||||||
11/10/2019 | Erick Aubry | 8,000 | ||||||||||
11/8/2019 | Sheila Thomas | 6,000 | ||||||||||
11/13/2019 | Ebony Jefferson | 800 | ||||||||||
11/13/2019 | Marques Jefferson | 800 | ||||||||||
11/13/2019 | Jason Jefferson | 800 | ||||||||||
11/13/2019 | Edward Jerfferson Jr. | 800 |
46 |
11/13/2019 | Tammy Reyes | 800 | ||||||||||
11/11/2019 | Joshua Dollar | 1,600 | ||||||||||
11/15/2019 | Linda Darnell Rhodes | 800 | ||||||||||
11/13/2019 | Nevin Randal Newell | 40,000 | ||||||||||
11/14/2019 | Toni M. Aubry | 9,600 | ||||||||||
11/15/2019 | Robert J. Barron | Diane M. Barron | 400 | |||||||||
8/25/2019 | Dawn Willis | Camille Willis | 800 | |||||||||
11/24/2019 | Andrew Trabold | Matthew Albert Trabold | Cynthia Colton | Joseph Trabold | 40,000 | |||||||
11/25/2019 | Craig Michael Beswick | Monica Beswick | 1,200 | |||||||||
11/29/2019 | Erika De Jesus | 1,600 | ||||||||||
11/18/2019 | NuView Trust Co. Custodian FBO Jeff Hayworth IRA | 40,000 | ||||||||||
11/29/2019 | Ralph Galvan | 1,600 | ||||||||||
11/29/2019 | Kendra Settle | 800 | ||||||||||
11/26/2019 | Sharon Deneen Rannels | 800 | ||||||||||
11/26/2019 | Tamia Smith | 2,000 | ||||||||||
12/5/2019 | Michael Gravance | 6,400 | ||||||||||
9/26/2019 | Innovative Creative Entertainment | 140,000 | ||||||||||
1/22/2019 | Robert Elliott | 1,600 | ||||||||||
12/10/2019 | Lisa M. Lujano | 4,000 | ||||||||||
12/11/2019 | Blue Odyssey Management, LLC. | 800 | ||||||||||
12/6/2019 | Lori G Bauer | 2,000 | ||||||||||
12/15/2019 | Zachary Pearce Yarmolovich | 48,000 | ||||||||||
12/15/2019 | Howard E. Galvin | 400 | ||||||||||
12/15/2019 | Barbara J. Belcher | 8,000 | ||||||||||
12/18/2019 | Jeremiah Staggs | 800 | ||||||||||
12/18/2019 | Kennneth M. Kakasuleff | 2,000 | ||||||||||
11/29/2019 | Regina Vanessa Moore | 1,600 |
47 |
12/19/2019 | Patrick Daunyel Foreman | 4,000 | ||||||||||
12/20/2019 | Levonzell Hill | 960 | ||||||||||
12/20/2019 | Lorenzo Ramos | 1,600 | ||||||||||
12/11/2019 | Shormesia Millington | 2,400 | ||||||||||
12/22/2019 | Karissa Valencia | 2,400 | ||||||||||
12/15/2019 | Cash Theodore Oliver | Jonahira Evangelina Cordero | 800 | |||||||||
12/19/2019 | Robert Lee McAdoo Jr. | 800 | ||||||||||
12/21/2019 | Eric Joseph Aubry Jr. | Carrie Michelle Aubry | 4,000 | |||||||||
12/23/2019 | Jason Daniel Ogg | 800 | ||||||||||
12/23/2019 | Celeste Coleman ll | 800 | ||||||||||
12/23/2019 | Shannon Kay Smith | 8,000 | ||||||||||
12/23/2019 | Leon Smith | 4,000 | ||||||||||
12/23/2019 | Qiana Byrd | 4,000 | ||||||||||
12/23/2019 | Celeste Renee Ariche | 800 | ||||||||||
12/23/2019 | Dascha Yolanda Edmond Brooks | 1,200 | ||||||||||
12/23/2019 | Sherri Lee Slack | Philip Alan Slack | 40,000 | |||||||||
3/27/2019 | Dylan Rucker | 13,811 | ||||||||||
12/23/2019 | Justin Smerber | 4,000 | ||||||||||
12/23/2019 | Erica Monique Owens | 800 | ||||||||||
12/23/2019 | Mary E. Martin | 4,000 | ||||||||||
12/23/2019 | Susan L. Carter | 4,000 | ||||||||||
12/23/2019 | Megan E. Carter | 800 | ||||||||||
12/23/2019 | Malcolm N. Fisher | 800 | ||||||||||
12/23/2019 | Kathleen Thomas | 800 | ||||||||||
12/23/2019 | Nikki Alyssa Kowalczyk | 4,000 | ||||||||||
12/23/2019 | Rhonda K Hudson | 800 | ||||||||||
12/24/2019 | Stephanie S Davis | 4,000 | ||||||||||
12/24/2019 | Rena DelHomme | Tiffany Murphy | 200 | |||||||||
12/24/2019 | Rena DelHomme | Sonsorey Corbin | 400 |
48 |
12/24/2019 | Rena DelHomme | Jon A’Lida Aubry | 200 | |||||||||
12/24/2019 | Rena DelHomme | Nicolas DelHomme. | 200 | |||||||||
12/24/2019 | Rena DelHomme | Matthew DelHomme | 200 | |||||||||
12/16/2019 | Jim Krzysik | Terrie Krzysik | 800 | |||||||||
12/23/2019 | Vivian Marie Morado | 400 | ||||||||||
12/23/2019 | Franz Cabrini Aubry | 2,000 | ||||||||||
12/23/2019 | Lorraine Kristen Marie Coleman | Valerie Jean Coleman | 800 | |||||||||
12/20/2019 | Jeanann Jammo | 800 | ||||||||||
12/23/2019 | Vanessa Mechelle Morado | 400 | ||||||||||
12/23/2019 | Unknown name | 400 | ||||||||||
12/26/2019 | Monique Nicole Brown | 800 | ||||||||||
Total | 6,835,967 |
(1) | The number of shares listed in these columns include all shares beneficially owned by the selling stockholder. |
All Selling shareholder purchased their shares pursuant to Regulation D and had all pertinent information about the Company at the time of sale. No general solicitation was utilized, and no commissions paid. All sales were undertaken by the officers and directors of the issuer.
49 |
By Selling Stockholders
The selling stockholders and any of its pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of its shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in any private transaction. The sales will be at the fixed price of $15.00. The selling stockholder may use any one or more of the following methods when selling shares:
· | ordinary brokerage transactions and transactions in which the broker-dealer solicits investors; |
· | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
· | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
· | an exchange distribution in accordance with the rules of the applicable exchange; |
· | privately negotiated transactions; |
· | to cover short sales made after the date that this Registration Statement is declared effective by the Commission; |
· | broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; |
· | a combination of any such methods of sale; and |
· | any other method permitted pursuant to applicable law. |
The selling stockholder may also sell shares under Rule 144 promulgated under the Securities Act, or another exemption from the registration requirements under the Securities Act, if available, rather than under this prospectus. Rule 144 is not available for the resale of securities issued by a shell company until 12 months after it has ceased being a shell company and has filed current Form 10 information with the Commission reflecting its status as an entity that is no longer a shell company.
The issuer and the selling shareholders will sell the common stock being registered in this offering at a fixed price of $15.00 per share. The Company’s shares may never be quoted on the NASDAQ Capital Markets or listed on an exchange.
The selling stockholders may from time to time pledge or grant a security interest in some or all of the Shares owned by it and, if it defaults in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker -dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a selling stockholder that a donee or pledgee intends to sell more than 500 shares of common stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.
The selling stockholder also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
50 |
The selling stockholders and any broker-dealers or agents that are involved in selling the shares are “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Because the selling stockholders are an underwriter within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of Securities will be paid by the selling stockholder and/or the purchasers. The selling stockholder has represented and warranted to the company that it acquired the securities subject to this registration statement in the ordinary course of the selling stockholder’s business and, at the time of its purchase of such securities the selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.
The Company has advised the selling stockholders that it may not use shares registered on this Registration Statement to cover short sales of common stock made prior to the date on which this Registration Statement shall have been declared effective by the Commission. If the selling stockholder uses this prospectus for any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The selling stockholder will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling stockholder in connection with re-sales of their respective shares under this Registration Statement.
The Company is required to pay all fees and expenses incident to the registration of the shares, but the Company will not receive any proceeds from the sale of the common stock by selling stockholders. The Company has agreed to indemnify the selling stockholder against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
By Our Company
Offering will be sold by Our Officers and Directors
This is a self-underwritten offering. This Prospectus is part of a Prospectus that permits our officers and directors to sell the Shares directly to the public, with no commission or other remuneration payable to him for any Shares they sell. There are no plans or arrangements to enter into any contracts or agreements to sell the Shares with a broker or dealer. After the effective date of this prospectus, the officers and directors, intend to advertise through personal contacts, telephone, and hold investment meetings. We do not intend to use any mass-advertising methods such as the Internet or print media. Our officers and directors will also distribute the prospectus to potential investors at meetings, to their business associates and to their friends and relatives who are interested in the Company as a possible investment. In offering the securities on our behalf, our officers and directors will rely on the safe harbor from broker dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934.
Our officers and directors will not register as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth the conditions under which a person associated with an Issuer, may participate in the offering of the Issuer's securities and not be deemed to be a broker-dealer.
a. None of our officers and directors are subject to a statutory disqualification, as that term is defined in Section 3(a)(39)of the Act, at the time of their participation;
b. None of our officers and directors will be compensated in connection with their participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;
c. None of our officers and directors are, nor will he be at the time of his participation in the offering, an associated person of a broker-dealer; and,
51 |
d. All of our officers and directors meet the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that they (A) primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of our company, other than in connection with transactions in securities; and (B) are not a broker or dealer, or been associated person of a broker or dealer, within the preceding twelve months; and (C) have not participated in selling and offering securities for any Issuer more than once every twelve months other than in reliance on Paragraphs (a)(4)(i) (a) (4) (iii).
Our officers, directors, control persons and affiliates of same will not purchase any shares in this offering.
Terms of the Offering
The Company is offering a minimum of 100,000 and a maximum of 10,000,000 common shares at a fixed price of $15.00 per share. The price of $15.00 per share is fixed for the duration of the offering. This is the initial offering of Common Stock of the Company and no public market exists for the securities being offered. The shares are intended to be sold directly through the efforts of our officers and directors. No commission or other compensation related to the sale of the shares will be paid to our officers and directors. Our officers and directors intend to place the offering through personal contacts, telephone, and hold investment meetings. We do not intend to use any mass-advertising methods such as the Internet or print media. Our officers and directors will also distribute the prospectus to potential investors at meetings, to his business associates and to his friends and relatives who are interested in the Company as a possible investment. The shares are being offered for a period not to exceed 180 days. If the minimum amount is not achieved within 180 days of the date of this prospectus, all subscription funds from the will be returned to investors promptly without interest or deduction of fees. The offering will terminate when the sale of all 10,000,000 shares is completed, when the board determines it is in the best interest of the Company to close the offering at any time after the minimum is reached or at the end of the 180-day offering period.
The subscription proceeds from the sale of the shares in this offering will be payable to SHE Beverage Company, Inc. and will be deposited in a separate (limited to funds received from this offering on behalf of the Company) non-interest-bearing bank account until the minimum amount of proceeds are raised. No interest will be available for payment to either the Company or the investors (since the funds are being held in a non-interest-bearing account).
The officers and directors of the issuer and any affiliated parties thereof will not participate in this offering.
There can be no assurance that all, or any, of the shares will be sold. As of the date of this Prospectus, the Company has not entered into any agreements or arrangements for the sale of the shares with any broker/dealer or sales agent. However, if the Company were to enter into such arrangements, the Company will file a post-effective amendment to disclose those arrangements because any broker/dealer participating in the offering would be acting as an underwriter and would have to be so named in the Prospectus.
Deposit of Offering Proceeds
The subscription proceeds from the sale of the shares in this offering will be payable to SHE Beverage Company, Inc. and will be deposited in a separate (limited to funds received from this offering on behalf of the Company) non-interest-bearing bank account until the minimum amount of proceeds are raised. No interest will be available for payment to either the Company or the investors (since the funds are being held in a non-interest-bearing account).
Procedures and Requirements for Subscription
Prior to the effectiveness of the Registration Statement, the Issuer has not provided potential purchasers of the securities being registered herein with a copy of this prospectus. Investors can purchase common stock in this offering by completing a Subscription Agreement (attached hereto as Exhibit 99.1 and sending it together with payment in full to the Company.
All payments are required in the form of United States currency either by personal check, bank draft, bank wire, or by cashier’s check. There is a minimum of 4,000 shares required to be purchased by any individual investor. The Company reserves the right to either accept or reject any subscription. Any subscription rejected will be returned to the subscriber within five business days of the rejection date. Furthermore, once a subscription agreement is accepted, it will be executed without reconfirmation to or from the subscriber. Once the Company accepts a subscription, the subscriber cannot withdraw it.
52 |
How to Invest:
Subscriptions for purchase of shares offered by this prospectus can be made by completing, signing and delivering to us, the following:
1) an executed copy of the Subscription Agreement, available from the Company; and
2) a check payable to the order of SHE Beverage Company, Inc. in the amount of $15.00 for each share you want to purchase.
NASDAQ Markets Considerations
We intend to apply to have our stock traded on the NASDAQ Capital Markets. The Company’s shares may never be quoted or listed on an exchange. The NASDAQ Capital Markets is separate and distinct from the NASDAQ stock market and other stock exchanges. NASDAQ has no business relationship with issuers of securities quoted on the NASDAQ Capital Markets. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the NASDAQ Capital Markets.
53 |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
CRS provides that directors and officers of California corporations may, under certain circumstances, be indemnified against expenses (including attorneys‘ fees) and other liabilities actually and reasonably incurred by them as a result of any suit brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. CRS also provides that directors and officers may also be indemnified against expenses (including attorney’s fees) incurred by them in connection with a derivative suit if they acted in good faith and in such a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a directors, officers or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The validity of the shares offered hereby has been passed upon for us by Elaine A. Dowling, Esq. of EAD Law Group, LLC 8275 S. Eastern Ave. Suite 200, Las Vegas, NV 89123. Email: ead@eadlawgroup.com.
The consolidated financial statements included in this prospectus for the years ended December 31, 2018 and 2017 have been audited by Pinnacle Accountancy Group of Utah (a DBA of Heaton & Co., PLLC), an independent registered public accounting firm, to the extent and for the periods set forth in their report appearing elsewhere herein and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No experts or counsel to the company have any shares or other interests in SHE Beverage Company, Inc.
LEGAL PROCEEDINGS
The Company is currently involved in the following legal proceedings:
She Beverage Company, Inc. v. Farmer: SHE filed this lawsuit after learning that the defendants had been selling, SHE Beverage Company common shares outside of the Company’s authority. At SHE’s request, on August 19, 2019, the Court issued a Temporary Restraining Order (“TRO”) against all the defendants. On October 8, 2019, the Court extended the TRO by issuing a Preliminary Injunction.
Munoz vs. She Beverage Company, Inc.: Munoz is requesting a refund of the original investment as a result of a contractual breach of implied good faith and fair dealings. The Company agreed to buy back Munoz’s original investment, which was rejected by Munoz who decided to pursue legal action to try and obtain a judgment that, in our opinion, does not reflect the original investment amount.
Babbidge v. She Beverage Company, Inc.: Babbidge petitioned for writ of mandate requesting inspection of the Company’s financial records.
The Company intends to defend all three proceedings and has the belief the claims are without merit and that the Company will prevail in all matters.
54 |
Once this registration statement is declared effective, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549 and at the SEC’s regional offices located at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 233 Broadway, New York, New York 10279. You can obtain copies of these materials from the Public Reference Section of the SEC upon payment of fees prescribed by the SEC. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC’s Web site contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of that site is http://www.sec.gov.
We have filed this Registration Statement on Form S-1 with the SEC under the Securities Act of 1933, with respect to the securities offered in this prospectus. This prospectus, which is filed as part of this Registration Statement, does not contain all of the information set forth in the Registration Statement, some portions of which have been omitted in accordance with the SEC’s rules and regulations. Statements made in this prospectus as to the contents of any contract, agreement or other document referred to in this prospectus are not necessarily complete and are qualified in their entirety by reference to each such contract, agreement or other document which is filed as an exhibit to the Registration Statement. The Registration Statement may be inspected without charge at the public reference facilities maintained by the SEC, and copies of such materials can be obtained from the Public Reference Section of the SEC at prescribed rates.
55 |
SHE BEVERAGE COMPANY, INC.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018 and 2017
56 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Stockholders of
She Beverage Company, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of She Beverage Company, Inc. (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/Pinnacle Accountancy Group of Utah
(a DBA of Heaton & Co., PLLC)
We have served as the Company’s auditors since 2019
Farmington, Utah
January 10, 2020
F-1 |
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2018 AND 2017
December 31, | December 31, | |||||||
2018 | 2017 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 334,218 | $ | 246 | ||||
Accounts receivable | - | 372 | ||||||
Advances, related party | 25,000 | - | ||||||
Inventory | 122,354 | 41,478 | ||||||
Prepaid expenses | 32,025 | 1,651 | ||||||
Total current assets | 513,597 | 43,747 | ||||||
Property, plant, and equipment, net | 2,237,503 | 535,418 | ||||||
Purchased intangible assets and goodwill, net | 4,383,658 | 1,373,788 | ||||||
Deposits | 82,103 | 10,617 | ||||||
TOTAL ASSETS | $ | 7,216,861 | $ | 1,963,570 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 33,272 | $ | 18,875 | ||||
Accrued liabilities | - | 15,090 | ||||||
Line of credit | - | 14,881 | ||||||
Capital lease, current | 11,738 | 10,513 | ||||||
Total current liabilities | 45,010 | 59,359 | ||||||
Capital lease, less current portion | 35,693 | 47,431 | ||||||
TOTAL LIABILITIES | 80,703 | 106,790 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Series A preferred Stock, $0.001 par value, 20,000,000 shares authorized, 20,000,000 shares issued and outstanding | 20,000 | 20,000 | ||||||
Series B Preferred Stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding | - | - | ||||||
Common stock, $0.001 par value, 400,000,000 shares authorized, 14,442,932 and 3,617,466 shares issued and outstanding at December 31, 2018 and 2017, respectively | 14,442 | 3,617 | ||||||
Additional paid-in capital | 21,122,833 | 6,415,175 | ||||||
Accumulated deficit | (14,021,117 | ) | (4,582,012 | ) | ||||
Total stockholders’ equity | 7,136,158 | 1,856,780 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 7,216,861 | $ | 1,963,570 |
The accompanying notes are an integral part of these consolidated financial statements.
F-2 |
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
For the year ended December 31, 2018 | For the Year ended December 31, 2017 | |||||||
REVENUE: | ||||||||
Event revenue | $ | 1,618,875 | $ | 1,569,690 | ||||
Merchandise revenue | 110,324 | 152,670 | ||||||
Total revenue | 1,729,199 | 1,722,360 | ||||||
COST OF SALES: | ||||||||
Event cost of sales | 793,619 | 767,586 | ||||||
Merchandise cost of sales | 18,402 | 8,628 | ||||||
Total cost of sales | 812,021 | 776,214 | ||||||
GROSS PROFIT | 917,178 | 946,146 | ||||||
OPERATING EXPENSES: | ||||||||
Subcontractor services | 5,509,569 | 1,001,791 | ||||||
Advertising and promotional | 1,401,834 | 41,111 | ||||||
Research and development | 932,329 | 1,200 | ||||||
Legal and professional fees | 465,510 | 35,290 | ||||||
Travel | 403,927 | 92,809 | ||||||
Depreciation and amortization | 345,845 | 152,284 | ||||||
Other expenses | 1,283,579 | 241,294 | ||||||
Total operating expenses | 10,342,593 | 1,565,779 | ||||||
OPERATING LOSS | (9,425,415 | ) | (619,633 | ) | ||||
OTHER INCOME (EXPENSE): | ||||||||
Interest expense | (13,690 | ) | (6,126 | ) | ||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (9,439,105 | ) | (625,759 | ) | ||||
INCOME TAX PROVISION | - | - | ||||||
NET LOSS | $ | (9,439,105 | ) | $ | (625,759 | ) | ||
Net loss per common share-basic and diluted | $ | (1.31 | ) | $ | (0.21 | ) | ||
Weighted-average shares outstanding-basic and diluted | 7,227,812 | 3,008,477 |
The accompanying notes are an integral part of these consolidated financial statements.
F-3 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
Series A Preferred Stock | Common Stock | Additional
Paid-in | Accumulated | Total Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance at December 31, 2016 | - | $ | - | 2,574,200 | $ | 2,574 | $ | 5,015,426 | $ | (3,956,253 | ) | $ | 1,061,747 | |||||||||||||||
Stock issued to founders | 20,000,000 | 20,000 | - | - | (20,000 | ) | - | - | ||||||||||||||||||||
Stock issued for cash | - | - | 393,266 | 393 | 607,899 | - | 608,292 | |||||||||||||||||||||
Stock issued for services | - | - | 650,000 | 650 | 811,850 | - | 812,500 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (625,759 | ) | (625,759 | ) | |||||||||||||||||||
Balance at December 31, 2017 | 20,000,000 | 20,000 | 3,617,466 | 3,617 | 6,415,175 | (4,582,012 | ) | 1,856,780 | ||||||||||||||||||||
Stock issued in business acquisition | - | - | 600,000 | 600 | 1,499,400 | - | 1,500,000 | |||||||||||||||||||||
Stock issued for property | - | - | 120,000 | 120 | 299,880 | - | 300,000 | |||||||||||||||||||||
Stock issued for cash | - | - | 6,805,466 | 6,805 | 8,786,678 | - | 8,793,483 | |||||||||||||||||||||
Stock issued for services | - | - | 3,300,000 | 3,300 | 4,121,700 | - | 4,125,000 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (9,439,105 | ) | (9,439,105 | ) | |||||||||||||||||||
Balance at December 31, 2018 | 20,000,000 | $ | 20,000 | 14,442,932 | $ | 14,442 | $ | 21,122,833 | $ | (14,021,117 | ) | $ | 7,136,158 |
The accompanying notes are an integral part of these consolidated financial statements.
F-4 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
December 31, | December 31, | |||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (9,439,105 | ) | $ | (625,759 | ) | ||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 345,845 | 152,284 | ||||||
Stock-based compensation expense | 4,125,000 | 812,500 | ||||||
(Increase) decrease in assets: | ||||||||
Accounts receivable | 372 | (372 | ) | |||||
Inventory | (80,876 | ) | (41,478 | ) | ||||
Prepaid expenses | (30,374 | ) | (1,651 | ) | ||||
Deposits | (71,486 | ) | (10,617 | ) | ||||
Increase (decrease) in liabilities: | ||||||||
Accounts payable | 14,397 | (7,754 | ) | |||||
Accrued liabilities | (15,090 | ) | 15,090 | |||||
Net cash provided by (used in) operating activities | (5,151,317 | ) | 292,243 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | (1,487,238 | ) | (481,982 | ) | ||||
Cash paid for business acquisition | (40,000 | ) | - | |||||
Advances, related party | (25,000 | ) | - | |||||
Purchase of intellectual property | (1,730,562 | ) | (428,350 | ) | ||||
Net cash used in investing activities | (3,282,800 | ) | (910,332 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of line of credit | - | 29,983 | ||||||
Principal payments on line of credit | (14,881 | ) | (15,102 | ) | ||||
Principal payments on capital lease | (10,513 | ) | (4,838 | ) | ||||
Cash proceeds from issuance of stock | 8,793,483 | 608,292 | ||||||
Net cash provided by financing activities | 8,768,089 | 618,335 | ||||||
INCREASE IN CASH | 333,972 | 246 | ||||||
CASH AT THE BEGINNING OF THE PERIOD | 246 | - | ||||||
CASH AT THE END OF THE PERIOD | $ | 334,218 | $ | 246 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
Schedule of Non-cash Investing and Financing Activities: | ||||||||
Stock issued for property | $ | 300,000 | $ | - | ||||
Stock issued for business acquisition | $ | 1,500,000 | $ | - | ||||
Equipment acquired with capital lease | $ | - | $ | 62,782 | ||||
Preferred stock issued to founders for no consideration | $ | - | $ | 20,000 | ||||
Cash paid for | ||||||||
Interest | $ | 13,690 | $ | 6,126 | ||||
Income taxes | $ | - | $ | - |
The accompanying notes are an integral part of these consolidated financial statements.
F-5 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 2018 AND 2017
Note 1 - Organization and Description of Business
SHE Beverage Company, Inc. (“the Company” or “SHE”) was organized on January 6, 2015 in the State of California. Its main corporate offices are located in Lancaster, California. SHE Beverage Company is a specialty beverage producer with a portfolio of subsidiary businesses that all share a focus on women’s tastes and preferences. SHE was founded in 2014 by two women entrepreneurs, Lupe Rose and Sonja Shelby, and soon added a third co-founder, Katherine Dirden. The Company continues to be led by its three co-founders and a predominantly female executive team. To date, the Company has focused its efforts primarily on raising funds and developing its business plan by acquiring businesses and properties, and developing its beverage formulations.
Note 2 – Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries: Pink Leaf by SHE, LLC (“Pink Leaf”) and Mink Bath Balms, LLC (“Mink”). Pink Leaf and Mink have no assets or operations, other than capitalized product formulations purchased by the Company in separate transactions prior to the Company acquiring each subsidiary (Note 6) and reported in the Consolidated Balance Sheets, and $269,674 of research and development costs included in the Consolidated Statements of Operations. All subsidiaries were organized or incorporated in the State of Nevada. All intercompany transactions and balances have been eliminated.
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities and the reported amounts of revenue and expense. These judgments, estimates and assumptions are used for, but not limited to, revenue recognition, inventory valuation and write-downs, loss contingencies, accounting for asset acquisitions, and the fair value of common stock. The Company bases its estimates on various factors and information, which may include, but are not limited to, history and prior experience, the Company’s forecasts and future plans, current economic conditions and information from third-party professionals that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not readily apparent from other sources. Actual results may differ from those estimates and the differences may be material.
Business Combinations
We include the results of operations of the businesses that we acquire from unrelated entities and individuals as of the acquisition date. We allocate the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Acquisitions of entities controlled by our majority shareholders are accounted for as transfers of net assets between entities under common control whereby the assets and liabilities of the acquired companies are reported at historical cost.
F-6 |
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at December 31, 2018 or December 31, 2017.
Concentration of Credit Risk
From time to time our cash balances, held at major financial institutions, may exceed the federally insured limits of $250,000. At December 31, 2018, the Company had a cash balance with a financially insured institution of $334,218, which exceeded the Federal Deposit Insurance Company (“FDIC”) insured limit by $84,218. Management believes that the financial institution is financially sound, and the risk of loss is low. The Company had a nominal cash balance at December 31, 2017.
The Company periodically holds significant balances of petty cash on site that is not secured. As of December 31, 2018, and 2017, the Company did not have any petty cash.
During the years ended December 31, 2018 and 2017, the Company generated 94% and 91%, respectively, of total revenues from a single entity not related to the Company (see ‘Revenue Recognition’ below).
Accounts Receivable
Accounts receivable consist of amounts due from customers for the sales of products and services. The Company reviews its accounts receivable and provides allowances of specific amounts if collectability is no longer reasonably assured based on historical experience and specific customer collection issues. There was no allowance for doubtful accounts as of December 31, 2018 or 2017.
Inventory
Inventory, which consists primarily of the Company’s finished products and packaging, is stated at the lower of cost or net realizable value, determined using the first-in, first-out method as follows:
December 31, 2018 | December 31, 2017 | |||||||
Beverages | $ | 104,799 | $ | 40,621 | ||||
Clothing | - | 857 | ||||||
Product packaging | 17,555 | - | ||||||
Total | $ | 122,354 | $ | 41,478 |
If the Company identifies excess, obsolete or unsalable items, its inventory is written down to its net realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. The Company did not identify any excess, obsolete or unsalable items during the years ended December 31, 2018 and 2017.
F-7 |
Property, Plant and Equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased assets at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the leased assets or the period of the related lease. Amortization of assets under capital leases is included in depreciation expense. The estimated useful lives of the Company’s property, plant and equipment are as follows:
Buildings | 27.5 years |
Vehicles | 5 years |
Machinery and equipment | 5 years |
Furniture and fixtures | 7 years |
Computer software | 7 years |
Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change the way an asset functions or that extend the useful life are capitalized.
The Company is currently in process of constructing a brewery in one of the rented locations. All construction in progress costs are capitalized until the brewery is complete and the asset is put into service. The building improvements will be depreciated over the remaining life of the building rental agreement.
Intangible Assets and Goodwill
Intangible assets are comprised of website development, software development, acquired research and development costs, acquired trademarks and patents, and intellectual property, net of amortization. In accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”), the costs of internally developing other intangible assets are expensed as incurred.
However, as allowed by ASC 350, costs associated with the acquisition of patents and trademarks from third parties, legal fees and similar costs relating to patents have been capitalized. Acquired trademarks and patents are amortized over their estimated remaining useful lives of ten years.
Research and development costs consist mainly of acquired product formulations. Acquired research and development costs are capitalized and amortized over their remaining estimated useful lives ten years. Research and development expenses incurred internally are expensed as incurred in accordance with ASC 730, Research and Development.
Goodwill is not amortized but tested at least annually for impairment. Impairment charge is recognized if the carrying amount of goodwill exceeds the implied fair value of that goodwill.
Long-Lived Assets, Goodwill and Other Acquired Intangible Assets
The Company evaluates long-lived assets, such as property, plant and equipment and intangible assets, including goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying value of the assets, the Company reduces the carrying amount of the assets to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. There were no impairment losses recorded during the years ended December 31, 2018 and 2017.
Intangible assets with definite lives are amortized over their estimated useful lives.
F-8 |
Fair Value Measurement
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
The Company maintains policies and procedures to value instruments using the best and most relevant data available. The Company does not have any level 2 or 3 fair value assets or liabilities.
Our level 1 financial instruments as of December 31, 2018 and 2017 consist of cash, accounts receivable, inventory, property and equipment, intangible assets and goodwill, and accounts payable. The carrying value of our financial instruments approximates their fair value.
Revenue Recognition
On January 10, 2017, the Company adopted ASC 606, Revenue from Contracts with Customers. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606.
The Company recognizes revenue from the sale of products and services in accordance with the following criteria:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations
Step 5: Recognize the revenue when the entity satisfies a performance obligation
The Company’s revenues accounted for under ASC 606 generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price.
The Company recognizes revenue for the amount of consideration expected to be collected from the customers, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and returns. The Company reserves for estimated returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly.
F-9 |
Event Revenue
During the years ended December 31, 2018 and 2017, the Company facilitated various social events, which included the rental of its premium event space that is currently being converted to a tap room and brewery, to generate income while developing its beverage formulations and pursuing its initial public offering. Event revenue is recognized at the point in time the services are performed, or events are held. Amounts paid in advance, such as advance deposits for future events, are recorded as a deferred revenue liability until the goods or services are provided to the customer. The Company didn’t have any deferred revenue at December 31, 2018 or 2017.
Merchandise Revenue
The Company offers merchandise in the following core merchandise categories: beverages, clothing, and sundries. The majority of revenue from merchandise sales is recognized at the point of sale. Revenue generated through e-commerce or special orders is recognized upon shipment to the customer. For merchandise shipped directly to the customer, shipping and handling costs are expensed as incurred as fulfillment costs and included in merchandise costs in the consolidated statements of income.
During the years ended December 31, 2018 and 2017, the Company earned Event Revenue of $1,618,875 and $1,569,690, respectively, which was with one entity not related to the Company and represented 94% and 91%, respectively, of total revenues. The remaining 6% and 9%, respectively, consisted of Merchandise Revenue of $110,324 and $152,670, respectively. The Company anticipates that as it continues to develop its specialty beverages and related business goals focusing on women’s tastes and preferences, that event sales will decrease and other dominant revenue streams, primarily its specialty beverage sales, will emerge.
Stock-Based Compensation
The Company records stock-based compensation expense for bonus and advisory services relative to the fair value of the awards on the grant date in accordance with ASC 718, Compensation - Stock Compensation (employees), and ASC 505-50, Equity-Based Payments to Non-Employees. The Company recognizes stock issued for advisory services over the requisite period of the service, which is usually the vesting period. The Company issued shares of common stock for services during the years ended December 31, 2018 and 2017 (Note 10) but has not adopted any stock option plans.
Sales Taxes
The obligations to the appropriate tax authorities are included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities.
Advertising and Promotion
All costs associated with advertising and promoting products are expensed as incurred. These expenses were $1,401,834, and $41,111 for the years ended December 31, 2018 and 2017, respectively.
Income Taxes
The provision for income taxes is determined in accordance with the provisions of ASC 740, Accounting for Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
F-10 |
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all of the deferred tax assets will not be recognized.
For the years ended December 31, 2018 and 2017 we did not have any interest and penalties or any significant unrecognized uncertain tax positions.
Income (Loss) Per Common Share
The Company accounts for earnings (loss) per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to convertible debt and equity, stock options and warrants for each year. As of December 31, 2018, and 2017, there were no potentially dilutive debt or equity instruments issued or outstanding, with the exception of the 20,000,000 Preferred A shares currently issued and outstanding which can be voluntarily converted to 200,000,000 shares of common stock.
Related Party Transactions
The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Recently Issued Accounting Standards
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and do not believe any of these pronouncements will have a material impact on our financial statements, other than as described below:
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires a lessee to recognize on the balance sheet the right-of-use assets and lease liabilities for leases with a lease term of more than twelve months. This update also requires additional disclosures about the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption for lessees existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company does have various leases (Note 9) and is still in the process of determining the impact this ASU will have on its financial statements. As an emerging growth company, the Company is afforded additional time to adopt this standard and anticipates adopting the standard the fiscal year beginning December 31, 2019.
Note 3 – Prepaid Expenses
As of December 31, 2018, and 2017, prepaid expenses consisted of amounts paid in advanced for the Company’s SHE Week to be held in 2020. Expenses include facility fees, hotel accommodations, and other event fees. Total prepayments for the SHE Week event were $32,025 and $1,651 at December 31, 2018 and 2017, respectively.
F-11 |
Note 4 – Deposits
Deposits consist of the following as of:
December 31, 2018 | December 31, 2017 | |||||||
Brewery equipment deposit | $ | 65,736 | $ | - | ||||
Lease security deposits | 16,367 | 10,617 | ||||||
Total deposits | $ | 82,103 | $ | 10,617 |
Note 5 – Property, Plant and Equipment
Property, plant and equipment consist of the following as of:
December 31, 2018 | December 31, 2017 | |||||||
Construction in progress | $ | 1,475,073 | $ | 480,615 | ||||
Machinery and equipment | 426,445 | 64,149 | ||||||
Land | 300,000 | - | ||||||
Vehicles | 73,042 | - | ||||||
Furniture and fixtures | 57,442 | - | ||||||
Total property, plant and equipment | 2,332,002 | 544,764 | ||||||
Less: accumulated depreciation | (94,499 | ) | (9,346 | ) | ||||
Net property, plant and equipment | $ | 2,237,503 | $ | 535,418 |
Depreciation expense was $85,153 and $9,346 for the years ended December 31, 2018 and 2017, respectively.
The Company leases equipment totaling $64,149 under a capital lease (see Note 9). The depreciation expense of the equipment under capital lease totaled $12,830 and $7,484 for the years December 31, 2018 and 2017, respectively, and is included in depreciation expense. The resulting accumulated depreciation totaled $20,314 and $7,484 at December 31, 2018 and 2017, respectively.
Note 6 – Intangible Assets and Goodwill
Intangible assets and goodwill, net consist of the following as of:
December 31, 2018 | December 31, 2017 | |||||||
Acquired product formulations | $ | 3,209,267 | $ | 1,514,312 | ||||
Goodwill | 1,500,000 | - | ||||||
Website development | 145,300 | 123,350 | ||||||
Acquired patents and trademarks | 53,657 | - | ||||||
4,908,224 | 1,637,662 | |||||||
Less: accumulated amortization | (524,566 | ) | (263,874 | ) | ||||
Total intangible assets and goodwill assets, net | $ | 4,383,658 | $ | 1,373,788 |
F-12 |
Amortization expense was $260,692 and $142,938 for the years ended December 31, 2018 and 2017, respectively.
Future amortization expense for the Company’s intangible assets are as follows for the years ended December 31:
2019 | $ | 326,292 | ||
2020 | 326,292 | |||
2021 | 326,292 | |||
2022 | 326,292 | |||
2023 | 326,292 | |||
Thereafter | 2,752,198 | |||
Total | $ | 4,383,658 |
Note 7 – Business Acquisitions
On September 9, 2018, the Company acquired 100% of the ownership interests in a company for $40,000 and 400,000 shares of common stock valued at $2.50 a share or $1,000,000. In consideration for the acquisition, the Company allocated $40,000 to the fair market value of intellectual properties acquired, resulting in goodwill of $1,000,000. As of December 31, 2018, no impairment was recorded on the goodwill.
On October 1, 2018, the Company acquired 100% of the ownership interests in a company for 200,000 shares of common stock valued at $2.50 a share or $500,000. In consideration for the acquisition, the Company recorded goodwill of $500,000. As of December 31, 2018, no impairment was recorded on the goodwill.
Note 8 – Line of Credit
In 2017, the Company entered into an accounts receivable line of credit with a financial institution. Payments are due monthly, and the line of credit carries an interest rate of the LIBOR 1-month rate. The line of credit is renewed annually and is set to expire in March 2020. During 2017, the Company advanced $29,983 on the line of credit and made principal payments totaling $15,102. During 2018, the Company did not receive any advances and made principal payments of $14,881. The balance of the note was $0 and $14,881 as of December 31, 2018 and 2017, respectively. Total interest incurred and paid on the note was $5,886 and $3,364 during the years ended December 31, 2018 and 2017, respectively.
Note 9 – Leases
The Company leases the majority of its commercial properties under non-cancelable operating lease agreements that expire from 2019 through 2022. The commercial property leases generally have an initial term ranging from 2-5 years with renewal options on certain leases. Payments on the operating leases range from $1,000 to $7,500 a month.
On June 7, 2017, the Company entered into a capital and financing lease agreement with a financial institution for equipment. The total equipment value leased was $64,149, of which $62,782 was financed. The note calls for monthly payments of $1,367 and the financing agreement matures on June 30, 2022. The balance of the note was $47,431 ($11,738 current portion) and $57,944 ($10,513 current portion) as of December 31, 2018 and 2017, respectively. Total interest incurred and paid on the note was $7,804 and $2,762 during the years ended December 31, 2018 and 2017, respectively.
F-13 |
Future minimum lease payments for the Company’s capital and operating lease obligations having initial or remaining terms in excess of one year are as follows for the years ended December 31:
Capital Lease | Operating Leases | |||||||
2019 | $ | 16,405 | $ | 183,530 | ||||
2020 | 16,405 | 82,405 | ||||||
2021 | 16,405 | 23,596 | ||||||
2022 | 6,835 | - | ||||||
Total lease commitment | 56,050 | $ | 289,531 | |||||
Less: amount representing interest | (8,619 | ) | ||||||
Less: current portion | (11,738 | ) | ||||||
Noncurrent capital lease obligation | $ | 35,693 |
Note 10 – Stockholders’ Equity
Preferred Stock
The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001. The Company has designated 20,000,000 of the preferred shares as Series A and 5,000,000 shares as Series B. Each share of Series A preferred stock carries 10 votes and is convertible, at the discretion of the Company’s Board of Directors, to 10 shares of common stock. The Series B preferred shares shall have the preferences, limitations, conversion, voting and any relative rights as determined by the Board of Directors at the time of issuance of each share of Series B Preferred Stock.
In 2017, the Company issued 20,000,000 shares of preferred Series A stock as founders shares to the Company’s founding members of management pursuant to a recapitalization.
As of December 31, 2018 and 2017, the Company had 20,000,000 and 0 shares of Series A preferred stock issued and outstanding, respectively. No shares of Series B preferred stock have been issued.
Common Stock
The Company is authorized to issue 400,000,000 shares of common stock with a par value of $0.001.
During 2018 and 2017, the Company issued 6,805,466 and 393,266, respectively, shares of stock to investors at prices ranging from $1.25 to $5.00 per share for cash totaling $8,793,483 and $608,292, respectively.
In 2018, the Company issued 120,000 shares of common stock for property owned by a non-related individual. The value of the property was $300,000 and equaled the value of the shares exchanged.
In 2018, the Company acquired businesses in exchange for 600,000 shares of stock at $2.50 per share, or $1,500,000. See Note 7.
During the years ended December 31, 2018 and 2017, the Company issued 3,300,000 and 650,000, respectively, shares of common stock for bonus and advisory services, respectively. As a result, the Company recognized an expense for stock issued for services totaling $4,125,000 and $812,500 for the years ended December 31, 2018 and 2017, respectively.
As of December 31, 2018, and 2017, the Company had 14,442,932 and 3,617,466 shares of common stock issued and outstanding, respectively.
Note 11 – Related Party Transactions
In 2017, the Company issued 20,000,000 shares of preferred stock to members of management for no consideration.
F-14 |
During 2018, the Company had sales to a related entity that is managed by the Company’s CEO totaling $30,267.
During 2018, the Company advanced $25,000 to a company that was owned by management of the Company. Total balance of related party receivables at December 31, 2018 and 2017 was $25,000 and $0, respectively.
The Company uses a building contractor for all its construction and building improvements. One of the Company’s major shareholders also owns one of the construction companies. During the years ended December 31, 2018 and 2017, the Company incurred $114,211 and $368,834, respectively, with this contractor, none of which is still owed at December 31, 2018 or 2017.
Note 12 – Commitments and Contingencies
Legal Proceedings
From time to time, the Company receives claims of and becomes subject to litigation related to the conduct and operation of the Company’s business. The Company does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements or business. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows. The Company is currently a party to the following litigation:
On August 19, 2019 the Company filed a temporary restraining order against Farmer after learning that Farmer had been selling, SHE Beverage Company common shares outside of the Company’s authority. On October 8, 2019, the Court extended the temporary restraining order by issuing a Preliminary Injunction.
In 2019, the Company received a request from an investor for a refund of their original investment, which he accepted. However, the investor decided to pursue legal action to try and obtain a judgment that, in the Company’s opinion, does not reflect the investor’s original investment amount. The Company also received a writ of mandate from another investor requesting inspection of the Company’s financial records.
The Company intends to defend all three proceedings and has the belief the claims are without merit and that the Company will prevail in all matters.
Note 13 – Income Taxes
The Company accounts for income taxes under ASC 740-10, which requires use of the liability method. ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
For the years ended December 31, 2018 and 2017, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2018 and 2017, the Company had approximately $14,021,000 and $4,582,000 of federal net operating losses, respectively. The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act enacted in 2017. The schedules below reflect the Federal tax provision, deferred tax asset and valuation allowance using the new rates adjusted in the period of enactment.
The components of the Company’s deferred tax asset are as follows:
12/31/18 | 12/31/17 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carry forwards | $ | 14,021,000 | $ | 4,582,000 | ||||
Net deferred tax assets before | ||||||||
Valuation allowance | $ | 2,944,400 | $ | 962,200 | ||||
Less: valuation allowance | (2,944,400 | ) | (962,200 | ) | ||||
Net deferred tax assets | $ | - | $ | - |
F-15 |
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. Federal income tax rate of 21% to pre-tax loss is as follows:
12/31/18 | 12/31/17 | |||||||
Federal tax benefit | $ | 1,982,200 | $ | 131,400 | ||||
Change in valuation allowance | (1,982,200 | ) | 422,500 | |||||
Effect on rate change from 35% to 21% on deferred tax assets | - | (553,900 | ) | |||||
Net deferred tax assets | $ | - | $ | - |
Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets, which changed by ($1,982,200) and $422,500 during the years ended December 31, 2018 and 2017, respectively. The effect of the change in federal tax rates on deferred tax assets (and valuation allowance) due to the Tax Cuts & JOBS Act was ($553,900) during the year ended December 31, 2017. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014 through the present.
Note 14 – Subsequent Events
The Company evaluated its financial statements for subsequent events for recognition or disclosure in the financial statements through the date the financial statements were issued and noted the following items:
February 1, 2019 - The Company purchased 100% of the membership interests of Le Chic Home from independent parties in exchange for 110,000 shares of common stock valued at $2.50 per share ($275,000 total).
March 22, 2019 - The Company issued 60,000 shares of common stock for real estate valued at $95,000.
May 6, 2019 - The Company issued 200,000 shares of common stock for real estate valued at $250,000.
May 15, 2019 - The Company purchased 90% interest in issued and outstanding membership interests of Brandyay, LLC from independent parties in exchange for 2,160,000 shares of common stock valued at $2.50 per share ($5,400,000 total).
July 24, 2019 - The Company issued 50,000 shares of common stock for real estate valued at $125,000.
July 30, 2019 - of the Company acquired 100% of the issued and outstanding common stock of the Woman’s Football League Association from the Company’s majority shareholders. This was accounted for as a transfer of net assets at historical cost between entities under common control.
August 22, 2019 - The Company issued 120,000 shares of common stock for real estate valued at $300,000.
September 11, 2019: The Company acquired 90% issued and outstanding common stock of Buildingit, LLC from an unrelated party in exchange for 1,900,000 shares of Company common stock valued at $2.50 per share ($4,750,000 total).
On October 14, 2019: The Company entered into a service agreement for the Application build and development of SHEMeets.com, Piccup and Pink Cash for 300,000 shares of Company common stock.
Subsequent to June 30, 2019, the Company has been advanced an additional $24,600 on its line of credit and made principal and interest payments totaling $30,940.
Since June 30, 2019, the Company has issued 6,835,967 shares of common stock for $8,544,959 at $1.25 per share for cash.
F-16 |
SHE BEVERAGE COMPANY, INC.
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2019 and 2018
(Unaudited)
F-17 |
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2019 AND DECEMBER 31, 2018
(UNAUDITED)
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 77,260 | $ | 334,218 | ||||
Accounts receivable | 2,479 | - | ||||||
Advances, related party | 269,880 | 25,000 | ||||||
Inventory | 166,160 | 122,354 | ||||||
Prepaid expenses | 105,330 | 32,025 | ||||||
Total current assets | 621,109 | 513,597 | ||||||
Right-of-use assets - operating leases | 204,000 | - | ||||||
Right-of-use asset - financing lease | 50,250 | - | ||||||
Property, plant, and equipment, net | 3,102,051 | 2,237,503 | ||||||
Purchased intangible assets and goodwill, net | 10,019,151 | 4,383,658 | ||||||
Deposits | 82,103 | 82,103 | ||||||
TOTAL ASSETS | $ | 14,078,664 | $ | 7,216,861 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 2,843 | $ | 33,272 | ||||
Lease liability, current - operating leases | 102,000 | - | ||||||
Lease liability, current - financing lease | 12,403 | 11,738 | ||||||
Total current liabilities | 117,246 | 45,010 | ||||||
Lease liability, less current portion - operating leases | 102,000 | - | ||||||
Lease liability, less current portion - financing lease | 29,321 | 35,693 | ||||||
TOTAL LIABILITIES | 248,567 | 80,703 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Series A Preferred Stock, $0.001 par value, 20,000,000 shares authorized, 20,000,000 shares issued and outstanding | 20,000 | 20,000 | ||||||
Series B Preferred Stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding | - | - | ||||||
Common stock, $0.001 par value, 400,000,000 shares authorized, 21,258,712 and 14,442,932 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 21,258 | 14,442 | ||||||
Additional paid-in capital | 32,734,523 | 21,122,833 | ||||||
Accumulated deficit | (18,945,684 | ) | (14,021,117 | ) | ||||
Total stockholders' equity | 13,830,097 | 7,136,158 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 14,078,664 | $ | 7,216,861 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-18 |
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(UNAUDITED)
3 Months Ended | 6 Months Ended | |||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||
REVENUE: | ||||||||||||||||
Event revenue | $ | 373,525 | $ | 393,591 | $ | 718,358 | $ | 797,792 | ||||||||
Merchandise revenue | 13,122 | 28,270 | 24,058 | 59,515 | ||||||||||||
Total revenue | 386,647 | 421,861 | 742,416 | 857,307 | ||||||||||||
MERCHANDISE COST OF SALES: | ||||||||||||||||
Event cost of sales | 179,292 | 180,010 | 424,709 | 390,921 | ||||||||||||
Merchandise cost of sales | 1,701 | 2,769 | 8,527 | 3,903 | ||||||||||||
Total cost of sales | 180,993 | 182,779 | 433,236 | 394,824 | ||||||||||||
GROSS PROFIT | 205,654 | 239,082 | 309,180 | 462,483 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Subcontractor services | 1,908,840 | 1,196,248 | 2,824,367 | 1,834,483 | ||||||||||||
Advertising and promotional | 301,276 | 166,371 | 760,811 | 202,540 | ||||||||||||
Research and development | 3,193 | 156 | 507,681 | 6,963 | ||||||||||||
Legal and professional fees | 86,293 | 103,480 | 140,944 | 156,411 | ||||||||||||
Travel | 21,030 | 23,262 | 48,531 | 32,964 | ||||||||||||
Depreciation and amortization | 110,191 | 42,219 | 283,475 | 84,437 | ||||||||||||
Other expenses | 78,612 | 217,652 | 665,443 | 498,784 | ||||||||||||
Total operating expenses | 2,509,435 | 1,749,388 | 5,231,252 | 2,816,582 | ||||||||||||
OPERATING LOSS | (2,303,781 | ) | (1,510,306 | ) | (4,922,072 | ) | (2,354,099 | ) | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense | (1,248 | ) | (1,510 | ) | (2,495 | ) | (3,091 | ) | ||||||||
Total other expense | (1,248 | ) | (1,510 | ) | (2,495 | ) | (3,091 | ) | ||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (2,305,029 | ) | (1,511,816 | ) | (4,924,567 | ) | (2,357,190 | ) | ||||||||
INCOME TAX PROVISION | - | - | - | - | ||||||||||||
NET LOSS | $ | (2,305,029 | ) | $ | (1,511,816 | ) | $ | (4,924,567 | ) | $ | (2,357,190 | ) | ||||
Net loss per common share | ||||||||||||||||
- basic and diluted | $ | (0.12 | ) | $ | (0.26 | ) | $ | (0.28 | ) | $ | (0.45 | ) | ||||
Weighted-average shares outstanding | ||||||||||||||||
- basic and diluted | 19,587,440 | 5,909,808 | 17,652,609 | 5,255,660 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-19 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(UNAUDITED)
For the six months ended June 30, 2019 and 2018:
Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance at December 31, 2018 | 20,000,000 | $ | 20,000 | 14,442,932 | $ | 14,442 | $ | 21,122,833 | $ | (14,021,117 | ) | $ | 7,136,158 | |||||||||||||||
Stock issued in business acquisition | - | - | 2,270,000 | 2,270 | 5,672,730 | - | 5,675,000 | |||||||||||||||||||||
Stock issued for property | - | - | 320,000 | 320 | 344,680 | - | 345,000 | |||||||||||||||||||||
Stock issued for services | - | - | 1,700,000 | 1,700 | 2,123,300 | - | 2,125,000 | |||||||||||||||||||||
Stock issued for cash | - | - | 2,525,780 | 2,526 | 3,281,323 | - | 3,283,849 | |||||||||||||||||||||
Contributed capital | - | - | - | - | 189,657 | - | 189,657 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (4,924,567 | ) | (4,924,567 | ) | |||||||||||||||||||
Balance at June 30, 2019 | 20,000,000 | $ | 20,000 | 21,258,712 | $ | 21,258 | $ | 32,734,523 | $ | (18,945,684 | ) | $ | 13,830,097 | |||||||||||||||
Balance at December 31, 2017 | 20,000,000 | $ | 20,000 | 3,617,466 | $ | 3,617 | $ | 6,415,175 | $ | (4,582,012 | ) | $ | 1,856,780 | |||||||||||||||
Stock issued for cash | - | - | 2,908,026 | 2,908 | 3,757,350 | - | 3,760,258 | |||||||||||||||||||||
Stock issued for services | - | - | 1,900,000 | 1,900 | 2,373,100 | - | 2,375,000 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (2,357,190 | ) | (2,357,190 | ) | |||||||||||||||||||
Balance at June 30, 2018 | 20,000,000 | $ | 20,000 | 8,425,492 | $ | 8,425 | $ | 12,545,625 | $ | (6,939,202 | ) | $ | 5,634,848 |
F-20 |
For the three months ended June 30, 2019 and 2018:
Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance at March 31, 2019 | 20,000,000 | $ | 20,000 | 18,220,432 | $ | 18,220 | $ | 26,106,305 | $ | (16,640,655 | ) | $ | 9,503,870 | |||||||||||||||
Stock issued in business acquisition | - | - | 2,160,000 | 2,160 | 5,397,840 | - | 5,400,000 | |||||||||||||||||||||
Stock issued for property | - | - | 200,000 | 200 | 249,800 | - | 250,000 | |||||||||||||||||||||
Stock issued for services | - | - | 200,000 | 200 | 248,300 | - | 248,500 | |||||||||||||||||||||
Stock issued for cash | - | - | 478,280 | 478 | 542,621 | - | 543,099 | |||||||||||||||||||||
Contributed capital | - | - | - | - | 189,657 | - | 189,657 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (2,305,029 | ) | (2,305,029 | ) | |||||||||||||||||||
Balance at June 30, 2019 | 20,000,000 | $ | 20,000 | 21,258,712 | $ | 21,258 | $ | 32,734,523 | $ | (18,945,684 | ) | $ | 13,830,097 | |||||||||||||||
Balance at March 31, 2018 | 20,000,000 | 20,000 | 5,227,685 | 5,227 | 9,329,113 | (5,427,386 | ) | 3,926,954 | ||||||||||||||||||||
Stock issued for services | - | - | 1,000,000 | 1,000 | 1,249,000 | - | 1,250,000 | |||||||||||||||||||||
Stock issued for cash | - | - | 2,197,807 | 2,198 | 1,967,512 | - | 1,969,710 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (1,511,816 | ) | (1,511,816 | ) | |||||||||||||||||||
Balance at June 30, 2018 | 20,000,000 | $ | 20,000 | 8,425,492 | $ | 8,425 | $ | 12,545,625 | $ | (6,939,202 | ) | $ | 5,634,848 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-21 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(UNAUDITED)
June 30, | June 30, | |||||||
2019 | 2018 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (4,924,567 | ) | $ | (2,357,190 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Depreciation and amortization | 283,475 | 84,437 | ||||||
Stock-based compensation expense | 2,125,000 | 2,375,000 | ||||||
(Increase) decrease in assets: | ||||||||
Accounts receivable | (2,479 | ) | 372 | |||||
Inventory | (43,806 | ) | (80,876 | ) | ||||
Prepaid expenses | (73,305 | ) | (30,374 | ) | ||||
Deposits | - | (71,486 | ) | |||||
Increase (decrease) in liabilities: | ||||||||
Accounts payable | (30,429 | ) | 34,397 | |||||
Accrued liabilities | - | (15,090 | ) | |||||
Net cash used in operating activities | (2,666,111 | ) | (60,810 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | (668,562 | ) | (1,487,238 | ) | ||||
Advances, related party | (244,880 | ) | (25,000 | ) | ||||
Purchase of intellectual property | (145,204 | ) | (1,760,700 | ) | ||||
Net cash used in investing activities | (1,058,646 | ) | (3,272,938 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal payments on capital lease | (5,707 | ) | (5,112 | ) | ||||
Contributed capital | 189,657 | - | ||||||
Cash proceeds from issuance of stock | 3,283,849 | 3,760,258 | ||||||
Net cash provided by financing activities | 3,467,799 | 3,755,146 | ||||||
INCREASE IN CASH | (256,958 | ) | 421,398 | |||||
CASH AT THE BEGINNING OF THE PERIOD | 334,218 | 246 | ||||||
CASH AT THE END OF THE PERIOD | $ | 77,260 | $ | 421,644 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
Schedule of Non-cash Investing and Financing Activities: | ||||||||
Stock issued for property | $ | 345,000 | $ | - | ||||
Stock issued for business acquisition | $ | 5,675,000 | $ | - | ||||
Recording of right-of-use assets under operating lease | $ | 204,000 | $ | - | ||||
Recording of right-of-use asset under financing lease | $ | 64,149 | $ | - | ||||
Cash paid for | ||||||||
Interest | $ | 2,495 | $ | 3,091 | ||||
Income taxes | $ | - | $ | - |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-22 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2019 and 2018
(Unaudited)
Note 1 - Organization and Description of Business
SHE Beverage Company, Inc. (“the Company” or “SHE”) was organized on January 6, 2015 in the State of California. Its main corporate offices are located in Lancaster, California. SHE Beverage Company is a specialty beverage producer with a portfolio of subsidiary businesses that all share a focus on women’s tastes and preferences. SHE was founded in 2014 by two women entrepreneurs, Lupe Rose and Sonja Shelby, and soon added a third co-founder, Katherine Dirden. The Company continues to be led by its three co-founders and a predominantly female executive team. To date, the Company has focused its efforts primarily on raising funds and developing its business plan by acquiring businesses and properties and developing its beverage formulations.
Note 2 - Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited interim financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto contained elsewhere in this Form S-1.
The accompanying consolidated financial statements include the results of the Company and its wholly-owned subsidiaries: Pink Leaf by SHE, LLC (“Pink Leaf”), Mink Bath Balms, LLC (“Mink”), and Le Chic Home (“Le Chic”), as well as its 90%-owned subsidiary, Brandyay, LLC (“Brandyay”). Pink Leaf, Mink, and Le Chic have no assets, liabilities, or operations, other than capitalized product formulations purchased by the Company in separate transactions prior to the subsidiaries being acquired by the Company (Note 6) and reported in the Consolidated Balance Sheets and $79,432, and $0 of research and development costs included in the Consolidated Statements of Operations for the six months ended June 30, 2019 and 2018, respectively. Brandyay has no assets, liabilities or operations, other than capitalized intellectual properties (Note 6). As such, there is no non-controlling interest as of and for the six months ended June 30, 2019. All subsidiaries were organized or incorporated in the State of Nevada. All intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities and the reported amounts of revenue and expense. These judgments, estimates and assumptions are used for, but not limited to, revenue recognition, inventory valuation and write-downs, loss contingencies, accounting for asset acquisitions and the fair value of common stock. The Company bases its estimates on various factors and information, which may include, but are not limited to, history and prior experience, the Company’s forecasts and future plans, current economic conditions and information from third-party professionals that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not readily apparent from other sources. Actual results may differ from those estimates and the differences may be material.
F-23 |
Business Combinations
We include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of the identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Acquisitions of entities controlled by our majority shareholders are accounted for as transfers of net assets between entities under common control whereby the assets and liabilities of the acquired companies are reported at historical cost.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company has no cash equivalents at June 30, 2019 or December 31, 2018.
Concentration of Credit Risk
From time to time our cash balances, held at major financial institutions, may exceed the federally insured limits of $250,000. At June 30, 2019 and December 31, 2018, the Company had cash balances at a financially insured institution of $77,260 and $334,218, respectively, which exceeded the Federal Deposit Insurance Company (“FDIC”) insured limit by $0 and $84,218, respectively. Management believes that the financial institution is financially sound, and the risk of loss is low.
The Company periodically holds significant balances of petty cash on site that is not secured. As of June 30, 2019, and December 31, 2018, the Company did not have any petty cash.
During the six months ended June 30, 2019 and 2018, the Company generated 97% and 93%, respectively, from a single entity not related to the Company (see ‘Revenue Recognition’ below).
Accounts Receivable
Accounts receivable consist of amounts due from customers for the sales of products and services. The Company reviews its accounts receivable and provides allowances of specific amounts if collectability is no longer reasonably assured based on historical experience and specific customer collection issues. There was no allowance for doubtful accounts as of June 30, 2019 or December 31, 2018.
Inventory
Inventory, which consist of the Company’s beverages, clothing, and sundry finished products, is stated at the lower of cost or net realizable value, determined using the first-in, first-out method.
If the Company identifies excess, obsolete or unsalable items, its inventory is written down to its net realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. The Company did not identify any excess, obsolete or unsalable items during the six months ended June 30, 2019 or 2018.
Property, Plant and Equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. Assets held under financing leases are accounted for in accordance with ASC 842, Leases (Note 9). The estimated useful lives of the Company’s property, plant and equipment are as follows:
F-24 |
Buildings | 27.5 years |
Vehicles | 5 years |
Machinery and equipment | 5 years |
Furniture and fixtures | 7 years |
Computer software | 7 years |
Repair and maintenance costs are expensed when incurred. Expenditures for remodels, refurbishments and improvements that add to or change the way an asset functions or that extend the useful life are capitalized.
The Company is currently in process of constructing a brewery in one of the rented locations. All construction in progress costs are capitalized until the brewery is complete and the asset is put into service. The building improvements will be depreciated over the remaining life of the building rental agreement.
Intangible Assets and Goodwill
Intangible assets are comprised of website development, software development, acquired research and development costs, acquired trademarks and patents, and intellectual property, net of amortization. In accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”), the costs of internally developing other intangible assets are expensed as incurred.
However, as allowed by ASC 350, costs associated with the acquisition of patents and trademarks from third parties, legal fees and similar costs relating to patents have been capitalized. Acquired trademarks and patents are amortized over their estimated remaining useful lives of ten years.
Research and development costs consist mainly of acquired product formulations. Acquired research and development costs are capitalized and amortized over their remaining estimated useful lives ten years. Research and development expenses incurred internally are expensed as incurred in accordance with ASC 730, Research and Development.
Goodwill is not amortized but tested at least annually for impairment. Impairment charge is recognized if the carrying amount of goodwill exceeds the implied fair value of that goodwill.
Long-Lived Assets, Goodwill and Other Acquired Intangible Assets
The Company evaluates long-lived assets, such as property, plant and equipment and intangible assets, including goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying value of the assets, the Company reduces the carrying amount of the assets to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. There were no impairment losses recorded during the six months ended June 30, 2019 or 2018.
Intangible assets with definite lives are amortized over their estimated useful lives.
Fair Value Measurement
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
F-25 |
Level 2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
The Company maintains policies and procedures to value instruments using the best and most relevant data available. The Company does not have any level 2 or 3 fair value assets or liabilities.
Our level 1 financial instruments as of June 30, 2019 and December 31, 2018 consist of cash, accounts receivable, inventory, property and equipment, intangible assets and goodwill, and accounts payable. The carrying values of our financial instruments approximates their fair value.
Revenue Recognition
On January 10, 2017, the Company adopted ASC 606, Revenue from Contracts with Customers. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606.
The Company recognizes revenue from the sale of products and services in accordance with the following criteria:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations
Step 5: Recognize the revenue when the entity satisfies a performance obligation
The Company’s revenues accounted for under ASC 606 generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price.
The Company recognizes revenue for the amount of consideration expected to be collected from the customers, which includes gross shipping fees where applicable, and is net of sales taxes collected and remitted to government agencies and returns. The Company reserves for estimated returns based on historical trends in merchandise returns and reduces sales and merchandise costs accordingly.
Event Revenue
During the six months ended June 30, 2019 and 2018, the Company facilitated various social events, which included the rental of its premium event space that is currently being converted to a tap room and brewery, to generate income while developing its beverage formulations and pursuing its initial public offering. Event revenue is recognized at the point in time the services are performed, or events are held. Amounts paid in advance, such as advance deposits, are recorded as a deferred revenue liability until the goods or services are provided to the customer. The Company had no deferred revenue at June 30, 2019 or December 31, 2018.
Merchandise Revenue
The Company offers merchandise in the following core merchandise categories: beverages, clothing, and sundries. The majority of revenue from merchandise sales is recognized at the point of sale. Revenue generated through e-commerce or special orders is recognized upon shipment to the customer. For merchandise shipped directly to the customer, shipping and handling costs are expensed as incurred as fulfillment costs and included in merchandise costs in the consolidated statements of income.
F-26 |
During the three and six months ended June 30, 2019, the Company earned Event Revenue of $373,525 (2018 - $393,591) and $718,358 (2018 - $797,792), respectively, which was with one entity not related to the Company, and represented 97% (2018 - 93%) and 97% (2018 - 93%), respectively, of total revenues. The remaining revenue for the three and six months ended June 30, 2019 consisted of Merchandise Revenue of $13,122 (2018 - $28,270) and $24,058 (2018 - $59,515), respectively. The Company anticipates that as it continues to develop its specialty beverages and related business goals focusing on women’s tastes and preferences, that event sales will decrease and other dominant revenue streams, primarily its specialty beverage sales, will emerge.
Stock-Based Compensation
The Company records stock-based compensation expense for bonus and advisory services relative to the fair value of the awards on the grant date in accordance with ASC 718, Compensation - Stock Compensation (employees), and ASC 505-50, Equity-Based Payments to Non-Employees. The Company recognizes stock issued for advisory services over the requisite period of the service, which is usually the vesting period. The Company issued shares of common stock for services during the six months ended June 30, 2019 and 2018 (Note 10), but has not adopted any stock option plans.
Sales Taxes
The obligations to the appropriate tax authorities are included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities.
Advertising and Promotion
All costs associated with advertising and promoting products are expensed as incurred. These expenses were $301,276 and $760,811 for the three and six months ended June 30, 2019, respectively, and $166,371 and $202,540 for the three and six months ended June 30, 2018, respectively.
Income Taxes
The provision for income taxes is determined in accordance with the provisions of ASC 740, Accounting for Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all of the deferred tax assets will not be recognized.
For the six months ended June 30, 2019 and 2018, we did not have any interest and penalties or any significant unrecognized uncertain tax positions.
F-27 |
Income (Loss) Per Common Share
The Company accounts for earnings (loss) per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to convertible debt, stock options and warrants for each year. As of June 30, 2019 and December 31, 2018, there were no potentially dilutive debt or equity instruments issued or outstanding, with the exception of the 20,000,000 Preferred A shares which can be voluntarily converted to 200,000,000 shares of common stock.
Related Party Transactions
The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Recently Accounting Standards
We have reviewed all the recently adopted and recently-issued, but not yet effective, accounting pronouncements and do not believe any of these pronouncements will have a material impact on our financial statements.
Note 3 – Prepaid Expenses
As of June 30, 2019, and December 31, 2018, prepaid expenses consisted of amounts paid in advanced for the Company’s SHE Week to be held in 2020. Expenses include facility fees, hotel accommodations, and other event fees. Total prepayments for the SHE Week event were $105,330 and $32,025 at June 30, 2019 and December 31, 2018, respectively.
Note 4 – Deposits
Deposits consist of the following as of:
June 30, 2019 | December 31, 2018 | |||||||
Brewery equipment deposit | $ | 65,736 | $ | 65,736 | ||||
Lease security deposits | 16,367 | 16,367 | ||||||
Total deposits | $ | 82,103 | $ | 82,103 |
Note 5 – Property, Plant and Equipment
Property, plant and equipment consist of the following as of:
June 30, 2019 | December 31, 2018 | |||||||
Construction in progress | $ | 1,879,002 | $ | 1,475,073 | ||||
Machinery and equipment | 425,004 | 426,445 | ||||||
Buildings | 345,000 | - | ||||||
Land | 300,000 | 300,000 | ||||||
Vehicles | 126,535 | 73,042 | ||||||
Furniture and fixtures | 205,874 | 57,442 | ||||||
Total property, plant and equipment | 3,281,415 | 2,332,002 | ||||||
Less: accumulated depreciation | (179,364 | ) | (94,499 | ) | ||||
Net property, plant and equipment | $ | 3,102,051 | $ | 2,237,503 |
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Depreciation expense was $92,349 and $12,968 for the six months ended June 30, 2019 and 2018, respectively.
The Company leases equipment totaling $64,149 under a capital lease (see Note 9). The depreciation expense of the equipment under capital lease totaled $6,415 for the six months ended June 30, 2019 and 2018, and is included in depreciation expense.
Note 6 – Intangible Assets and Goodwill
Intangible assets and goodwill, net consist of the following as of:
June 30, 2019 | December 31, 2018 | |||||||
Product formulations | $ | 3,209,267 | $ | 3,209,267 | ||||
Goodwill | 7,175,000 | 1,500,000 | ||||||
Website development | 255,300 | 145,300 | ||||||
Patents and trademarks | 88,861 | 53,657 | ||||||
10,728,428 | 4,908,224 | |||||||
Less: accumulated amortization | (709,277 | ) | (524,566 | ) | ||||
Total intangible assets and goodwill assets, net | $ | 10,019,151 | $ | 4,383,658 |
Amortization expense was $184,711 and $71,469 for the six months ended June 30, 2019 and 2018.
Note 7 – Business Acquisitions
On February 1, 2019, the Company acquired 100% of the ownership interests in a company with no assets or liabilities from an unrelated entity for 110,000 shares of the Company’s common stock valued at $2.50 per share, or $275,000. In consideration of the acquisition, the Company allocated the entire purchase price to goodwill. As of June 30, 2019, no impairment was recorded on the goodwill.
On May 15, 2019, the Company acquired 90% of the ownership interests in a company with no assets or liabilities from an unrelated entity for 2,160,000 shares of the Company’s common stock valued at $2.50 per share, or $5,400,000. In consideration of the acquisition, the Company allocated the entire purchase price to goodwill. As of June 30, 2019, no impairment was recorded on the goodwill.
Note 8 – Line of Credit
In 2017, the Company entered into an accounts receivable line of credit (the “LOC”) with a financial institution. Payments are due monthly, and the LOC carries an interest rate of the LIBOR 1-month rate. The LOC is renewed annually and is set to expire in March 2020. No draws or repayments were made on the LOC during the six months ended June 30, 2019 or 2018. The balance of the LOC was $0 as of June 30, 2019 or December 31, 2018.
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Note 9 – Leases
The Company leases the majority of its commercial properties under non-cancelable operating lease agreements that expire from 2019 through 2022. The commercial property leases generally have an initial term ranging from 2-5 years with renewal options on certain leases. Payments on the operating leases range from $1,000 to $7,500 a month.
On June 7, 2017, the Company entered into a financing lease agreement with a financial institution for equipment. The total equipment value leased was $64,149, of which $62,782 was financed. The note calls for monthly payments of $1,367 and the financing agreement matures on June 30, 2022. The balance of the note was $39,229 and $47,431 as of June 30, 2019 and December 31, 2018, respectively. Total interest incurred and paid on the note was $1,248 and $2,495 during the three and six months ended June 30, 2019, respectively, and $1,510 and $3,091 during the three and six months ended June 30, 2018, respectively.
Effective January 10, 2019, the Company adopted ASC 842, Leases. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The Company does not recognize ROU assets and lease liabilities for leases with terms at inception of twelve months or less.
The components of lease expense and supplemental cash flow information related to leases for the period are as follows:
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||||
Lease Cost | ||||||||
Operating lease expense | $ | 25,500 | $ | 51,000 | ||||
Financing lease cost: | ||||||||
Amortization of right-of-use asset | 3,208 | 6,415 | ||||||
Interest on lease liability | 1,248 | 2,495 | ||||||
Total financing lease cost | 4,456 | 8,910 | ||||||
Total lease cost | $ | 29,956 | $ | 59,910 | ||||
Other Information | ||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash outflows from operating leases | $ | 28,953 | $ | 57,906 | ||||
Operating cash outflows from finance lease | $ | 1,248 | $ | 2,495 | ||||
Financing cash outflows from finance lease | $ | 2,893 | $ | 5,707 |
Operating Leases | ||||
Weighted average remaining lease term | 2 years | |||
Weighted average discount rate | 11% | |||
Financing Lease | ||||
Remaining lease term | 3 years | |||
Discount rate | 11% |
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The supplemental balance sheet information related to leases for the period is as follows:
At June 30, 2019 | ||||
Operating leases | ||||
Right-of-use assets | $ | 204,000 | ||
Operating lease liabilities - current portion | $ | 102,000 | ||
Operating lease liabilities - non-current portion | 102,000 | |||
Total operating lease liabilities | $ | 204,000 |
Maturities of the Company’s lease liabilities are as follows:
Year Ending | Operating Leases | Financing Lease | ||||||
2019 (remaining 6 months) | $ | 129,076 | $ | 8,203 | ||||
2020 | 82,405 | 16,405 | ||||||
2021 | 23,596 | 16,405 | ||||||
2022 | - | 6,835 | ||||||
Total lease payments | 235,077 | 47,848 | ||||||
Less: Imputed interest/present value discount | (31,077 | ) | (6,124 | ) | ||||
Present value of lease liabilities | 204,000 | 41,724 | ||||||
Less: current portion | (102,000 | ) | (12,403 | ) | ||||
Total noncurrent lease liabilities | $ | 102,000 | $ | 29,321 |
Operating lease expense was $35,374 and $70,748 during the three and six months ended June 30, 2018, respectively.
Note 10 – Stockholders’ Equity
Preferred Stock
The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001. The Company has designated 20,000,000 of the preferred shares as Series A and 5,000,000 shares as Series B. Each share of Series A preferred stock carries 10 votes and is convertible, at the discretion of the Company’s Board of Directors, to 10 shares of common stock. The Series B preferred shares shall have the preferences, limitations, conversion, voting and any relative rights as determined by the Board of Directors at the time of issuance of each share of Series B Preferred Stock.
In 2017, the Company issued 20,000,000 shares of preferred Series A stock as founders shares to the Company’s founding members of management pursuant to a recapitalization.
As of June 30 2019 and December 31, 2018, the Company had 20,000,000 shares of Series A preferred stock issued and outstanding, respectively. No shares of Series B preferred stock have been issued.
Common Stock
The Company is authorized to issue 400,000,000 shares of common stock with a par value of $0.001.
During the six months ended June 30, 2019 and 2018, the Company issued 2,525,780 and 2,908,026, respectively, shares of stock to investors at prices ranging from $1.25 to $5.00 per share for cash totaling $3,283,849 and $3,760,258, respectively.
During the six months ended June 30, 2019, the Company issued 320,000 shares of common stock at $1.08 per share for property valued at $345,000.
F-31 |
During the six months ended June 30, 2019, the Company acquired businesses in exchange for 2,270,000 shares of stock at $2.50 per share. The value of the businesses acquired was $5,675,000. See Note 7.
During the six months ended June 30, 2019 and 2018, the Company issued 1,700,000 and 1,900,000, respectively, shares of common stock for advisory services at $1.25 per share. As a result, the Company recognized an expense totaling $2,125,000 and $2,375,000, respectively.
As of June 30, 2019, and December 31, 2018, the Company had 21,258,712 and 14,442,932 shares of common stock issued and outstanding, respectively.
The Company’s founders contributed capital of $189,657 and $0 during the six months ended June 30, 2019 and 2018, respectively.
Note 11 – Related Party Transactions
As of June 30, 2019 and December 31, 2018, the Company was owed $269,880 and $25,000, respectively, in related party receivables from a company owned by the management of the Company.
The Company uses a building contractor for all its construction and building improvements. One of the Company’s major shareholders also owns one of the construction companies. During the six months ended June 30, 2019 and 2018, the Company incurred costs totaling $131,631 and $114,211, respectively, with this contractor, none of which is still owed at June 30, 2019 or December 31, 2018.
Note 12 – Subsequent Events
The Company evaluated subsequent events occurring through the date the financial statements were issued for recognition or disclosure in the financial statements issued and noted the following items:
July 24, 2019: The Company issued 50,000 shares of common stock at $2.50 per share for real estate valued at $125,000.
July 30, 2019: The Company acquired 100% issued and outstanding common stock of the Woman’s Football League Association from the Company’s majority shareholders. This was accounted for as a transfer of net assets at historical cost between entities under common control.
August 22, 2019: The Company issued 120,000 shares of common stock at $2.50 per share for real estate valued at $300,000.
September 11, 2019: The Company acquired 90% of the issued and outstanding common stock of Buildingit, LLC in exchange for 1,900,000 shares of Company common stock at $2.50 per share for total purchase price of $4,750,000.
On October 14, 2019: The Company entered into a service agreement for the Application build and development of SHEMeets.com, Piccup and Pink Cash for 300,000 shares of Company common stock.
The Company issued 2,052,227 shares of common stock for $2,565,283.75 at $1.25 per share for cash subsequent to June 30, 2019 to unrelated parties.
F-32 |
Dealer Prospectus Delivery Obligation
Until ___________, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART II — INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the expenses expected to be incurred in connection with the issuance and distribution of the securities being registered (also included in the Use of Proceeds table).
SEC Registration | $ | 43,000 | ||
Legal Fees and Expenses | 50,000 | |||
Accounting Fees* | 50,000 | |||
Miscellaneous* | 7,000 | |||
Total | $ | 150,000 |
* Estimated
The Issuer will pay all fees and expenses associated with this offering with the Selling Shareholders paying none of the expenses.
Item 14. Indemnification of Directors and Officers
Our bylaws contain provisions which require that the company indemnify its officers, directors, employees and agents, in substantially the same language as Title 7 of the WRS. Section 7 of the Company’s Articles of Incorporation and Article IX of our bylaws provides for the Company’s ability to indemnify its officers, directors, employees and agents, subject to the limitations provided in WRS, for expenses actually and reasonably incurred. No indemnification shall be made in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for gross negligence or misconduct in the performance of his duties.
The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer, director or employee may be entitled apart from the provisions of this section.
The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
Item 15. Recent Sales of Unregistered Securities
During the years ended December 31, 2018 and 2017 and subsequently through the date of this filing, we sold a total of 22,986,739 common shares to Two Thousand One Hundred Thirty-Two investors in subscriptions. The issuances of the shares to the investors were exempt from registration under Sections 4(2) and 4(6) of the Securities Act and Regulation D. The shares bear a restrictive transfer legend. This transaction (a) involved no general solicitation, (b) involved less than thirty-five non-accredited purchasers, and (c) relied on a detailed disclosure document to communicate to the investors all material facts about the issuer including an audited balance sheet and reviewed statements of income, changes in stockholders' equity and cash flows. Each purchaser was given the opportunity to ask questions of us. Thus, we believe that the offering was exempt from registration under Regulation D, Rule 506 of the Securities Act of 1933, as amended.
Shares for Cash | 11,776,739 | |||
Shares for Services | 6,700,000 | |||
Shares for Acquisitions | 4,170,000 | |||
Shares for Real Estate | 340,000 | |||
Total | 22,986,739 |
II-1 |
Item 16. Exhibits
*Included in Exhibit 5.1
Item 17. Undertakings
The undersigned hereby undertakes:
(1) to file, during any period in which offers, or sales are being made, a post-effective amendment to this Registration Statement to:
(i) | include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424 (b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | include any additional or changed material information on the plan of distribution. |
(2) that for determining liability under the Securities Act, to treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
(3) to file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
(4) that for determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) | Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; |
II-2 |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser. |
(5) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a directors, officers or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-3 |
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lancaster, CA on January 13, 2020.
SHE Beverage Company, Inc. | |||
By: | /s/ Lupe Rose | ||
Lupe Rose, President, Director | |||
Principal Executive Officer | |||
By: | /s/ Sonja Shelby | ||
Sonja Shelby, Vice President, Treasurer, Director, Principal Financial Officer | |||
By: | /s/ Katherine Dirden | ||
Katherine Dirden, Secretary, Director | |||
By: | /s/ George Mathew | ||
George Mathew, Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated, on January 13, 2020.
SHE Beverage Company, Inc. |
By: | /s/ Lupe Rose |
Lupe Rose, President, Director | ||
Principal Executive Officer |
By: | /s/ Sonja Shelby |
Sonja Shelby, Vice President, Treasurer, Director, Principal Financial Officer |
By: | /s/ Katherine Dirden |
Katherine Dirden, Secretary, Director |
By: | /s/ George Mathew |
George Mathew, Chief Financial Officer |
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Exhibit 3.1
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Exhibit 3.2
AMENDED BY-LAWS OF
SHE BEVERAGE COMPANY, INC.
ARTICLE I - OFFICES
The principal offices of the Corporation shall be located at 42601 8th Street, Suite 108, Lancaster, CA 93534 and the office address may be changed from time to time by the Board of Directors. The Corporation may also maintain offices at such other places within or without the United States as the Board of Directors may, from time to time, determine.
ARTICLE II - MEETINGS OF STOCKHOLDERS
SECTION 1 - ANNUAL MEETINGS:
The annual meeting of the stockholders of the corporation shall be held within six (6) months after the close of the fiscal year of the Corporation, which is established as the 31st of December of each year, for the purposes of electing directors, and transacting such other business as may properly come before the meeting.
SECTION 2 - SPECIAL MEETINGS:
Special meetings of the stockholders may be called at any time by the Board of Directors or by the President and shall be called by the President or the Secretary at the written request of the holders of twenty-five percent (25%) of the shares then outstanding and entitled to vote thereat, or as otherwise required by law.
SECTION 3 - PLACE OF MEETINGS:
All meetings of stockholders shall be held at the principal office of the Corporation, or at such other places as shall be designated in the notices or waivers of notice of such meetings.
SECTION 4 - NOTICE OF MEETINGS:
(a) Except as otherwise provided by statute, written notice of each meeting of stockholders, whether annual or special, stating the time when and the place where it is to be held, shall be served either personally or by mail, not less than ten (10) or more than sixty (60) days before the meeting, upon each stockholder of record entitled to vote at such meeting, and to any other stockholder to whom the giving of notice may be required by law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called, and shall indicate that it is being issued by, or at the direction of, the person or persons calling the meeting. If at any meeting, action is proposed to be taken that would, if taken, entitle stockholders to receive payment for their shares pursuant to statute, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, such notice shall be directed to each such stockholder at the address as it appears on the transfer agency records or the records of the stockholders of the Corporation, unless he shall have previously filed with the secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request.
(b) Notice of any meeting need not be given to any person who may become a stockholder of record after the mailing of such notice and prior to the meeting, or to any stockholder who attends such meeting, in person or by proxy, or submits a signed waiver of notice either before or after such a meeting. Notice of any adjourned meeting of stockholders need not be given, unless otherwise required by statute.
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SECTION 5 - QUORUM:
(a) Except as otherwise provided herein, or by statute, or in the Articles of Incorporation (such Articles, and any amendments thereof being hereinafter collectively referred to as the "Articles of Incorporation", at all meetings of stockholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of stockholders holding of record fifty-one percent (51%) of the total number of shares of the Corporation then issued and outstanding and entitled to vote, shall be necessary and sufficient to constitute a quorum for the transaction of any business. The withdrawal of any stockholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting.
(b) Despite the absence of a quorum at any annual or special meeting of stockholders, the stockholders, by a majority of the votes cast by the holders of shares entitled to vote thereat, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted at the meeting as originally called if a quorum had been present.
SECTION 6 - VOTING:
(a) Except as otherwise provided by statute or by the Articles of Incorporation, any corporate action, other than the election of directors, to be taken by vote of the stockholders, shall be authorized by a majority of votes cast at a meeting of stockholders by the holders of shares entitled to vote thereat.
(b) Except as otherwise provided by statute or by the Articles of Incorporation, at each meeting of stockholders, each holder of record of stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of stock registered in his name on the books of the Corporation.
(c) Each stockholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy; provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the stockholder himself or by his attorney-in-fact thereunto duly authorized in writing. No Proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the minutes of the meeting.
(d) Any action, except election of directors, which may be taken by a vote of stockholders at a meeting, may be taken without a meeting if authorized by a written consent of shareholders holding at least a majority of the voting power; provided that if a greater proportion of voting power is required by such action at a meeting, then such greater proportion of written consent shall be required.
ARTICLE III - BOARD OF DIRECTORS
SECTION 1 - NUMBER, ELECTION AND TERM OF OFFICE:
(a) The number of directors of the corporation, shall not be less than one (1) nor more than nine (9), unless and until otherwise, determined by vote of a majority of the entire Board of Directors. The number of Directors shall not be less than three (3), unless all of the outstanding shares of stock are owned beneficially and of record by less than three (3) stockholders, in which event the number of' directors shall not be less than the number of stockholders or the minimum permitted by statute.
(b) Except as may be otherwise provided herein or in the Articles of Incorporation by way of cumulative voting rights the members of the Board of Directors of the Corporation, who need not be stockholders, shall be elected by a majority of the votes cast at a meeting of stockholders, by the holders of shares of stock present in person or by proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the stockholders next succeeding his election, and until his successor is elected and qualified; or until his prior death, resignation or removal.
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SECTION 2 - DUTIES AND POWERS:
The Board of Directors shall be responsible for the control and management of the affairs, property .and interests of' the Corporation and may exercise all powers of the Corporation, except as are in the Articles of Incorporation or by statute expressly conferred upon or reserved to the stockholders.
SECTION 3 - ANNUAL AND REGULAR MEETINGS; NOTICE:
(a) The regular annual meeting of the Board of Directors shall be held immediately following the annual meeting of the stockholders at the place of such annual meeting of stockholders.
(b) The Board of Directors, from time to time, may provide by resolution for the holding of other regular meetings of the Board of Directors, and may fix the time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be required to be given and, if given, need not specify the purpose of the meeting; provided, however, that in case the Board of Directors shall fix or change place of any regular meeting, notice of such action shall be given to each director who shall not have been present at the meeting at which such change was made within the time limit, and in the manner set forth in Paragraph (b) Section 4 of this Article III, with respect to special meetings, unless such notice shall be waived in the manner set forth in Paragraph(c) of such Section 4.
SECTION 4 - SPECIAL MEETING; NOTICE:
(a) Special meetings of the Board of Directors shall be held whenever called by the President or by one of the directors, at such time and place as may be specified in the respective notices or waivers of notice thereof.
(b) Except as otherwise required by statute, notices of special meetings shall be mailed directly to each director, addressed to him at his residence or usual place of business, at least four (4) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegram, radio or cable, or shall be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. A notice or waiver of notice, except as required by Section 8 of this Article III, need not specify the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to any director who shall attend such meeting without protesting prior thereto or at its commencement, the lack of notice to him or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given.
SECTION 5 - CHAIRMAN:
At all meetings of the Board of Directors, the Chairman of the Board, if any and if present, shall preside. If there shall be no Chairman, or he/she shall be absent, then the Vice Chairman shall preside, and in his/her absence, a Chairman chosen by the directors shall preside.
SECTION 6 - QUORUM AND ADJOURNMENTS:
(a) At all meetings of the Board of Directors, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Articles of Incorporation, or by these Bylaws.
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(b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum may adjourn the same from time to time without notice, until a quorum shall be present.
SECTION 7 - MANNER OF ACTING:
(a) At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold.
(b) Except as otherwise provided by statute, by the Articles of Incorporation, or by these Bylaws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors.
(c) Unless otherwise required by amendment to the Articles of Incorporation or by statute, any action required or permitted to be taken at any meeting of the Board of Directors or any Committee thereof may be taken without a meeting if a written consent thereto is signed by all the members of the Board or Committee. Such written consent shall be filed with the minutes of the proceedings of the Board or Committee.
(d) Unless otherwise prohibited by Amendments to the Articles of Incorporation or by statute, members of the Board of Directors or of any Committee of the Board of Directors may participate in a meeting of such Board or Committee by means of a conference telephone network or a similar communications method by which all persons participating in the meeting can hear each other. Such participation is constituted presence of all of the participating persons at such meeting, and each person participating in the meeting shall sign the minutes thereof, which may be signed in counterparts.
SECTION 8 - VACANCIES:
Any vacancy in the Board of Directors, occurring by reason of an increase in the number of directors, or by reason of the death, resignation, disqualification, removal (unless the vacancy created by the removal of a director by the stockholders shall be filled by the stockholders at the meeting at which the removal was effected) or inability to act of any director, or otherwise, shall be filled for the unexpired portion of the term by a majority vote of the remaining directors, though less than a quorum, at any regular meeting or special meeting of the Board of Directors called for that purpose.
SECTION 9 - RESIGNATION:
Any director may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice such resignation shall take effect upon receipt thereof by the Board of Directors or such officer, and the acceptance of such resignation shall not be necessary to make it effective;
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SECTION 10 - REMOVAL:
Any director may be removed with or without cause at any time by the affirmative vote of stockholders holding of record in the aggregate at least a majority of the outstanding shares of stock of the Corporation at a special meeting of the stockholders called for that purpose and may be removed for cause by action of the board.
SECTION 11 - SALARY:
No stated salary shall be paid to directors, as such for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
SECTION 12 - CONTRACTS:
(a) No contract or other transaction between this Corporation and any other corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that one or more directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other corporations, provided that such facts are disclosed or made known to the Board of Directors, prior to their authorizing such transaction.
(b) Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this Corporation, and no directors shall be liable in any way by reason of' such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors prior to their authorization of such contract or transaction, and provided that the Board of Directors shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such Director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section shall not be construed to impair, invalidate or in any way affect any contract or other transactions which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto.
SECTION 13 - COMMITTEES:
The Board of Directors, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive committee and such other committees, and alternate members thereof, as they may deem desirable, with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
SECTION 1 - NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE:
(a) The officers of the Corporation shall consist of a President, a Treasurer and a Secretary, and such other officers, including a Chairman of the Board of Directors, and one or more Vice Presidents, as the Board of Directors may from time to time deem advisable. Any officer other than the Chairman or Vice Chairman of the Board of Directors may be, but is not required to be, a director of the Corporation. Any two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of stockholders.
(c) Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his election, and until his successor shall have been elected and qualified or until his death, resignation or removal.
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SECTION 2 - RESIGNATION:
Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective.
SECTION 3 - REMOVAL:
Any officer may be removed, either with or without cause, and a successor elected by a majority vote of the Board of Directors at any time.
SECTION 4 - VACANCIES:
A vacancy in any office by reason of death, resignation, inability to act, disqualification or any other cause, may at any times be filled for the unexpired portion of the term by a majority vote of the Board of Directors.
SECTION 5 - DUTIES OF OFFICERS:
Officers of the Corporation shall, unless otherwise provided by the Board of Directors, each have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be set forth in these Bylaws or may from time to time be specifically conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the Corporation.
SECTION 6 - SURETIES AND BONDS:
In case the Board of Directors shall so require any officer, employee or agent of the Corporation shall execute to the Corporation a bond in such sum and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence for the accounting for all property, funds or securities of the Corporation which may come into his hands.
SECTION 7 - SHARES OF STOCK OF OTHER CORPORATIONS:
Whenever the Corporation is the holder of shares of stock of any other corporation, any right or power; of the Corporation as such stockholder (including the attendance, acting and voting at stockholders= meetings an' execution of waivers consents, proxies or other instruments) may be exercised on behalf of the Corporation by the President, any Vice President or such other person as the Board of Directors may authorize.
ARTICLE V - SHARES OF STOCK
SECTION 1 – CERTIFICATES OF STOCK:
(a) The certificates representing shares of the Corporation's stock shall be in such form as shall be adopted by the Board of Directors and shall be numbered and registered in the order issued. The certificates shall bear the following: the Corporate Seal, the holder’s name, the number of shares of stock and the signatures of: (1) the Chairman of the Board, the President or a Vice President and (2) the Secretary, Treasurer, any Assistant Secretary or Assistant Treasurer.
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(b) No certificate representing shares of stock shall be issued until the full amount of consideration therefore has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the issuance of certificates for fractions of a share of stock which shall entitle the holder to exercise voting rights, receive dividends and participate in liquidating distributions, in proportion to the fractional holdings; or it may authorize the payment in cash of the fair value of fractions of a share of stock as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance, subject to such conditions as may be permitted by law, of scrip in registered or bearer form over the signature of an officer or agent of the Corporation, exchangeable as therein provided for full shares of stock, but such scrip shall not entitle the holder to any rights of a stockholder, except as therein provided.
(d) Shares may be held as a “journal entry” at the Company’s Transfer Agent and transferrable or deliverable in either certificate form or electronic delivery at the sole discretion of the shareholder.
SECTION. 2 - LOST OR DESTROYED CERTIFICATES:
The holder of any certificate representing shares of stock of the Corporation shall immediately notify the Corporation of any loss or destruction of the certificate representing the same. The Corporation may issue a new certificate in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors in its discretion may require, the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or his legal representative, to give the Corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board, to indemnify the Corporation against any claims, loss, liability or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence or bond when, in the judgment of the Board of Directors, it is proper to do so.
SECTION 3 - TRANSFER OF SHARES:
(a) Transfer of shares of stock of the Corporation shall be made on the stock ledger of the Corporation only by the holder of record thereof, in person or by his duly authorized attorney, upon surrender for cancellation of the certificate or certificates representing such shares of stock with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, with such proof of the authenticity of the signature and of authority to transfer and of payment of taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in, such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law.
SECTION 4 - RECORD DATE:
In lieu of closing the stock ledger of the Corporation, the Board of Directors may fix, in advance, a date not exceeding sixty (60) days, nor less than ten (10) days, as the-record date for the determination of stockholders entitled to receive notice of, or to vote at, any meeting of stockholders, or to consent to any proposal without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividends or allotment of any rights, or for the purpose of any other action. If no record date is fixed, the record date for the determination of stockholders entitled to notice of, or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which the notice is given, or if no notice is given, the day preceding the day on which the meeting is held. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of stockholders of record entitled to notice of, or to vote at, any meeting of stockholders has been made as provided for herein, such determination shall apply to any adjournment thereof, unless the directors fix a new record date for the adjourned meeting.
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ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any funds available therefor, as often, in such amount, and at such time or times as the Board of Directors may determine
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be January 1 to December 31 and may be changed by the Board of Directors from time to time subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal shall be in such form as shall be approved from time to time by the Board of Directors.
ARTICLE IX - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or interstate representative is or was a director, officer or employee of the Corporation or of any corporation in which he served as such at the request of the Corporation shall be indemnified by the Corporation against the reasonable expenses, including attorney’s fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceeding, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for gross negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer, director or employee may be entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
ARTICLE X - AMENDMENTS
SECTION 1 - BY STOCKHOLDERS:
All by-laws of the Corporation shall be subject to alteration or repeal, and new by laws may be made, by the affirmative vote of stockholders holding of record, in the aggregate, at least a majority of the outstanding shares of stock entitled to vote in the election of directors at any annual or special meeting of stockholders, provided that the notice -or-waiver of notice of such meeting shall have summarized or set forth in full therein, the proposed amendment.
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SECTION 2 - BY DIRECTORS:
The Board of Directors shall have power to make, adopt, alter, amend and repeal, from time to time, bylaws of the Corporation, provided, however, that the stockholders entitled to vote with respect thereto as in this Article X above-provided may alter, amend or repeal bylaws made by the Board of Directors, except that the Board of Directors shall have no power to change the quorum for meetings of stockholders or of the Board of Directors or to change any provisions of the bylaws with respect to the removal of directors or the filling of vacancies in the Board resulting from the removal by the stockholders. If any bylaw regulating an impending election of directors is adopted, amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting of stockholders for the election of Directors, the bylaws so adopted, amended or repealed, together with a concise statement of the changes made.
CERTIFICATE OF THE BOARD OF DIRECTORS
This is to certify that we are the duly elected, qualified and acting Board of Director members of SHE Beverage Company, Inc. and that the foregoing amended By-Laws of the Company constitute a true copy and were hereby duly adopted as the By-Laws of the corporation.
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Exhibit 3.3
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Exhibit 3.4
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
SHE BEVERAGE COMPANY, INC.
1. | Name of Company: |
She Beverage Company, Inc.
2. | Resident Agent: |
The resident agent of the Company is: Lupe Rose
42601 8th Street, Suite 108
Lancaster, CA 93534
3. | Authorized Shares: |
The aggregate number of shares which the corporation shall have authority to issue shall consist of 400,000,000 shares of Common Stock and 25,000,000 shares of Preferred Stock, each having a $0.001 par value. The Common Stock and Preferred Stock of the Company may be issued from time to time without prior approval by the stockholders. The Common Stock and Preferred Stock may be issued for such consideration as may be fixed from time to time by the Board of Directors. The Board of Directors may issue such shares of Common Stock and Preferred Stock in one or more series, with such voting powers, designations, preferences and rights or qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions.
Of the 25,000,000 authorized shares of Preferred Stock, 20,000,000 are designated “Series A Preferred Stock.” These shares shall have the following preferences, limitations and relative rights:
(i) Dividends: The holders of shares of the Series A Preferred Stock shall be entitled to participate in dividends and no such dividend shall be paid, or cumulate, with respect to the Series A Preferred Stock until such time as determined solely in the reasonable discretion of the Board of Directors.
(ii) No Liquidation Preference: In the event of any liquidation, dissolution, or winding up of this corporation, either voluntarily or involuntarily, the holders of Series A Preferred Stock shall be entitled to receive distribution by reason of their ownership thereof.
(iii) | Conversion: |
(A) Conversion Rights. The Board of Directors of the corporation, using its reasonable discretion, shall determine, either quarterly or annually at its discretion, the mechanism for conversion and shall promptly give notice (the “Notice”) to the then current holders of the Series A Preferred Stock. Each such notice shall be dated by the Board of Directors as of the date it is actually sent to the holders of the Series A Preferred Stock. Each share of Series A Preferred Stock may be converted into ten (10) shares of Common Stock as fully paid and non-assessable Common Stock.
In the event of any conversion of Series A Preferred Stock under this subsection, the converting holder shall be entitled to receive any dividends which may have been declared but have not been paid with respect to the shares of Series A Preferred Stock so converted.
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(B) Voluntary Conversion Upon Change in Control. In the event that the Board of Directors or the shareholders of the corporation approves any transaction that will result in a change in control of the corporation (as herein defined), the Board of Directors shall provide each of the holders of the Series A Preferred Stock with at least thirty (30) days advance written notice of the consummation of such transaction. Such notice shall contain all reasonably material information required for a Series A Preferred Stock holder to make an assessment of the merits of the proposed transaction and the advisability of converting. During the period preceding the consummation of the transaction, each holder of Series A Preferred Stock shall be entitled to notify the corporation in writing that the holder desires to convert all or any specified portion of the holder’s shares of the Series A Preferred Stock into fully paid and non- assessable shares of Common Stock on the basis of four shares of Common Stock for each share of Series A Preferred Stock so converted with such conversion being effective the day of the consummation of the applicable change in control such that the converting Series A Preferred Stock holders shall be treated as a Common Stock holder for the purposes of the transaction. For purposes hereof, a “change in control” shall be deemed to occur if such is declared by the Board (employing reasonable discretion if the Board determines to so declare) or a friendly or hostile takeover offer is made or persons, acting in concert or owning directly or indirectly, acquire more than twenty percent (20%) of the voting control of the corporation (or sufficient to elect the board) without the consent of a majority of the Series A Preferred Stock holders.
(C) Mechanics of Conversion. Before any holder of Series A Preferred Stock shall be entitled to receive a certificate(s) for shares of Common Stock representing the Series A Preferred Stock converted, such holder shall surrender the certificate(s) representing the Series A Preferred Stock so converted, duly endorsed, at the principal corporate office of this corporation (or as otherwise directed in any notice), and shall give written notice of the name(s) in which the certificate(s) for shares of Common Stock are to be issued. The corporation shall, promptly thereafter, issue and deliver to such holder of Series A Preferred Stock, or to the nominee(s) of such holder, a certificate(s) for the number of shares of Common Stock to which the holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made on the date of the applicable Notice or as of the date of the consummation of the applicable change in control transaction, and the person(s) entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of such date.
(D) Adjustment. In the event that the number or kind of shares of Common Stock outstanding is changed by reason of stock dividend, stock split, recapitalization, merger or reorganization, the conversion ratio and/or the securities to be received upon conversion set forth in above shall be appropriately adjusted by the Board of Directors.
(E) No Fractional Shares. No fractional shares of Series A Preferred Stock shall be convertible and no fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares of Common Stock which would otherwise be issuable upon conversion, the corporation shall pay t the holder cash equal to the product of such fraction multiplied by the then current fair market value of one share of Common Stock, computed to the nearest whole cent. The then current fair market value of such shares shall be determined in good faith by the Board of Directors with reference to the public trading price, if any, of such Common Stock.
(F) Reservation of Stock Issuable Upon Conversion. This corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of Common Stock such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock. If at any time the number of authorized but unissued shares of Common Stock are insufficient to effect the conversion of all outstanding shares of Series A Preferred Stock, this corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including the corporation’s using its best efforts to obtain the approval of the shareholders to such increase, if required.
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(G) Notices. Any notices by the provisions of this section to be given to the corporation or to the holders of shares of Series A Preferred Stock shall be deemed given if deposited in the United States or Canadian mail, postage prepaid, and addressed to the corporation or to the holder of record at his address on the books of the corporation.
(H) Taxes. The holders of record of the Series A Preferred Stock shall pay any and all documentary, stamp, or other transactional taxes attributable to the issuance and delivery of shares of Common Stock or this corporation upon conversion of any shares of the Series A Preferred Stock.
(I) Voting Rights. Each shareholder of Series A Preferred Stock of record shall have ten (10) votes for each share of Series A Preferred Stock standing in his name in the books of the corporation. Cumulative voting shall not be permitted in the election of directors or otherwise.
Of the 25,000,000 authorized shares of Preferred Stock, 5,000,000 are designated “Series B Preferred Stock.” These shares shall have the preferences, limitations, conversion, voting and any relative rights as determined by the Board of Directors at the time of issuance of each share of Series B Preferred Stock.
4. | Board of Directors: |
The Company shall initially have three (3) directors who shall be Lupe Rose, Sonja Shelby and Katherine Dirden, whose common address is 42601 8th Street, Suite 108, Lancaster, CA 93534. These individuals shall serve as directors until their successor or successors have been elected and qualified. The number of directors may be increased or decreased by a duly adopted amendment to the By-Laws of the Corporation.
5. | Preemptive Rights and Assessment of Shares: |
Holders of Common Stock or Preferred Stock of the corporation shall not have any preference, preemptive right or right of subscription to acquire shares of the corporation authorized, issued, or sold, or to be authorized, issued or sold, or to any obligations or shares authorized or issued or to be authorized or issued, and convertible into shares of the corporation, nor to any right of subscription thereto, other than to the extent, if any, the Board of Directors in its sole discretion, may determine from time to time.
The Common Stock and Preferred Stock of the Corporation, after the amount of the subscription price has been fully paid in, in money, property or services, as the directors shall determine, shall not be subject to assessment to pays the debts of the corporation, nor for any other purpose, and no Common Stock issued as fully paid shall ever be assessable or assessed, and the Articles of Incorporation shall not be amended to provide for such assessment.
6. | Directors’ and Officers’ Liability |
A director or officer of the corporation shall not be personally liable to this corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, but this Article shall not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law or (ii) the unlawful payment of dividends. Any repeal or modification of this Article by stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification.
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7. | Indemnity |
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys’ fees, judgments, fines, and amounts paid or to be paid in a settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.
Without limiting the application of the foregoing, the Board of Directors may adopt By-Laws from time to time without respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the corporation to purchase or maintain insurance on behalf of any person who is or was a director or officer
8. | Amendments |
Subject at all times to the express provisions of Section 5 on the Assessment of Shares, this corporation reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation or its By-Laws, in the manner now or hereafter prescribed by statute or the Articles of Incorporation or said By-Laws, and all rights conferred upon shareholders are granted subject to this reservation.
9. | Power of Directors |
In furtherance, and not in limitation of those powers conferred by statute, the Board of Directors is expressly authorized:
(a) Subject to the By-Laws, if any, adopted by the shareholders, to make, alter or repeal the By- Laws of the corporation;
(b) To authorize and caused to be executed mortgages and liens, with or without limitations as to amount, upon the real and personal property of the corporation;
(c) To authorize the guaranty by the corporation of the securities, evidences of indebtedness and obligations of other persons, corporations or business entities;
(d) To set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve;
(e) By resolution adopted by the majority of the whole board, to designate one or more committees to consist of one or more directors of the of the corporation, which, to the extent provided on the resolution or in the By-Laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the affairs of the corporation, and may authorize the seal of the corporation to be fixed to all papers which may require it. Such committee or committees shall have name and names as may be stated in the By-Laws of the corporation or as may be determined from time to time by resolution adopted by the Board of Directors.
All the corporate powers of the corporation shall be exercised by the Board of Directors except as otherwise herein or in the By-Laws or by law.
IN WITNESS WHEREOF, I hereunder set my hand this 30th day of December 2019, hereby declaring and certifying that the facts stated hereinabove are true.
By:
Lupe Rose, as President,
She Beverage Company, Inc.
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Exhibit 5.1
EAD LAW GROUP, LLC
8275 S. Eastern, Suite 200 Las Vegas, NV 89123 (702)724-2636
ead@eadlawgroup.com
January 13, 2020
Board of Directors
SHE Beverage Company, Inc. 42601 8th Street West, Suite 108
Lancaster CA 93534
Re: | Registration Statement on Form S-1 for SHE Beverage Company, Inc., a California Corporation (the "Company") |
Dear Ladies and Gentlemen:
This opinion is submitted pursuant to the applicable rules of the Securities and Exchange Commission with respect to the registration of 10,000,000 shares for public sale of the Company's common stock, $.001 par value, to be sold by the issuer at $15.00 per share and 6,835,967 common shares par value $0.001 to be sold by selling shareholders at $15.00 per share.
In connection therewith, I have examined and relied upon original, certified, conformed, Photostat or other copies of the following documents:
i. | The Certificate of Incorporation of the Company; |
ii. | The Registration Statement and the Exhibits thereto; and |
iii. | Such other documents and matters of law, as I have deemed necessary for the expression of the opinion herein contained. |
In all such examinations, I have assumed the genuineness of all signatures on original documents, and the conformity to the originals or certified documents of all copies submitted to me as conformed, Photostat or other copies. In passing upon certain corporate records and documents of the Company, I have necessarily assumed the correctness and completeness of the statements made or included therein by the Company, and I express no opinion thereon. As to the various questions of fact material to this opinion, I have relied, to the extent I deemed reasonably appropriate, upon representations or certificates of officers or directors of the Company and upon documents, records and instruments furnished to me by the Company, without verification except where such verification was readily ascertainable.
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Re: SHE Beverage Company, Inc.
January 13, 2020
Page 2
Based on the foregoing, I am of the opinion that the shares to be sold by the issuer will upon the effectiveness of the registration and the issuance of the shares be duly and validly issued, duly authorized and fully paid and non-assessable and that the shares held by the selling shareholders are duly and validly issued, duly authorized and fully paid and non-assessable.
This opinion is limited to the laws of the State of California and federal law as in effect on the date of the effectiveness of the registration statement, exclusive of state securities and blue-sky laws, rules and regulations, and to all facts as they presently exist.
I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my name under the caption "Interests of Named Experts and Counsel " in the prospectus comprising part of the Registration Statement.
Sincerely yours,
EAD Law Group, LLC
Elaine Dowling, Esq.
ACQUISITION AND STOCK EXCHANGE AGREEMENT
THIS ACQUISITION AND STOCK EXCHANGE AGREEMENT (the “Agreement”) made this 1st day of October, 2018 by and between, SHE Beverage Company, Inc., a California corporation, with offices located at 42601 8th Street West, Suite 108, Lancaster, CA 93534 (“SHE”) and Mink Bath Bombs, a sole proprietorship, with offices located at 25548 Fountain Glen court #108, Stevenson Ranch, 91381, (“BATH” or the “Company”) on behalf of its owners, both parties hereinafter referred to individually as the “Party” or collectively as the “Parties.”
BACKGROUND:
A. The Boards of Directors of SHE and ownership of BATH have determined that an acquisition of 100% of the outstanding ownership interests of BATH by SHE through an exchange upon the terms and subject to the conditions set forth in this Agreement, would be fair and in the best interests of SHE’s stockholders and BATH’s interest holders, and the Boards of Directors of SHE and BATH have approved such Exchange, pursuant to which all of the right, title and interest in and to 100% of the ownership interests in BATH (the “Shares”) will be exchanged for the right to receive 200,000 shares of common stock of SHE (the “Exchange Shares”).
B. SHE and BATH desire to make certain representations, warranties, covenants and agreements in connection with the Exchange and to prescribe various conditions to the Exchange.
C. For federal income tax purposes, the Parties intend that the Exchange shall qualify as reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the Parties agree as follows:
ARTICLE I
THE EXCHANGE
1.01 Exchange. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the California Revised Statutes (“California Statutes”), at the Closing (as hereinafter defined), the Parties shall do the following:
(a) The interest holders of BATH will sell, convey, assign, and transfer the ownership interests to SHE by delivering to SHE executed and transferable certificates. The ownership interests transferred to SHE at the Closing shall constitute 100% of all issued and outstanding ownership interests in the Company.
(b) As consideration for its acquisition of the ownership interests, SHE shall issue the Exchange Shares to BATH by delivering a share certificate to BATH evidencing the Exchange Shares (the “Exchange Share Certificates”).
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(c) For federal income tax purposes, the Exchange is intended to constitute a “reorganization” within the meaning of Section 368 of the Code, and the Parties shall report the transactions contemplated by this Agreement consistent with such intent and shall take no position in any Tax filing or legal proceeding inconsistent therewith. The Parties to this Agreement hereby adopt this Agreement as a “Plan of Reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. None of SHE or BATH has taken or failed to take, and after the Effective Time (as defined below), SHE shall not take or fail to take, any action which reasonably could be expected to cause the Exchange to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
1.02 Effect of the Exchange. The Exchange shall have the effects set forth in the applicable provisions of the California Statutes.
1.03 Closing. Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Article VI and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing of the Exchange (the “Closing”) will take place at 10:00 a.m. U.S. Pacific Standard Time on the business day upon satisfaction of the conditions set forth in Article V (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article V) (the “Closing Date”), at the offices of EAD Law Group, LLC, unless another date, time or place is agreed to in writing by the Parties hereto.
1.04 Effective Time of Exchange. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article V, the Parties shall make all filings or recordings required under California Statutes. The Exchange shall become effective at such time as is permissible in accordance with California Statutes (the time the Exchange becomes effective being the “Effective Time”). SHE and the Company shall use reasonable efforts to have the Closing Date and the Effective Time to be the same day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of the Company. As set forth in the Company disclosure schedule delivered by BATH to SHE at the time of execution of this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to SHE as follows:
(a) Organization, Standing and Power. The Company is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect (as defined in Section 8.02).
(b) Subsidiaries. The Company does not own directly or indirectly, any equity or other shares in any company, corporation, partnership, joint venture or otherwise.
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(c) Ownership Interests. The Ownership Interests represent 100% of the issued and outstanding ownership interests of the Company. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company. There are no rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional ownership interests of the Company or obligating the Company to issue, grant, extend or enter into any such right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of the ownership interests of the Company.
(d) Authority; Non-contravention. The Company has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and when delivered by the Company shall constitute a valid and binding obligation of the Company, enforceable against the Company and the selling shareholders, as applicable, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of the Company under, (i) the Company’s articles of incorporation or bylaws, if any, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to the Company, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.
(e) Governmental Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any United States court, administrative agency or commission, or other federal, state or local government or other governmental authority, agency, domestic or foreign (a “Governmental Entity”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act of 1933, as amended (the “Securities Act”) or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).
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(f) Absence of Certain Changes or Events. Except as set forth on Schedule 2.01(g), since the Company Balance Sheet Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:
(i) material adverse change with respect to the Company;
(ii) event which, if it had taken place following the execution of this Agreement, would not have been permitted by Section 3.01 without prior consent of SHE;
(iii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices or as disclosed to SHE in writing;
(v) creation or other incurrence by the Company of any lien on any asset other than in the ordinary course consistent with past practices;
(vi) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;
(vii) labor dispute, other than routine, individual grievances, or, to the knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;
(viii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;
(ix) write-offs or write-downs of any assets of the Company;
(x) creation, termination or amendment of, or waiver of any right under, any material contract of the Company;
(xi) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on the Company;
(xii) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; or
(xiii) agreement or commitment to do any of the foregoing.
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(g) Certain Fees. Except as set forth on Schedule 2.01(h), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(h) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect.
(ii) The Company is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to Company.
(iii) The conduct of the business of the Company complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(i) Benefit Plans. The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, “Benefit Plan” shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, ownership plan with respect to any ownership interest, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, severance pay, termination, salary continuation, or employee assistance plan.
(j) Tax Returns and Tax Payments.
(i) The Company has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by the Company has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). The Company is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to the Company by a taxing authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of the Company did not, as of the Company Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the Company Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of the Company and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of the Company.
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(ii) No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, no audit of any Tax Return of the Company is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company and is currently in effect. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(iii) As used herein, “Taxes” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “Tax Return” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(k) Environmental Matters. The Company is in compliance with all Environmental Laws in all material respects. The Company has not received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations. The Company holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on the Company. The Company is in compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by the Company or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to the Company. The Company has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to the Company. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on the Company. There are no past, pending or threatened claims under Environmental Laws against the Company and Company is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against the Company pursuant to Environmental Laws. “Environmental Laws” means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to contamination, pollution or protection of human health or the environment, and similar state laws. “Hazardous Material” means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, byproducts and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.
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(l) Material Contract Defaults. The Company is not, nor has not received any notice or has any knowledge that any other party is, in default in any respect under any Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which the Company is a party (i) with expected receipts or expenditures in excess of $50,000, (ii) requiring the Company to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $50,000 or more, including guarantees of such indebtedness, or (v) which, if breached by the Company in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from the Company or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Accounts Receivable. All of the accounts receivable of the Company that are reflected on the Company Financial Statements or the accounting records of the Company as of the Closing (collectively, the “Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.
(n) Properties. The Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by the Company or acquired after the date thereof which are, individually or in the aggregate, material to the Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases of which the Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
(o) Intellectual Property.
(i) As used in this Agreement, the term “Trademarks” means trademarks, service marks, trade names, internet domain names, designs, slogans, and general intangibles of like nature; the term “Trade Secrets” means technology; trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies; the term “Intellectual Property” means patents, copyrights, Trademarks, applications for any of the foregoing, and Trade Secrets; the term “Company License Agreements” means any license agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for off-the-shelf products that are generally available for less than $25,000), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound; and the term “Software” means any and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code.
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(ii) The Company owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its respective businesses as now being conducted. To the knowledge of the Company, none of the Company’s Intellectual Property or Company License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against the Company or its successors.
(p) Undisclosed Liabilities. The Company has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Company Financial Statements incurred in the ordinary course of business or such liabilities or obligations disclosed in Schedule 2.01(g).
(q) Full Disclosure. All of the representations and warranties made by the Company in this Agreement, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to SHE or its representatives by or on behalf of any of the Company or its affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
2.02 Representations and Warranties of SHE. Except as set forth in the disclosure schedule delivered by SHE to the Company at the time of execution of this Agreement (the “SHE Disclosure Schedule”), SHE represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. SHE is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. SHE is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect with respect to SHE.
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(b) Subsidiaries. SHE, at this time, does not own directly or indirectly, equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Capital Structure of SHE. As of the date of this Agreement, the authorized capital stock of SHE consists of 100,000,000 shares of SHE Common Stock, $0.001 par value and 25,000,000 shares of Preferred Stock, par value $0.001. There are no other shares of SHE stocks issuable upon the exercise of outstanding warrants, options and otherwise. All shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal laws concerning the issuance of securities.
(d) Corporate Authority; Non-contravention. SHE has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by SHE and the consummation by SHE of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of SHE. This Agreement has been duly executed and when delivered by SHE shall constitute a valid and binding obligation of SHE, enforceable against SHE in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of SHE under, (i) its articles of incorporation, bylaws, or other charter documents of SHE (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to SHE, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to SHE, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to SHE or could not prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement.
(e) Government Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to SHE in connection with the execution and delivery of this Agreement by SHE, or the consummation by SHE of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the California Statutes, the Securities Act or the Exchange Act.
(f) Certain Fees. Except as set forth on Schedule 2.02(h), no brokerage or finder’s fees or commissions are or will be payable by SHE to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
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(g) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of SHE, threatened against or affecting SHE or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to SHE or prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against SHE having, or which, insofar as reasonably could be foreseen by SHE, in the future could have, any such effect.
(ii) SHE is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to SHE.
(iii) The conduct of the business of SHE complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(h) Benefit Plans. SHE is not a party to any Benefit Plan under which SHE currently has an obligation to provide benefits to any current or former employee, officer or director of SHE.
(i) Certain Employee Payments. SHE is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of SHE of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.
(j) Tax Returns and Tax Payments.
(i) SHE has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by SHE has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). SHE is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to SHE by a taxing authority in a jurisdiction where SHE does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of SHE did not, as of the SHE Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the SHE Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of SHE and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of SHE.
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(ii) No material claim for unpaid Taxes has been made or become a lien against the property of SHE or is being asserted against SHE, no audit of any Tax Return of SHE is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by SHE and is currently in effect. SHE has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(k) Environmental Matters. SHE is in compliance with all Environmental Laws in all material respects. SHE holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on SHE. SHE is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by SHE or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to SHE. SHE has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to SHE. SHE has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on SHE. There are no past, pending or threatened claims under Environmental Laws against SHE and SHE is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against SHE pursuant to Environmental Laws.
(l) Material Contract Defaults. SHE is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any SHE Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “SHE Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which SHE is a party (i) with expected receipts or expenditures in excess of $5,000.00 US, (ii) requiring SHE to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $5,000 or more, including guarantees of such indebtedness, or (v) which, if breached by SHE in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from SHE or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Properties. SHE has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by SHE or acquired after the date thereof which are, individually or in the aggregate, material to SHE’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by SHE are held by them under valid, subsisting and enforceable leases of which SHE is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
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(n) Intellectual Property. SHE owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of SHE’s licenses to use Software programs are current and have been paid for the appropriate number of users. To the knowledge of SHE, none of SHE’s Intellectual Property or SHE License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against SHE or its successors.
(o) Board Determination. The Board of Directors of SHE has unanimously determined that the terms of the Exchange are fair to and in the best interests of SHE and its stockholders.
(p) Required SHE Share Issuance Approval. SHE represents that the issuance of the Exchange Shares to the Selling Member will be in compliance with the California Statutes and the Bylaws of SHE.
(q) Undisclosed Liabilities. SHE has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the SHE SEC Documents incurred in the ordinary course of business.
(r) Full Disclosure. All of the representations and warranties made by SHE in this Agreement, and all statements set forth in the certificates delivered by SHE at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by SHE pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to the Company or its representatives by or on behalf of SHE and the SHE Stockholders in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO EXCHANGE
3.01 Conduct of the Company and SHE. From the date of this Agreement and until the Effective Time, or until the prior termination of this Agreement, the Company and SHE shall not, unless mutually agreed to in writing:
(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of their respective assets or which will not be discharged in full prior to the Effective Time;
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(b) sell, assign or otherwise transfer any of their assets, or cancel or compromise any debts or claims relating to their assets, other than for fair value, in the ordinary course of business, and consistent with past practice;
(c) fail to use reasonable efforts to preserve intact their present business organizations, keep available the services of their employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Effective Time;
(d) except for matters related to complaints by former employees related to wages, suffer or permit any material adverse change to occur with respect to the Company and SHE or their business or assets; or
(e) make any material change with respect to their business in accounting or bookkeeping methods, principles or practices, except as required by GAAP.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.01 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its officers, employees, counsel, financial advisors and other representatives to, afford to SHE and its representatives reasonable access during normal business hours during the period prior to the Effective Time to its and to the Company’s properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause its officers, employees and representatives to, furnish promptly to SHE all information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. For the purposes of determining the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, during the period prior to the Effective Time, SHE shall provide the Company and its representatives with reasonable access during normal business hours to its properties, books, contracts, commitments, personnel and records as may be necessary to enable the Company to confirm the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, and, during such period, SHE shall, and shall cause its officers, employees and representatives to, furnish promptly to the Company upon its request (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law, each of the Company and SHE will hold, and will cause its respective directors, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, any nonpublic information in confidence.
(b) No investigation pursuant to this Section 4.01 shall affect any representations or warranties of the Parties herein or the conditions to the obligations of the Parties hereto.
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4.02 Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. SHE and the Company shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.
4.03 Public Announcements. SHE, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process. The Parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
4.04 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
4.05 No Solicitation. Except as previously agreed to in writing by the other party, neither the Company nor SHE shall authorize or permit any of its officers, directors, agents, representatives, or advisors to (a) solicit, initiate or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any exchange, merger, consolidation, business combination, recapitalization or similar transaction involving the Company or SHE, respectively, other than the transaction contemplated by this Agreement or any other transaction the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the Exchange or which would or could be expected to dilute the benefits to either the Company or SHE of the transactions contemplated hereby. The Company or SHE will immediately cease and cause to be terminated any existing activities, discussions and negotiations with any Parties conducted heretofore with respect to any of the foregoing.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to Each Party’s Obligation to Effect the Exchange. The obligation of each Party to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Exchange shall have been issued by any court of competent jurisdiction or any other Governmental Entity having jurisdiction and shall remain in effect, and there shall not be any applicable legal requirement enacted, adopted or deemed applicable to the Exchange that makes consummation of the Exchange illegal.
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(b) Governmental Approvals. All authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by, any Governmental Entity having jurisdiction which the failure to obtain, make or occur would have a material adverse effect on SHE or the Company shall have been obtained, made or occurred.
(c) No Litigation. There shall not be pending or threatened any suit, action or proceeding before any court, Governmental Entity or authority (i) pertaining to the transactions contemplated by this Agreement or (ii) seeking to prohibit or limit the ownership or operation by the Company, SHE or any of its subsidiaries, or to dispose of or hold separate any material portion of the business or assets of the Company or SHE.
5.02 Conditions Precedent to Obligations of SHE. The obligation of SHE to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) the Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by each of them prior to the Effective Time.
(b) Consents. SHE shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of the Company that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company.
(d) Delivery of the Assignment of Shares. The selling interest holders shall have delivered the share certificates to SHE on the Closing Date.
(e) Due Diligence Investigation. SHE shall be reasonably satisfied with the results of its due diligence investigation of the Company in its sole and absolute discretion.
5.03 Conditions Precedent to Obligation of BATH. The obligation of the Company to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of SHE in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) SHE shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it prior to the Effective Time.
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(b) Consents. The Company shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of SHE that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on SHE.
(d) Board Resolutions. The Company shall have received resolutions duly adopted by SHE’s board of directors approving the execution, delivery and performance of the Agreement and the transactions contemplated by the Agreement.
(e) Delivery of the Exchange Shares Certificate. The Company shall have received the Exchange Shares Certificate on the Closing Date.
(f) Due Diligence Investigation. The Company shall be reasonably satisfied with the results of its due diligence investigation of SHE in its sole and absolute discretion.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.01 Termination. This Agreement may be terminated and abandoned at any time prior to the Effective Time of the Exchange:
(a) by mutual written consent of SHE and the Company;
(b) by either SHE or the Company if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Exchange and such order, decree, ruling or other action shall have become final and non-appealable;
(c) by either SHE or the Company if the Exchange shall not have been consummated on or before June 15, 2017 (other than as a result of the failure of the party seeking to terminate this Agreement to perform its obligations under this Agreement required to be performed at or prior to the Effective Time.);
(d) by SHE, if a material adverse change shall have occurred relative to the Company (and not curable within thirty (30) days);
(e) by the Company if a material adverse change shall have occurred relative to SHE (and not curable within thirty (30) days);
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(f) by SHE, if the Company willfully fails to perform in any material respect any of its material obligations under this Agreement; or
(g) by the Company, if SHE willfully fails to perform in any material respect any of its obligations under this Agreement.
6.02 Effect of Termination. In the event of termination of this Agreement by either the Company or SHE as provided in Section 6.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of SHE or the Company, other than the provisions of the last sentence of Section 4.01(a) and this Section 6.02. Nothing contained in this Section shall relieve any party for any breach of the representations, warranties, covenants or agreements set forth in this Agreement.
6.03 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties upon approval by the party, if such party is an individual, and upon approval of the Board of Director of SHE and of the Company.
6.04 Extension; Waiver. Subject to Section 6.01(c), at any time prior to the Effective Time, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
6.05 Return of Documents. In the event of termination of this Agreement for any reason, SHE and the Company will return to the other party all of the other party’s documents, work papers, and other materials (including copies) relating to the transactions contemplated in this Agreement, whether obtained before or after execution of this Agreement. SHE and the Company will not use any information so obtained from the other party for any purpose and will take all reasonable steps to have such other party’s information kept confidential.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
7.01 Survival of Representations and Warranties. The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Effective Time (except for with respect to Taxes, which shall survive for the applicable statute of limitations plus 90 days, and covenants that by their terms survive for a longer period).
7.02 Indemnification.
(a) SHE shall indemnify and hold the selling interest holders and the Company harmless for, from and against any and all liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (collectively, “Losses”) to which SHE may become subject resulting from or arising out of any breach of a representation, warranty or covenant made by SHE as set forth herein.
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(b) The Company and selling interest holders shall jointly indemnify and hold SHE and SHE’s officers and directors (“SHE’s Representatives”) harmless for, from and against any and all Losses to which SHE or SHE’s Representatives may become subject resulting from or arising out of (1) any breach of a representation, warranty or covenant made by the Company as set forth herein; or (2) any and all liabilities arising out of or in connection with: (A) any of the assets of the Company prior to the Closing; or (B) the operations of the Company prior to the Closing.
7.03 Notice of Indemnification. Promptly after the receipt by any indemnified party (the “Indemnitee”) of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if a claim with respect thereto is or may be made against any indemnifying party (the “Indemnifying Party”) pursuant to this Article VII, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have, upon request within thirty (30) days after receipt of such notice, but not in any event after the settlement or compromise of such claim, the right to defend, at its own expense and by its own counsel reasonably acceptable to the Indemnitee, any such matter involving the asserted liability of the Indemnitee; provided, however, that if the Indemnitee determines that there is a reasonable probability that a claim may materially and adversely affect it, other than solely as a result of money payments required to be reimbursed in full by such Indemnifying Party under this Article VII or if a conflict of interest exists between Indemnitee and the Indemnifying Party, the Indemnitee shall have the right to defend, compromise or settle such claim or suit; and, provided, further, that such settlement or compromise shall not, unless consented to in writing by such Indemnifying Party, which shall not be unreasonably withheld, be conclusive as to the liability of such Indemnifying Party to the Indemnitee. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and in cases where the Indemnifying Party shall have assumed the defense, the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. In the event that such Indemnifying Party shall decline to participate in or assume the defense of such action, prior to paying or settling any claim against which such Indemnifying Party is, or may be, obligated under this Article VII to indemnify an Indemnitee, the Indemnitee shall first supply such Indemnifying Party with a copy of a final court judgment or decree holding the Indemnitee liable on such claim or, failing such judgment or decree, the terms and conditions of the settlement or compromise of such claim. An Indemnitee’s failure to supply such final court judgment or decree or the terms and conditions of a settlement or compromise to such Indemnifying Party shall not relieve such Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. If the Indemnifying Party is defending the claim as set forth above, the Indemnifying Party shall have the right to settle the claim only with the consent of the Indemnitee.
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ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth below (or at such other address for a party as shall be specified by like notice.) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (Pacific Standard Time) on any business day, (c) on the second business day following the date of mailing, if sent by a nationally recognized overnight courier service, or (d) if by personal delivery, upon actual receipt by the party to whom such notice is required to be given.
If to SHE:
SHE Beverage Company, Inc.
42601 8th Street West, Suite 108
Lancaster, CA 93534
If to the Company:
Mink Bath Bombs
25548 Fountain Glen court #108,
Stevenson Ranch, 91381
8.02 Definitions. For purposes of this Agreement:
(a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person;
(b) “material adverse change” or “material adverse effect” means, when used in connection with the Company or SHE, any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of such party and its subsidiaries taken as a whole (after giving effect in the case of SHE to the consummation of the Exchange);
(c) “person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity; and (d) a “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person.
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8.03 Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.
8.04 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the Parties any rights or remedies.
8.05 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
8.06 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
8.07 Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of California, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the Parties hereto (a) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (b) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any state court other than such court.
8.08 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
8.09 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other Parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.
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8.10 Attorney’s Fees. In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the Parties hereto agree that the prevailing party or Parties shall be entitled to recover from the other party or Parties upon final judgment on the merits reasonable attorneys’ fees, including attorneys’ fees for any appeal, and costs incurred in bringing such suit or proceeding.
8.11 Currency. All references to currency in this Agreement shall refer to the lawful currency of the United States of America.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers to execute this Agreement as of the date first above written.
Mink Bath Bombs: | ||
By: | ||
Morganne Gervais, principle partner | ||
By: | ||
Lupie Salas, principle partner | ||
SHE Beverage Company, Inc. | ||
By: | ||
Lupe Rose, President & Chief Executive Officer |
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Company Disclosure Schedule
The following are the assets requisite from Bath to the shareholders of SHE for the consummation of this Agreement:
1) | All product, hardware, software, licenses, licensing agreements and any other assets owned by Bath at the time of the acquisition by SHE; |
2) | All trademarks, patents, logos, identifiers, etc. owned by Bath at the time of the acquisition by SHE; |
3) | All Intellectual Property, etc., owned by Bath at the time of acquisition by SHE; |
4) | All adverting signs, banners, and identifiers owned by Bath at the time of acquisition by SHE; |
5) | All Bath management and interest holders shall not enter into any competing market, work at any competing business, form any entity or operate in any business that is in direct competition with SHE and in any like business as it pertains to SHE’s acquisition of Bath for a period of five (5) years from the execution of the Acquisition and Stock Purchase Agreement executed by both Parties. |
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ACQUISITION AND STOCK EXCHANGE AGREEMENT
THIS ACQUISITION AND STOCK EXCHANGE AGREEMENT (the “Agreement”) made this 11th day of September, 2019 by and between, SHE Beverage Company, Inc., a California corporation, with offices located at 42601 8th Street West, Suite 108, Lancaster, CA 93534 (“SHE”) and Buildingit, LLC, a California limited liability company, with offices located at 45104 Trevor Ave., Suite 121 Lancaster, CA 93534 (“BLDG” or the “Company”) on behalf of its members, both parties hereinafter referred to individually as the “Party” or collectively as the “Parties.”
BACKGROUND:
A. The Boards of Directors of SHE and BLDG have determined that an acquisition of 90.0% of the issued and outstanding membership interests of BLDG by SHE through an exchange upon the terms and subject to the conditions set forth in this Agreement, would be fair and in the best interests of SHE’s stockholders and BLDG’s members, and the Boards of Directors of SHE and Managers of BLDG have approved such Exchange, pursuant to which all of the right, title and interest in and to 90.0% of the issued and outstanding membership interests in BLDG (the “Shares”) will be exchanged for the right to receive 1,900,000 shares of common stock of SHE (the “Exchange Shares”).
B. SHE and BLDG desire to make certain representations, warranties, covenants and agreements in connection with the Exchange and to prescribe various conditions to the Exchange.
C. For federal income tax purposes, the Parties intend that the Exchange shall qualify as reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the Parties agree as follows:
ARTICLE I
THE EXCHANGE
1.01 Exchange. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the California Revised Statutes (“California Statutes”), at the Closing (as hereinafter defined), the Parties shall do the following:
(a) The shareholders of BLDG will sell, convey, assign, and transfer the shares to SHE by delivering to SHE executed and transferable certificates. The shares transferred to SHE at the Closing shall constitute 90.0% of all issued and outstanding shares in the Company and will include 90.0% ownership of BLDG’s subsidiaries, if any.
(b) As consideration for its acquisition of the shares, SHE shall issue the Exchange Shares to BLDG by delivering a share certificate to BLDG evidencing the Exchange Shares (the “Exchange Share Certificates”).
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(c) For federal income tax purposes, the Exchange is intended to constitute a “reorganization” within the meaning of Section 368 of the Code, and the Parties shall report the transactions contemplated by this Agreement consistent with such intent and shall take no position in any Tax filing or legal proceeding inconsistent therewith. The Parties to this Agreement hereby adopt this Agreement as a “Plan of Reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. Neither SHE nor BLDG has taken or failed to take, and after the Effective Time (as defined below), SHE shall not take or fail to take, any action which reasonably could be expected to cause the Exchange to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
1.02 Effect of the Exchange. The Exchange shall have the effects set forth in the applicable provisions of the California State and Federal Statutes.
1.03 Closing. Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Article VI and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing of the Exchange (the “Closing”) will take place at 10:00 a.m. U.S. Pacific Standard Time on the business day upon satisfaction of the conditions set forth in Article V (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article V) (the “Closing Date”), at the offices of SHE, unless another date, time or place is agreed to in writing by the Parties hereto.
1.04 Effective Time of Exchange. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article V, the Parties shall make all filings or recordings required under California State and Federal Statutes. The Exchange shall become effective at such time as is permissible in accordance with California State and Federal Statutes (the time the Exchange becomes effective being the “Effective Time”). SHE and the Company shall use reasonable efforts to have the Closing Date and the Effective Time to be the same day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of the Company. As set forth in the Company disclosure schedule delivered by BLDG to SHE at the time of execution of this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to SHE as follows:
(a) Organization, Standing and Power. The Company is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect (as defined in Section 8.02).
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(b) Subsidiaries. The Company, other than its own wholly owned subsidiaries, does not own directly or indirectly, any equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Share Interests. The BLDG shares represent 90.0% of the issued and outstanding shares of the Company. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company. There are no rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the Company or obligating the Company to issue, grant, extend or enter into any such right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of the shares of the Company.
(d) Authority; Non-contravention. The Company has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and when delivered by the Company shall constitute a valid and binding obligation of the Company, enforceable against the Company and the selling shareholders, as applicable, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of the Company under, (i) the Company’s articles of incorporation or bylaws, if any, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to the Company, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.
(e) Governmental Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any United States court, administrative agency or commission, or other federal, state or local government or other governmental authority, agency, domestic or foreign (a “Governmental Entity”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act of 1933, as amended (the “Securities Act”) or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).
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(f) Absence of Certain Changes or Events. Except as set forth on Schedule 2.01(g), since the Company Balance Sheet Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:
(i) material adverse change with respect to the Company;
(ii) event which, if it had taken place following the execution of this Agreement, would not have been permitted by Section 3.01 without prior consent of SHE;
(iii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices or as disclosed to SHE in writing;
(v) creation or other incurrence by the Company of any lien on any asset other than in the ordinary course consistent with past practices;
(vi) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;
(vii) labor dispute, other than routine, individual grievances, or, to the knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;
(viii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;
(ix) write-offs or write-downs of any assets of the Company;
(x) creation, termination or amendment of, or waiver of any right under, any material contract of the Company;
(xi) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on the Company;
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(xii) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; or
(xiii) agreement or commitment to do any of the foregoing.
(g) Certain Fees. Except as set forth on Schedule 2.01(h), and with the exception of the “Services Agreement” between SHE and Excelsior Management, LLC, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(h) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect.
(ii) The Company is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to Company.
(iii) The conduct of the business of the Company complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(i) Benefit Plans. The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, “Benefit Plan” shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, ownership plan with respect to any membership interest, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, severance pay, termination, salary continuation, or employee assistance plan.
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(j) Tax Returns and Tax Payments.
(i) The Company has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by the Company has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). The Company is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to the Company by a taxing authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of the Company did not, as of the Company Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the Company Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of the Company and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of the Company.
(ii) No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, no audit of any Tax Return of the Company is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company and is currently in effect. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(iii) As used herein, “Taxes” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “Tax Return” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(k) Environmental Matters. The Company is in compliance with all Environmental Laws in all material respects. The Company has not received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations. The Company holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on the Company. The Company is in compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by the Company or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to the Company. The Company has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to the Company. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on the Company. There are no past, pending or threatened claims under Environmental Laws against the Company and Company is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against the Company pursuant to Environmental Laws. “Environmental Laws” means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to contamination, pollution or protection of human health or the environment, and similar state laws. “Hazardous Material” means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, byproducts and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.
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(l) Material Contract Defaults. The Company is not, nor has not received any notice or has any knowledge that any other party is, in default in any respect under any Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which the Company is a party (i) with expected receipts or expenditures in excess of $50,000.00, (ii) requiring the Company to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $50,000.00 or more, including guarantees of such indebtedness, or (v) which, if breached by the Company in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from the Company or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Accounts Receivable. All of the accounts receivable of the Company that are reflected on the Company Financial Statements or the accounting records of the Company as of the Closing (collectively, the “Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.
(n) Properties. The Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by the Company or acquired after the date thereof which are, individually or in the aggregate, material to the Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases of which the Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
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(o) Intellectual Property.
(i) As used in this Agreement, the term “Trademarks” means trademarks, service marks, trade names, internet domain names, designs, slogans, and general intangibles of like nature; the term “Trade Secrets” means technology; trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies; the term “Intellectual Property” means patents, copyrights, Trademarks, applications for any of the foregoing, and Trade Secrets; the term “Company License Agreements” means any license agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for off-the-shelf products that are generally available for less than $25,000.00), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound; and the term “Software” means any and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code.
(ii) The Company owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its respective businesses as now being conducted. To the knowledge of the Company, none of the Company’s Intellectual Property or Company License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against the Company or its successors.
(p) Undisclosed Liabilities. The Company has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Company Financial Statements incurred in the ordinary course of business or such liabilities or obligations disclosed in Schedule 2.01(g).
(q) Full Disclosure. All of the representations and warranties made by the Company in this Agreement, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to SHE or its representatives by or on behalf of any of the Company or its affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
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2.02 Representations and Warranties of SHE. Except as set forth in the disclosure schedule, if any, delivered by SHE to the Company at the time of execution of this Agreement (the “SHE Disclosure Schedule”), SHE represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. SHE is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. SHE is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect with respect to SHE.
(b) Subsidiaries. SHE, other than its wholly owned subsidiaries, does not own directly or indirectly, equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Capital Structure of SHE. As of the date of this Agreement, the authorized capital stock of SHE consists of 100,000,000 shares of SHE Common Stock, $0.001 par value and 25,000,000 shares of Preferred Stock, par value $0.001. There are no other shares of SHE stocks issuable upon the exercise of outstanding warrants, options and otherwise. All shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal laws concerning the issuance of securities.
(d) Corporate Authority; Non-contravention. SHE has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by SHE and the consummation by SHE of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of SHE. This Agreement has been duly executed and when delivered by SHE shall constitute a valid and binding obligation of SHE, enforceable against SHE in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of SHE under, (i) its articles of incorporation, bylaws, or other charter documents of SHE (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to SHE, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to SHE, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to SHE or could not prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement.
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(e) Government Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to SHE in connection with the execution and delivery of this Agreement by SHE, or the consummation by SHE of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the California Statutes, the Securities Act or the Exchange Act.
(f) Certain Fees. Except as set forth on Schedule 2.02(h) and with the exception of the current “Service Agreement” between SHE and Excelsior Management, LLC, no brokerage or finder’s fees or commissions are or will be payable by SHE to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(g) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of SHE, threatened against or affecting SHE or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to SHE or prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against SHE having, or which, insofar as reasonably could be foreseen by SHE, in the future could have, any such effect.
(ii) SHE is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to SHE.
(iii) The conduct of the business of SHE complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
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(h) Benefit Plans. SHE is not a party to any Benefit Plan under which SHE currently has an obligation to provide benefits to any current or former employee, officer or director of SHE.
(i) Certain Employee Payments. SHE is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of SHE of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.
(j) Tax Returns and Tax Payments.
(i) SHE has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by SHE has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). SHE is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to SHE by a taxing authority in a jurisdiction where SHE does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of SHE did not, as of the SHE Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the SHE Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of SHE and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of SHE.
(ii) No material claim for unpaid Taxes has been made or become a lien against the property of SHE or is being asserted against SHE, no audit of any Tax Return of SHE is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by SHE and is currently in effect. SHE has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(k) Environmental Matters. SHE is in compliance with all Environmental Laws in all material respects. SHE holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on SHE. SHE is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by SHE or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to SHE. SHE has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to SHE. SHE has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on SHE. There are no past, pending or threatened claims under Environmental Laws against SHE and SHE is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against SHE pursuant to Environmental Laws.
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(l) Material Contract Defaults. SHE is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any SHE Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “SHE Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which SHE is a party (i) with expected receipts or expenditures in excess of $5,000.00, (ii) requiring SHE to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $5,000.00 or more, including guarantees of such indebtedness, or (v) which, if breached by SHE in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from SHE or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Properties. SHE has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by SHE or acquired after the date thereof which are, individually or in the aggregate, material to SHE’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by SHE are held by them under valid, subsisting and enforceable leases of which SHE is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
(n) Intellectual Property. SHE owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of SHE’s licenses to use Software programs are current and have been paid for the appropriate number of users. To the knowledge of SHE, none of SHE’s Intellectual Property or SHE License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against SHE or its successors.
(o) Board Determination. The Board of Directors of SHE has unanimously determined that the terms of the Exchange are fair to and in the best interests of SHE and its stockholders.
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(p) Required SHE Share Issuance Approval. SHE represents that the issuance of the Exchange Shares to the Selling shareholders will be in compliance with the California Statutes and the Bylaws of SHE.
(q) Undisclosed Liabilities. SHE has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the SHE SEC Documents incurred in the ordinary course of business.
(r) Full Disclosure. All of the representations and warranties made by SHE in this Agreement, and all statements set forth in the certificates delivered by SHE at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by SHE pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to the Company or its representatives by or on behalf of SHE and the SHE Stockholders in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO EXCHANGE
3.01 Conduct of the Company and SHE. From the date of this Agreement and until the Effective Time, or until the prior termination of this Agreement, the Company and SHE shall not, unless mutually agreed to in writing:
(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of their respective assets or which will not be discharged in full prior to the Effective Time;
(b) sell, assign or otherwise transfer any of their assets, or cancel or compromise any debts or claims relating to their assets, other than for fair value, in the ordinary course of business, and consistent with past practice;
(c) fail to use reasonable efforts to preserve intact their present business organizations, keep available the services of their employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Effective Time;
(d) except for matters related to complaints by former employees related to wages, suffer or permit any material adverse change to occur with respect to the Company and SHE or their business or assets; or
(e) make any material change with respect to their business in accounting or bookkeeping methods, principles or practices, except as required by GAAP.
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ARTICLE IV
ADDITIONAL AGREEMENTS
4.01 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its officers, employees, counsel, financial advisors and other representatives to, afford to SHE and its representatives reasonable access during normal business hours during the period prior to the Effective Time to its and to the Company’s properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause its officers, employees and representatives to, furnish promptly to SHE all information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. For the purposes of determining the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, during the period prior to the Effective Time, SHE shall provide the Company and its representatives with reasonable access during normal business hours to its properties, books, contracts, commitments, personnel and records as may be necessary to enable the Company to confirm the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, and, during such period, SHE shall, and shall cause its officers, employees and representatives to, furnish promptly to the Company upon its request (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law, each of the Company and SHE will hold, and will cause its respective directors, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, any nonpublic information in confidence.
(b) No investigation pursuant to this Section 4.01 shall affect any representations or warranties of the Parties herein or the conditions to the obligations of the Parties hereto.
4.02 Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. SHE and the Company shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.
4.03 Public Announcements. SHE, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process. The Parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
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4.04 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
4.05 No Solicitation. Except as previously agreed to in writing by the other party, neither the Company nor SHE shall authorize or permit any of its officers, directors, agents, representatives, or advisors to (a) solicit, initiate or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any exchange, merger, consolidation, business combination, recapitalization or similar transaction involving the Company or SHE, respectively, other than the transaction contemplated by this Agreement or any other transaction the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the Exchange or which would or could be expected to dilute the benefits to either the Company or SHE of the transactions contemplated hereby. The Company or SHE will immediately cease and cause to be terminated any existing activities, discussions and negotiations with any Parties conducted heretofore with respect to any of the foregoing.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to Each Party’s Obligation to Effect the Exchange. The obligation of each Party to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Exchange shall have been issued by any court of competent jurisdiction or any other Governmental Entity having jurisdiction and shall remain in effect, and there shall not be any applicable legal requirement enacted, adopted or deemed applicable to the Exchange that makes consummation of the Exchange illegal.
(b) Governmental Approvals. All authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by, any Governmental Entity having jurisdiction which the failure to obtain, make or occur would have a material adverse effect on SHE or the Company shall have been obtained, made or occurred.
(c) No Litigation. There shall not be pending or threatened any suit, action or proceeding before any court, Governmental Entity or authority (i) pertaining to the transactions contemplated by this Agreement or (ii) seeking to prohibit or limit the ownership or operation by the Company, SHE or any of its subsidiaries, or to dispose of or hold separate any material portion of the business or assets of the Company or SHE.
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5.02 Conditions Precedent to Obligations of SHE. The obligation of SHE to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) the Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by each of them prior to the Effective Time.
(b) Consents. SHE shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of the Company that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company.
(d) Delivery of the Assignment of Shares. The selling interest holders shall have delivered the share certificates to SHE on the Closing Date.
(e) Due Diligence Investigation. SHE shall be reasonably satisfied with the results of its due diligence investigation of the Company in its sole and absolute discretion.
5.03 Conditions Precedent to Obligation of BLDG. The obligation of the Company to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of SHE in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) SHE shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it prior to the Effective Time.
(b) Consents. The Company shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
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(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of SHE that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on SHE.
(d) Board Resolutions. The Company shall have received resolutions duly adopted by SHE’s board of directors approving the execution, delivery and performance of the Agreement and the transactions contemplated by the Agreement.
(e) Delivery of the Exchange Shares Certificate. The Company shall have received the Exchange Shares Certificate on the Closing Date.
(f) Due Diligence Investigation. The Company shall be reasonably satisfied with the results of its due diligence investigation of SHE in its sole and absolute discretion.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.01 Termination. This Agreement may be terminated and abandoned at any time prior to the Effective Time of the Exchange:
(a) by mutual written consent of SHE and the Company;
(b) by either SHE or the Company if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Exchange and such order, decree, ruling or other action shall have become final and non-appealable;
(c) by either SHE or the Company if the Exchange shall not have been consummated on or before September 21, 2019 (other than as a result of the failure of the party seeking to terminate this Agreement to perform its obligations under this Agreement required to be performed at or prior to the Effective Time.);
(d) by SHE, if a material adverse change shall have occurred relative to the Company (and not curable within thirty (30) days);
(e) by the Company if a material adverse change shall have occurred relative to SHE (and not curable within thirty (30) days);
(f) by SHE, if the Company willfully fails to perform in any material respect any of its material obligations under this Agreement; or
(g) by the Company, if SHE willfully fails to perform in any material respect any of its obligations under this Agreement.
6.02 Effect of Termination. In the event of termination of this Agreement by either the Company or SHE as provided in Section 6.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of SHE or the Company, other than the provisions of the last sentence of Section 4.01(a) and this Section 6.02. Nothing contained in this Section shall relieve any party for any breach of the representations, warranties, covenants or agreements set forth in this Agreement.
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6.03 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties upon approval by the party, if such party is an individual, and upon approval of the Board of Director of SHE and of the Company.
6.04 Extension; Waiver. Subject to Section 6.01(c), at any time prior to the Effective Time, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
6.05 Return of Documents. In the event of termination of this Agreement for any reason, SHE and the Company will return to the other Party all of the other Party’s documents, work papers, and other materials (including copies) relating to the transactions contemplated in this Agreement, whether obtained before or after execution of this Agreement. SHE and the Company will not use any information so obtained from the other Party for any purpose and will take all reasonable steps to have such other Party’s information kept confidential.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
7.01 Survival of Representations and Warranties. The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Effective Time (except for with respect to Taxes, which shall survive for the applicable statute of limitations plus 90 days, and covenants that by their terms survive for a longer period).
7.02 Indemnification.
(a) SHE shall indemnify and hold the selling interest holders and the Company harmless for, from and against any and all liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (collectively, “Losses”) to which SHE may become subject resulting from or arising out of any breach of a representation, warranty or covenant made by SHE as set forth herein.
(b) The Company and selling interest holders shall jointly indemnify and hold SHE and SHE’s officers and directors (“SHE’s Representatives”) harmless for, from and against any and all Losses to which SHE or SHE’s Representatives may become subject resulting from or arising out of (1) any breach of a representation, warranty or covenant made by the Company as set forth herein; or (2) any and all liabilities arising out of or in connection with: (A) any of the assets of the Company prior to the Closing; or (B) the operations of the Company prior to the Closing.
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7.03 Notice of Indemnification. Promptly after the receipt by any indemnified party (the “Indemnitee”) of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if a claim with respect thereto is or may be made against any indemnifying party (the “Indemnifying Party”) pursuant to this Article VII, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have, upon request within thirty (30) days after receipt of such notice, but not in any event after the settlement or compromise of such claim, the right to defend, at its own expense and by its own counsel reasonably acceptable to the Indemnitee, any such matter involving the asserted liability of the Indemnitee; provided, however, that if the Indemnitee determines that there is a reasonable probability that a claim may materially and adversely affect it, other than solely as a result of money payments required to be reimbursed in full by such Indemnifying Party under this Article VII or if a conflict of interest exists between Indemnitee and the Indemnifying Party, the Indemnitee shall have the right to defend, compromise or settle such claim or suit; and, provided, further, that such settlement or compromise shall not, unless consented to in writing by such Indemnifying Party, which shall not be unreasonably withheld, be conclusive as to the liability of such Indemnifying Party to the Indemnitee. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and in cases where the Indemnifying Party shall have assumed the defense, the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. In the event that such Indemnifying Party shall decline to participate in or assume the defense of such action, prior to paying or settling any claim against which such Indemnifying Party is, or may be, obligated under this Article VII to indemnify an Indemnitee, the Indemnitee shall first supply such Indemnifying Party with a copy of a final court judgment or decree holding the Indemnitee liable on such claim or, failing such judgment or decree, the terms and conditions of the settlement or compromise of such claim. An Indemnitee’s failure to supply such final court judgment or decree or the terms and conditions of a settlement or compromise to such Indemnifying Party shall not relieve such Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. If the Indemnifying Party is defending the claim as set forth above, the Indemnifying Party shall have the right to settle the claim only with the consent of the Indemnitee.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth below (or at such other address for a party as shall be specified by like notice.) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (Pacific Standard Time) on any business day, (c) on the second business day following the date of mailing, if sent by a nationally recognized overnight courier service, or (d) if by personal delivery, upon actual receipt by the party to whom such notice is required to be given.
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If to SHE:
42601 8th Street West, Suite 108, Lancaster, CA 93534
If to the Company:
45104 Trevor Ave., Suite 121, Lancaster, CA 93534
8.02 Definitions. For purposes of this Agreement:
(a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person;
(b) “material adverse change” or “material adverse effect” means, when used in connection with the Company or SHE, any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of such party and its subsidiaries taken as a whole (after giving effect in the case of SHE to the consummation of the Exchange);
(c) “person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity; and (d) a “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person.
8.03 Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.
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8.04 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the Parties any rights or remedies.
8.05 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
8.06 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
8.07 Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of California, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the Parties hereto (a) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (b) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any state court other than such court.
8.08 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
8.09 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other Parties. No Party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.
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8.10 Attorney’s Fees. In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the Parties hereto agree that the prevailing party or Parties shall be entitled to recover from the other Party or Parties upon final judgment on the merits of reasonable attorneys’ fees, including attorneys’ fees for any appeal, and costs incurred in bringing such suit or proceeding.
8.11 Currency. All references to currency in this Agreement shall refer to the lawful currency of the United States of America.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers to execute this Agreement as of the date first above written.
Buildingit, LLC | ||
By: | /s/ James Bradley Yelton | |
James Bradley Yelton, Co-Managing Partner/Owner | ||
By: | /s/ Thomas Ryan Wakefield | |
Thomas Ryan Wakefield, Co-Managing Partner/Owner | ||
SHE Beverage Company, Inc. | ||
By: | /s/ Lupe Rose | |
Lupe Rose, President & Chief Executive Officer |
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EXHIBIT “A”
The following are requisite from SHE to BLDG for the consummation of this Agreement:
1) | SHE shall issue one million nine hundred thousand (1,900,000) exchange shares of common stock of SHE in exchange for ninety percent (90.0%) of the outstanding membership interests of BLDG; |
2) | The remaining ten percent (10.0%) interests in BLDG held by Mr. Yelton and Mr. Wakefield shall be paid out yearly based on the net profit of BLDG. |
3) | SHE’s exchange shares to be valued at two dollars and fifty cents US ($2.50 US) per share; |
4) | SHE shall have four hundred thousand (400,000) shares, two hundred thousand (200,000) each of Mr. Yelton’s and Mr. Wakefield’s shares, of said common stock registered in SHE’s S-1 offering to be registered with the United States Securities and Exchange Commission; |
5) | Mr. Yelton and Mr. Wakefield will remain as Co-Managers of BLDG with an annual salary, stock options, bonuses, etc., as delineated in a mutually acceptable Employment Agreement; |
6) | SHE shall grant a “Buy Back” clause for the 400,000 registered shares held by Mr. Yelton and Mr. Wakefield. The “Buy Back” price to be $2.50 per share and is initiated 90 days after SHE is cleared to quote by NASDAQ and receives funding via its Investment Bank and/or IPO funding. The “Buy Back” clause concludes 90 days after the initiated start of said clause. Upon conclusion of said clause, SHE is no longer held to the language of said clause and Mr. Yelton and Mr. Wakefield shall keep the shares designated in the clause. |
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The following are requisite from BLDG to SHE for the consummation of this Agreement:
1) | The exchange shares of BLDG held by Mr. Yelton, Mr. Wakefield and all affiliate shares as disclosed by BLDG shall constitute ninety percent (90.0%) of the total issued and outstanding membership interests of BLDG and the exchange will also constitute majority ownership to SHE of BLDG and all of BLDG’s subsidiary companies; |
2) | All debt by BLDG owed to Mr. Yelton, Mr. Wakefield and BLDG’s affiliates, et., al., shall be converted into shares of BLDG and included in the exchange, and therefore the debt is eliminated with the issuance of the SHE exchange shares; |
3) | All options of BLDG owned by Mr. Yelton, Mr. Wakefiled and BLDG’s affiliates, et., al., shall be converted into shares of BLDG and included in the exchange, and therefore the options are eliminated with the issuance of the SHE exchange shares; |
4) | Mr. Yelton and Mr. Wakefield shall retain their respective position as co-managers of BLDG and engaged by SHE for said positions in an Employment Agreement. |
5) | Mr. Yelton and Mr. Wakefield shall cause any and all actions necessary to extinguish any current litigation both for or against BLDG; |
6) | SHE will not incur any of BLDG’s operational expenses until ninety (90) days after SHE is funded via Investment Bank funding or funding through SHE’s S.E.C registered S-1 Offering Memorandum; |
7) | All BLDG operational personnel shall stay with BLDG and/or their respective subsidiary companies at their current positions until suitable replacements can be found, if necessary; |
8) | Upon consummation of the acquisition of the BLDG company and any/all of its subsidiaries, all real property, all apps, i.e., Swapp, etc., all products, services, copyrights, goodwill, patents, intellectual property, etc., shall be owned in full by SHE: and |
9) | The BLDG Operating Budget shall be determined, defined and submitted to SHE’s Board of Directors for approval. |
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Company Disclosure Schedule
The following are the assets requisite from BLDG and its subsidiaries to SHE for the consummation of this Agreement:
1) | All hardware, i.e., computers, furniture, hard drives, products, goodwill and any other hardware owned by BLDG at the time of the acquisition by SHE; |
2) | All trademarks, patents (issued, pending and theorized), logos, identifiers, etc., owned by BLDG at the time of the acquisition by SHE; |
3) | All Intellectual Property, i.e., the platforms, codes, coding and designs, Apps, i.e., Swapp, etc., owned by BLDG at the time of acquisition by SHE; |
4) | All adverting signs, banners, and identifiers owned by BLDG at the time of acquisition by SHE; |
5) | All clients, customers, retailers, etc., owned and or serviced, etc., by BLDG at the time of acquisition by SHE; |
6) | All bank accounts, banking information and all financial information as it pertains to BLDG and its subsidiaries; and |
7) | All BLDG management and affiliate interest holders who benefit from the SHE exchange shares, shall not enter into any competing market, work at any competing business, form any entity or operate in any business that is in direct competition with SHE and in any like business as it pertains to SHE’s acquisition of BLDG for a period of five (5) years from the execution of the Acquisition and Stock Purchase Agreement executed by both Parties. |
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ACQUISITION AND STOCK EXCHANGE AGREEMENT
THIS ACQUISITION AND STOCK EXCHANGE AGREEMENT (the “Agreement”) made this 1st day of February, 2019 by and between, SHE Beverage Company, Inc., a California corporation, with offices located at 42601 8th Street West, Suite 108, Lancaster, CA 93534 (“SHE”) and Le Chic Home, a California dba, with offices located at 4332 Club Vista Dr., Palmdale, CA 93551 (“CHIC” or the “Company”) on behalf of its members, both parties hereinafter referred to individually as the “Party” or collectively as the “Parties.”
BACKGROUND:
A. The Boards of Directors of SHE and CHIC have determined that an acquisition of 100% of the outstanding ownership interests of CHIC by SHE through an exchange upon the terms and subject to the conditions set forth in this Agreement, would be fair and in the best interests of SHE’s stockholders and CHIC’s interest holders, and the Boards of Directors of SHE and CHIC have approved such Exchange, pursuant to which all of the right, title and interest in and to 100% of the membership interests in CHIC (the “Shares”) will be exchanged for the right to receive 110,000 shares of common stock of SHE (the “Exchange Shares”).
B. SHE and CHIC desire to make certain representations, warranties, covenants and agreements in connection with the Exchange and to prescribe various conditions to the Exchange.
C. For federal income tax purposes, the Parties intend that the Exchange shall qualify as reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the Parties agree as follows:
ARTICLE I
THE EXCHANGE
1.01 Exchange. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the California Revised Statutes (“California Statutes”), at the Closing (as hereinafter defined), the Parties shall do the following:
(a) The interest holders of CHIC will sell, convey, assign, and transfer the membership interests to SHE by delivering to SHE executed and transferable certificates. The membership interests transferred to SHE at the Closing shall constitute 100% of all issued and outstanding ownership interests in the Company.
(b) As consideration for its acquisition of the membership interests, SHE shall issue the Exchange Shares to CHIC by delivering the ownership interest to CHIC evidencing the Exchange Shares (the “Exchange Share Certificates”).
(c) For federal income tax purposes, the Exchange is intended to constitute a “reorganization” within the meaning of Section 368 of the Code, and the Parties shall report the transactions contemplated by this Agreement consistent with such intent and shall take no position in any Tax filing or legal proceeding inconsistent therewith. The Parties to this Agreement hereby adopt this Agreement as a “Plan of Reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. None of SHE or CHIC has taken or failed to take, and after the Effective Time (as defined below), SHE shall not take or fail to take, any action which reasonably could be expected to cause the Exchange to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
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1.02 Effect of the Exchange. The Exchange shall have the effects set forth in the applicable provisions of the California Statutes.
1.03 Closing. Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Article VI and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing of the Exchange (the “Closing”) will take place at 10:00 a.m. U.S. Pacific Standard Time on the business day upon satisfaction of the conditions set forth in Article V (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article V) (the “Closing Date”), at the offices of EAD Law Group, LLC, unless another date, time or place is agreed to in writing by the Parties hereto.
1.04 Effective Time of Exchange. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article V, the Parties shall make all filings or recordings required under California Statutes. The Exchange shall become effective at such time as is permissible in accordance with California Statutes (the time the Exchange becomes effective being the “Effective Time”). SHE and the Company shall use reasonable efforts to have the Closing Date and the Effective Time to be the same day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 Representations and Warranties of the Company. As set forth in the Company disclosure schedule delivered by CHIC to SHE at the time of execution of this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to SHE as follows:
(a) Organization, Standing and Power. The Company is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect (as defined in Section 8.02).
(b) Subsidiaries. The Company does not own directly or indirectly, any equity or other shares in any company, corporation, partnership, joint venture or otherwise.
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(c) Membership Interests. The Membership Interests represent 100% of the issued and outstanding membership interests of the Company. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company. There are no rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional membership interests of the Company or obligating the Company to issue, grant, extend or enter into any such right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of the membership interests of the Company.
(d) Authority; Non-contravention. The Company has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and when delivered by the Company shall constitute a valid and binding obligation of the Company, enforceable against the Company and the selling shareholders, as applicable, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of the Company under, (i) the Company’s articles of incorporation or bylaws, if any, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to the Company, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.
(e) Governmental Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any United States court, administrative agency or commission, or other federal, state or local government or other governmental authority, agency, domestic or foreign (a “Governmental Entity”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act of 1933, as amended (the “Securities Act”) or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).
(f) Absence of Certain Changes or Events. Except as set forth on Schedule 2.01(g), since the Company Balance Sheet Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:
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(i) material adverse change with respect to the Company;
(ii) event which, if it had taken place following the execution of this Agreement, would not have been permitted by Section 3.01 without prior consent of SHE;
(iii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices or as disclosed to SHE in writing;
(v) creation or other incurrence by the Company of any lien on any asset other than in the ordinary course consistent with past practices;
(vi) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;
(vii) labor dispute, other than routine, individual grievances, or, to the knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;
(viii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;
(ix) write-offs or write-downs of any assets of the Company;
(x) creation, termination or amendment of, or waiver of any right under, any material contract of the Company;
(xi) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on the Company;
(xii) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; or
(xiii) agreement or commitment to do any of the foregoing.
(g) Certain Fees. Except as set forth on Schedule 2.01(h), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
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(h) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect.
(ii) The Company is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to Company.
(iii) The conduct of the business of the Company complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(i) Benefit Plans. The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, “Benefit Plan” shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, ownership plan with respect to any membership interest, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, severance pay, termination, salary continuation, or employee assistance plan.
(j) Tax Returns and Tax Payments.
(i) The Company has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by the Company has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). The Company is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to the Company by a taxing authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of the Company did not, as of the Company Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the Company Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of the Company and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of the Company.
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(ii) No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, no audit of any Tax Return of the Company is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company and is currently in effect. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(iii) As used herein, “Taxes” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “Tax Return” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(k) Environmental Matters. The Company is in compliance with all Environmental Laws in all material respects. The Company has not received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations. The Company holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on the Company. The Company is in compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by the Company or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to the Company. The Company has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to the Company. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on the Company. There are no past, pending or threatened claims under Environmental Laws against the Company and Company is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against the Company pursuant to Environmental Laws. “Environmental Laws” means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to contamination, pollution or protection of human health or the environment, and similar state laws. “Hazardous Material” means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, byproducts and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.
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(l) Material Contract Defaults. The Company is not, nor has not received any notice or has any knowledge that any other party is, in default in any respect under any Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which the Company is a party (i) with expected receipts or expenditures in excess of $50,000, (ii) requiring the Company to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $50,000 or more, including guarantees of such indebtedness, or (v) which, if breached by the Company in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from the Company or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Accounts Receivable. All of the accounts receivable of the Company that are reflected on the Company Financial Statements or the accounting records of the Company as of the Closing (collectively, the “Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.
(n) Properties. The Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by the Company or acquired after the date thereof which are, individually or in the aggregate, material to the Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases of which the Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
(o) Intellectual Property.
(i) As used in this Agreement, the term “Trademarks” means trademarks, service marks, trade names, internet domain names, designs, slogans, and general intangibles of like nature; the term “Trade Secrets” means technology; trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies; the term “Intellectual Property” means patents, copyrights, Trademarks, applications for any of the foregoing, and Trade Secrets; the term “Company License Agreements” means any license agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for off-the-shelf products that are generally available for less than $25,000), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound; and the term “Software” means any and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code.
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(ii) The Company owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its respective businesses as now being conducted. To the knowledge of the Company, none of the Company’s Intellectual Property or Company License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against the Company or its successors.
(p) Undisclosed Liabilities. The Company has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Company Financial Statements incurred in the ordinary course of business or such liabilities or obligations disclosed in Schedule 2.01(g).
(q) Full Disclosure. All of the representations and warranties made by the Company in this Agreement, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to SHE or its representatives by or on behalf of any of the Company or its affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
2.02 Representations and Warranties of SHE. Except as set forth in the disclosure schedule delivered by SHE to the Company at the time of execution of this Agreement (the “SHE Disclosure Schedule”), SHE represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. SHE is duly organized, validly existing and in good standing under the laws of the State of California and has the requisite corporate power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. SHE is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect with respect to SHE.
(b) Subsidiaries. SHE, at this time, does not own directly or indirectly, equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Capital Structure of SHE. As of the date of this Agreement, the authorized capital stock of SHE consists of 100,000,000 shares of SHE Common Stock, $0.001 par value and 25,000,000 shares of Preferred Stock, par value $0.001. There are no other shares of SHE stocks issuable upon the exercise of outstanding warrants, options and otherwise. All shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal laws concerning the issuance of securities.
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(d) Corporate Authority; Non-contravention. SHE has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by SHE and the consummation by SHE of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of SHE. This Agreement has been duly executed and when delivered by SHE shall constitute a valid and binding obligation of SHE, enforceable against SHE in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of SHE under, (i) its articles of incorporation, bylaws, or other charter documents of SHE (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to SHE, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to SHE, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to SHE or could not prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement.
(e) Government Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to SHE in connection with the execution and delivery of this Agreement by SHE, or the consummation by SHE of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the California Statutes, the Securities Act or the Exchange Act.
(f) Certain Fees. Except as set forth on Schedule 2.02(h), no brokerage or finder’s fees or commissions are or will be payable by SHE to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(g) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of SHE, threatened against or affecting SHE or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to SHE or prevent, hinder or materially delay the ability of SHE to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against SHE having, or which, insofar as reasonably could be foreseen by SHE, in the future could have, any such effect.
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(ii) SHE is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to SHE.
(iii) The conduct of the business of SHE complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(h) Benefit Plans. SHE is not a party to any Benefit Plan under which SHE currently has an obligation to provide benefits to any current or former employee, officer or director of SHE.
(i) Certain Employee Payments. SHE is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of SHE of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.
(j) Tax Returns and Tax Payments.
(i) SHE has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by SHE has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). SHE is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to SHE by a taxing authority in a jurisdiction where SHE does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of SHE did not, as of the SHE Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the SHE Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of SHE and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of SHE.
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(ii) No material claim for unpaid Taxes has been made or become a lien against the property of SHE or is being asserted against SHE, no audit of any Tax Return of SHE is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by SHE and is currently in effect. SHE has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(k) Environmental Matters. SHE is in compliance with all Environmental Laws in all material respects. SHE holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on SHE. SHE is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by SHE or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to SHE. SHE has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to SHE. SHE has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on SHE. There are no past, pending or threatened claims under Environmental Laws against SHE and SHE is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against SHE pursuant to Environmental Laws.
(l) Material Contract Defaults. SHE is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any SHE Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “SHE Material Contract” means any contract, agreement or commitment that is effective as of the Closing Date to which SHE is a party (i) with expected receipts or expenditures in excess of $5,000, (ii) requiring SHE to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $5,000 or more, including guarantees of such indebtedness, or (v) which, if breached by SHE in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from SHE or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Properties. SHE has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by SHE or acquired after the date thereof which are, individually or in the aggregate, material to SHE’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by SHE are held by them under valid, subsisting and enforceable leases of which SHE is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
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(n) Intellectual Property. SHE owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of SHE’s licenses to use Software programs are current and have been paid for the appropriate number of users. To the knowledge of SHE, none of SHE’s Intellectual Property or SHE License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against SHE or its successors.
(o) Board Determination. The Board of Directors of SHE has unanimously determined that the terms of the Exchange are fair to and in the best interests of SHE and its stockholders.
(p) Required SHE Share Issuance Approval. SHE represents that the issuance of the Exchange Shares to the Selling Member will be in compliance with the California Statutes and the Bylaws of SHE.
(q) Undisclosed Liabilities. SHE has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the SHE SEC Documents incurred in the ordinary course of business.
(r) Full Disclosure. All of the representations and warranties made by SHE in this Agreement, and all statements set forth in the certificates delivered by SHE at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by SHE pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to the Company or its representatives by or on behalf of SHE and the SHE Stockholders in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO EXCHANGE
3.01 Conduct of the Company and SHE. From the date of this Agreement and until the Effective Time, or until the prior termination of this Agreement, the Company and SHE shall not, unless mutually agreed to in writing:
(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of their respective assets or which will not be discharged in full prior to the Effective Time;
(b) sell, assign or otherwise transfer any of their assets, or cancel or compromise any debts or claims relating to their assets, other than for fair value, in the ordinary course of business, and consistent with past practice;
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(c) fail to use reasonable efforts to preserve intact their present business organizations, keep available the services of their employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Effective Time;
(d) except for matters related to complaints by former employees related to wages, suffer or permit any material adverse change to occur with respect to the Company and SHE or their business or assets; or
(e) make any material change with respect to their business in accounting or bookkeeping methods, principles or practices, except as required by GAAP.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.01 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its officers, employees, counsel, financial advisors and other representatives to, afford to SHE and its representatives reasonable access during normal business hours during the period prior to the Effective Time to its and to the Company’s properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause its officers, employees and representatives to, furnish promptly to SHE all information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. For the purposes of determining the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, during the period prior to the Effective Time, SHE shall provide the Company and its representatives with reasonable access during normal business hours to its properties, books, contracts, commitments, personnel and records as may be necessary to enable the Company to confirm the accuracy of the representations and warranties of SHE set forth herein and compliance by SHE of its obligations hereunder, and, during such period, SHE shall, and shall cause its officers, employees and representatives to, furnish promptly to the Company upon its request (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law, each of the Company and SHE will hold, and will cause its respective directors, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, any nonpublic information in confidence.
(b) No investigation pursuant to this Section 4.01 shall affect any representations or warranties of the Parties herein or the conditions to the obligations of the Parties hereto.
4.02 Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. SHE and the Company shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.
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4.03 Public Announcements. SHE, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process. The Parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
4.04 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
4.05 No Solicitation. Except as previously agreed to in writing by the other party, neither the Company nor SHE shall authorize or permit any of its officers, directors, agents, representatives, or advisors to (a) solicit, initiate or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any exchange, merger, consolidation, business combination, recapitalization or similar transaction involving the Company or SHE, respectively, other than the transaction contemplated by this Agreement or any other transaction the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the Exchange or which would or could be expected to dilute the benefits to either the Company or SHE of the transactions contemplated hereby. The Company or SHE will immediately cease and cause to be terminated any existing activities, discussions and negotiations with any Parties conducted heretofore with respect to any of the foregoing.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to Each Party’s Obligation to Effect the Exchange. The obligation of each Party to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Exchange shall have been issued by any court of competent jurisdiction or any other Governmental Entity having jurisdiction and shall remain in effect, and there shall not be any applicable legal requirement enacted, adopted or deemed applicable to the Exchange that makes consummation of the Exchange illegal.
(b) Governmental Approvals. All authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by, any Governmental Entity having jurisdiction which the failure to obtain, make or occur would have a material adverse effect on SHE or the Company shall have been obtained, made or occurred.
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(c) No Litigation. There shall not be pending or threatened any suit, action or proceeding before any court, Governmental Entity or authority (i) pertaining to the transactions contemplated by this Agreement or (ii) seeking to prohibit or limit the ownership or operation by the Company, SHE or any of its subsidiaries, or to dispose of or hold separate any material portion of the business or assets of the Company or SHE.
5.02 Conditions Precedent to Obligations of SHE. The obligation of SHE to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) the Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by each of them prior to the Effective Time.
(b) Consents. SHE shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of the Company that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company.
(d) Delivery of the Assignment of Shares. The selling interest holders shall have delivered the share certificates to SHE on the Closing Date.
(e) Due Diligence Investigation. SHE shall be reasonably satisfied with the results of its due diligence investigation of the Company in its sole and absolute discretion.
5.03 Conditions Precedent to Obligation of CHIC. The obligation of the Company to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The representations and warranties of SHE in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) SHE shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it prior to the Effective Time.
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(b) Consents. The Company shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change. There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of SHE that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on SHE.
(d) Board Resolutions. The Company shall have received resolutions duly adopted by SHE’s board of directors approving the execution, delivery and performance of the Agreement and the transactions contemplated by the Agreement.
(e) Delivery of the Exchange Shares Certificate. The Company shall have received the Exchange Shares Certificate on the Closing Date.
(f) Due Diligence Investigation. The Company shall be reasonably satisfied with the results of its due diligence investigation of SHE in its sole and absolute discretion.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.01 Termination. This Agreement may be terminated and abandoned at any time prior to the Effective Time of the Exchange:
(a) by mutual written consent of SHE and the Company;
(b) by either SHE or the Company if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Exchange and such order, decree, ruling or other action shall have become final and non-appealable;
(c) by either SHE or the Company if the Exchange shall not have been consummated on or before February 2, 2019 (other than as a result of the failure of the party seeking to terminate this Agreement to perform its obligations under this Agreement required to be performed at or prior to the Effective Time.);
(d) by SHE, if a material adverse change shall have occurred relative to the Company (and not curable within thirty (30) days);
(e) by the Company if a material adverse change shall have occurred relative to SHE (and not curable within thirty (30) days);
(f) by SHE, if the Company willfully fails to perform in any material respect any of its material obligations under this Agreement; or
(g) by the Company, if SHE willfully fails to perform in any material respect any of its obligations under this Agreement.
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6.02 Effect of Termination. In the event of termination of this Agreement by either the Company or SHE as provided in Section 6.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of SHE or the Company, other than the provisions of the last sentence of Section 4.01(a) and this Section 6.02. Nothing contained in this Section shall relieve any party for any breach of the representations, warranties, covenants or agreements set forth in this Agreement.
6.03 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties upon approval by the party, if such party is an individual, and upon approval of the Board of Director of SHE and of the Company.
6.04 Extension; Waiver. Subject to Section 6.01(c), at any time prior to the Effective Time, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
6.05 Return of Documents. In the event of termination of this Agreement for any reason, SHE and the Company will return to the other party all of the other party’s documents, work papers, and other materials (including copies) relating to the transactions contemplated in this Agreement, whether obtained before or after execution of this Agreement. SHE and the Company will not use any information so obtained from the other party for any purpose and will take all reasonable steps to have such other party’s information kept confidential.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
7.01 Survival of Representations and Warranties. The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Effective Time (except for with respect to Taxes, which shall survive for the applicable statute of limitations plus 90 days, and covenants that by their terms survive for a longer period).
7.02 Indemnification.
(a) SHE shall indemnify and hold the selling interest holders and the Company harmless for, from and against any and all liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (collectively, “Losses”) to which SHE may become subject resulting from or arising out of any breach of a representation, warranty or covenant made by SHE as set forth herein.
(b) The Company and selling interest holders shall jointly indemnify and hold SHE and SHE’s officers and directors (“SHE’s Representatives”) harmless for, from and against any and all Losses to which SHE or SHE’s Representatives may become subject resulting from or arising out of (1) any breach of a representation, warranty or covenant made by the Company as set forth herein; or (2) any and all liabilities arising out of or in connection with: (A) any of the assets of the Company prior to the Closing; or (B) the operations of the Company prior to the Closing.
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7.03 Notice of Indemnification. Promptly after the receipt by any indemnified party (the “Indemnitee”) of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if a claim with respect thereto is or may be made against any indemnifying party (the “Indemnifying Party”) pursuant to this Article VII, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have, upon request within thirty (30) days after receipt of such notice, but not in any event after the settlement or compromise of such claim, the right to defend, at its own expense and by its own counsel reasonably acceptable to the Indemnitee, any such matter involving the asserted liability of the Indemnitee; provided, however, that if the Indemnitee determines that there is a reasonable probability that a claim may materially and adversely affect it, other than solely as a result of money payments required to be reimbursed in full by such Indemnifying Party under this Article VII or if a conflict of interest exists between Indemnitee and the Indemnifying Party, the Indemnitee shall have the right to defend, compromise or settle such claim or suit; and, provided, further, that such settlement or compromise shall not, unless consented to in writing by such Indemnifying Party, which shall not be unreasonably withheld, be conclusive as to the liability of such Indemnifying Party to the Indemnitee. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and in cases where the Indemnifying Party shall have assumed the defense, the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. In the event that such Indemnifying Party shall decline to participate in or assume the defense of such action, prior to paying or settling any claim against which such Indemnifying Party is, or may be, obligated under this Article VII to indemnify an Indemnitee, the Indemnitee shall first supply such Indemnifying Party with a copy of a final court judgment or decree holding the Indemnitee liable on such claim or, failing such judgment or decree, the terms and conditions of the settlement or compromise of such claim. An Indemnitee’s failure to supply such final court judgment or decree or the terms and conditions of a settlement or compromise to such Indemnifying Party shall not relieve such Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. If the Indemnifying Party is defending the claim as set forth above, the Indemnifying Party shall have the right to settle the claim only with the consent of the Indemnitee.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth below (or at such other address for a party as shall be specified by like notice.) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (Pacific Standard Time) on any business day, (c) on the second business day following the date of mailing, if sent by a nationally recognized overnight courier service, or (d) if by personal delivery, upon actual receipt by the party to whom such notice is required to be given.
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If to SHE:
42601 8th Street West, Suite 108, Lancaster, CA 93534
If to the Company:
4332 Club Vista Dr., Palmdale, CA 93551
8.02 Definitions. For purposes of this Agreement:
(a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person;
(b) “material adverse change” or “material adverse effect” means, when used in connection with the Company or SHE, any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of such party and its subsidiaries taken as a whole (after giving effect in the case of SHE to the consummation of the Exchange);
(c) “person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity; and (d) a “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person.
8.03 Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.
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8.04 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the Parties any rights or remedies.
8.05 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
8.06 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
8.07 Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of California, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the Parties hereto (a) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (b) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any state court other than such court.
8.08 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
8.09 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other Parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.
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8.10 Attorney’s Fees. In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the Parties hereto agree that the prevailing party or Parties shall be entitled to recover from the other party or Parties upon final judgment on the merits reasonable attorneys’ fees, including attorneys’ fees for any appeal, and costs incurred in bringing such suit or proceeding.
8.11 Currency. All references to currency in this Agreement shall refer to the lawful currency of the United States of America.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers to execute this Agreement as of the date first above written.
LE CHIC Home: | ||
By: | /s/ Juliette Perez | |
Juliette Perez, Principle | ||
By: | /s/ Martin Perez | |
Martin Perez, Principle | ||
SHE Beverage Company, Inc. | ||
By: | /s/ Lupe Rose | |
Lupe Rose, Chief Executive Officer |
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EXHIBIT A
The following are the assets requisite from CHIC to the shareholders of SHE for the consummation of this Agreement:
1) | All hardware, i.e., products, components, and any other hardware owned by CHIC at the time of the acquisition by SHE; |
2) | All trademarks, patents, logos, identifiers, etc. owned by CHIC at the time of the acquisition by SHE; |
3) | All Intellectual Property, i.e., the platforms, box designs, etc., owned by CHIC at the time of acquisition by SHE; |
4) | All adverting signs, banners, and identifiers owned by CHIC at the time of acquisition by SHE; |
5) | All CHIC management and interest holders shall not enter into any competing market, work at any competing business, form any entity or operate in any business that is in direct competition with SHE and in any like business as it pertains to SHE’s acquisition of CHIC for a period of five (5) years from the execution of the Acquisition and Stock Purchase Agreement executed by both Parties. |
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Exhibit 1
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on this 29th day of June, 2018 (the "Effective Date") by and between SHE Beverage Company, Inc., a Nevada corporation, with office located at 42601 8th Street, Suite 108, Lancaster, CA 93534 (the "Company"), and Brandon Shelby, an individual, located at 42601 8th Street, Suite 108, Lancaster, CA 93534, (the "Executive"), both parties hereinafter referred to as the "Parties."
RECITALS
A. The Company desires to be assured of the association and services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the tenns, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual tenns, covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. Company agrees to employ Executive, and Executive agrees to be employed by Company, beginning as of the Effective Date and continuing until the tennination date as set forth herein " (the "Term"), subject to the terms and conditions ofthis Agreement and further subject to the supervision and direction of the Company's Board of Directors.
2. Term. The term of this Agreement shall be for a period of Five (5) years commencing on the date hereof, unless terminated earlier pursuant to Section 7 below; provided, however, that Executive's obligations in Section 6 below shall continue in effect after such termination.
2.1 | Post Term Employment. |
Should Executive remain employed by Company beyond the expiration of the Term such employment shall convert to a month-to-month relationship terminable at any time by either Company or Executive for any reason whatsoever, with or without cause.
3. | Scope of Duties. |
3.1 Assignment of Duties. Executive shall have such duties as may be assigned to him or her from time to time by the Company's Board of Directors commensurate with his experience and responsibilities in the position for which he is employed pursuant to Section l above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company.
3.2 General Specification of Duties. Executive's duties shall include, but not be limited to, the duties and performance goals as follows:
(I) | act as Corporate Secretary of the Company and perfonn all duties, functions and responsibilities generally associated thereto; |
(2) | personally review the financial statements of the company as may be prepared from time to time or otherwise cause to be prepared, as directed by the Company, financial statements, tax returns and other similar items respecting the operation of the Company; |
(3) | execute on behalf of the Company, in his capacity as Corporate Secretary, all documents as reasonably and properly requested by the Company; |
(4) | employ, pay, supervise and discharge all Executives of the Company, and determine all matters with regard to such personnel, including, without limitation, compensation, bonuses and fringe benefits, all in accordance the policies which may be implemented by the Board of Directors of the Company; |
(5) | assist in establishing procedures for implementing the policies established by the Company; |
(6) | assist in insuring cooperation of the officers of the Company; |
(7) | assist in causing the Company to be operated in compliance with all legal requirements; |
(8) | assist in operating the Company in conformance with any plan approved by the Company, as such may be amended from time to time with the concurrence of the Company; and |
(9) | Perform all other acts deemed necessary and proper for the Company, in the sole discretion of Executive. |
3.3. Moreover, the foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of his or her employment obligations under this Agreement.
Executive initially shall be employed in the position set forth herein.. Company may subsequently modify Executive's duties and responsibilities; provided however, in the event Company substantially reduces the duties or responsibilities of Executive, Executive may elect to terminate this Agreement and said termination shall constitute an Involuntary Termination. Executive shall at all times comply with and be subject to such policies and procedures as Company may establish from time to time.
3.4 Executive's Devotion of Time. Executive hereby agrees to devote his time, abilities and energy to the faithful performance of the duties assigned to him or her and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or herself or to any other person or business entity, unless otherwise approved by the Board of Directors.
3.5 | Conflicting Activities. |
(1) Executive shall not, during the term of this Agreement, be engaged in any other business activity substantially similar to that of the Company's primary business without the prior consent of the Board of Directors of the Company; provided, however, that this restriction shall not be construed as preventing Executive from investing his personal assets in any investments, including but not limited to, business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities which do not unreasonably impede his performance as executive for the Company.
(2) Executive hereby agrees to promote and develop all business opportunities that come to his attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with his duties under this Agreement.
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4. Compensation; Reimbursement.
4.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of One Hundred Thirty Thousand Dollars US ($130,000.00 US) per annum (the "Base Salary"). The amount of the Base Salary shall be determined by the Board of Directors and may be increased, but not decreased, from time to time by the Board of Directors of the Company. No such change shall in any way abrogate, alter, terminate or otherwise affect the other terms of this Agreement.
4.2 Periodic Bonuses. In addition to the Base Salary, Executive shall be eligible for periodic bonuses (the "Periodic Bonuses") in amounts to be determined by the Board of Directors.The criteria upon which the Periodic Bonuses are awarded shall be at the discretion of the Board of Directors.
4.3 Reimbursement. Executive shall be reimbursed for all reasonable "out-of-pocket" business expenses for business travel and business entertainment incurred in connection with the performance of his or her duties under this Agreement so long as such expenses constitute business deductions from taxable income for the Company and are excludable from taxable income to the Executive under the governing laws and regulations of the Internal Revenue Service.
4.4 Stock. Executive shall be entitled to four percent (4.0%) of the issued and outstanding shares of common stock of the Company, per annum, based on sales and/or profitability of company as determined by the Board of Directors. Said shares to be issued on a quarterly basis as earned.
5. Severance. So long as this Agreement is in effect, Executive shall at all times be entitled to severance benefits as may be determined by the Board of Directors in its sole discretion. These benefits may include, the Company's maintenance at its cost of a life insurance policy and disability policy on Executive payable to Executive and/or his or her legal representative or heirs as applicable, in amounts reasonably agreed to by Executive and the Company.
6. Termination.
6.1 Bases for Termination.
(1) Executive's employment may be terminated by the Company "with cause," effective upon delivery of 5 business days of written notice to Executive if any of the following shall occur:
(a) | any action by Executive which would constitute a willful breach of duty or habitual neglect of duty; |
(b) | any material breach of Executive's obligations as described herein; or |
(c) | any material acts or events which inhibit Executive from fully performing his or her responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive's lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. |
(2) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. "Permanent incapacity" as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company's Board of Directors based upon a certification of such incapacity by, in the discretion of the Company's Board of Directors, either Executive's regularly attending physician or a duly licensed physician selected by the Company's Board of Directors, rendering Executive unable to perform substantially all of his or her duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have "become permanently incapacitated" on the date the Company's Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive.
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(3) Notwithstanding any other provisions of this Agreement, Executive shall have the right to terminate the employment relationshi p under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(i) | a breach by Company of any provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Executive to Company; or |
(ii) | for any other reason whatsoever, in the sole discretion of Executive. |
the termination of Executive's employment by Executive under Section 7.1(3)(i), prior to the expiration of the Term shall constitute an "Involuntary Termination" as though Executive was terminated by the Company without cause. The termination of Executive's employment by Executive prior to the expiration of the Term shall constitute a "Voluntary Termination" if made pursuant to Section 6.l.(3)(ii) and shall be treated as the Company was forced to terminate Executive with cause.
7. | Miscellaneous. |
7.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company, except that Executive may transfer all rights, titles and obligations he has under this Employment Agreement to an entity for which he is an owner. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.
7.2 Severabilitv. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California.
7.4 Countemarts . This Agreement may be executed in several counter parts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation , promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.
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7.6 Modification. This Agreement may be modified, amended, superseded, or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived , only by a written instrument executed by the party or parties to be bound by any such modification, amendment, super-session, cancellation, or waiver.
7.7 Attorneys' Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys' fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation ofthis Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the parties for the receipt ofnotice shall be as follows:
lf to the Company:
SHE Beverage Company, Inc.
42601 8th Street, Suite 108
Lancaster, CA 93534
If to Executive:
Brandon Shelby
42601 8th Street, Suite 108
Lancaster, CA 93534
Each notice given by registerecl or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be eemed o.be effective as of the time of actual delivery thereof. Each party may change its address for notice by g1vmg notice thereof in the manner provided above.
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7.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company.
7.13 Effective Date. This Agreement shall become effective as of the date set forth on page l when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed as of the date first set forth above.
Executive:
By: | ||
Brandon Shelby, an individual |
Company:
By: | ||
Lupe Rose, Director |
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Exhibit 2
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made and entered into on this 18th day of July, 2019 (the “Effective Date”) by and between SHE Beverage Company, Inc., a California corporation, with office located at 42601 8th Street West, Suite 108, Lancaster, CA 93534 (the "Company"), and Sheila Shelby-Crouch, an individual, located at 6017 Cold Creek Court, Fontana, CA 92336, (the "Executive"), both parties hereinafter referred to individually as the “Party” and collectively as the “Parties.”
RECITALS
A. The Company desires to be assured of the association and services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the Parties hereto do hereby agree as follows:
1. Employment. Company agrees to employ Executive, and Executive agrees to be employed by Company, beginning as of the Effective Date and continuing until the termination date as set forth herein " (the "Term"), subject to the terms and conditions of this Agreement and further subject to the supervision and direction of the Company's Board of Directors.
2. Term. The term of this Agreement shall be for a period of Five (5) years commencing on the date hereof, unless terminated earlier pursuant to Section 7 below; provided, however, that Executive's obligations in Section 6 below shall continue in effect after such termination.
2.1 Post Term Employment.
Should Executive remain employed by Company beyond the expiration of the Term, such employment shall convert to a month-to-month relationship terminable at any time by either Company or Executive for any reason whatsoever, with or without cause.
3. Scope of Duties.
3.1 Assignment of Duties. Executive shall have such duties as may be assigned to him from time to time by the Company's Board of Directors commensurate with her experience and responsibilities in the position for which he is employed pursuant to Section 1 above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company.
3.2 General Specification of Duties. Executive's duties shall include, but not be limited to, the duties and performance goals as follows:
(1) | act as Chairperson of the Finance Committee of the Company and perform all duties, functions and responsibilities generally associated thereto; |
(2) | personally, review the financial statements of the company as may be prepared from time to time or otherwise cause to be prepared, as directed by the Company, financial statements, tax returns and other similar items respecting the operation of the Company; |
(3) | execute on behalf of the Company, in her capacity as Chairperson, all documents as reasonably and properly requested by the Company; |
(4) | assist in establishing procedures for implementing the financial policies established by the Company; |
(5) | assist in causing the Company to be operated financially in compliance with all legal requirements; |
(6) | assist in operating the Company in conformance with any financial plan approved by the Company, as such may be amended from time to time with the concurrence of the Company; and |
(7) | Perform all other acts deemed necessary and proper for the Company, in the sole discretion of Company. |
3.3. Moreover, the foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of her employment obligations under this Agreement.
Executive initially shall be employed in the position set forth herein. Company may subsequently modify Executive's duties and responsibilities; provided however, in the event Company substantially reduces the duties or responsibilities of Executive, Executive may elect to terminate this Agreement and said termination shall constitute an Involuntary Termination. Executive shall at all times comply with and be subject to such policies and procedures as Company may establish from time to time.
3.4 Executive's Devotion of Time. Executive hereby agrees to devote her time, abilities and energy to the faithful performance of the duties assigned to him and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or to any other person or business entity, unless otherwise approved by the Board of Directors.
3.5 Conflicting Activities.
(1) Executive shall not, during the term of this Agreement, be engaged in any other business activity substantially similar to that of the Company’s primary business without the prior consent of the Board of Directors of the Company; provided, however, that this restriction shall not be construed as preventing Executive from investing her personal assets in any investments, including but not limited to, business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities which do not unreasonably impede her performance as executive for the Company.
(2) Executive hereby agrees to promote and develop all business opportunities that come to him attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with her duties under this Agreement.
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4. Compensation; Reimbursement.
4.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of Two Hundred Twenty Five Thousand Dollars US ($225,000.00 US) per annum (the "Base Salary"). The amount of the Base Salary shall be determined by the Board of Directors and may be increased, but not decreased, from time to time by the Board of Directors of the Company. No such change shall in any way abrogate, alter, terminate or otherwise affect the other terms of this Agreement.
4.2 Periodic Bonuses. In addition to the Base Salary, Executive shall be eligible for periodic bonuses (the "Periodic Bonuses") in amounts to be determined by the Board of Directors. The criteria upon which the Periodic Bonuses are awarded shall be at the discretion of the Board of Directors. Executive shall be granted an initial bonus of Two Hundred Fifty Thousand Dollars US ($250,000.00 US) payable within ninety (90) days after funding is realized from the Company’s S-1 offering memorandum filed with the United States Securities and Exchange Commission.
4.3 Reimbursement. Executive shall be reimbursed for all reasonable "out-of-pocket" business expenses for business travel and business entertainment incurred in connection with the performance of her duties under this Agreement so long as such expenses constitute business deductions from taxable income for the Company, are authorized in advance by the Company and are excludable from taxable income to the Executive under the governing laws and regulations of the Internal Revenue Service.
4.4 Stock. Executive shall be entitled to one hundred thousand (100,000) shares of common stock of the Company, per annum, as determined by the Board of Directors.
5. Severance. So long as this Agreement is in effect, Executive shall at all times be entitled to severance benefits as may be determined by the Board of Directors in its sole discretion. These benefits may include, the Company's maintenance at its cost of a life insurance policy and disability policy on Executive payable to Executive and/or her legal representative or heirs as applicable, in amounts reasonably agreed to by Executive and the Company.
6. Termination.
6.1 Bases for Termination.
(1) Executive's employment may be terminated by the Company "with cause," effective upon delivery of five (5) business days of written notice to Executive if any of the following shall occur:
(a) | any action by Executive which would constitute a willful breach of duty or habitual neglect of duty; |
(b) | any material breach of Executive's obligations as described herein; or |
(c) | any material acts or events which inhibit Executive from fully performing her responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive's lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. |
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(2) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. "Permanent Incapacity" as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company's Board of Directors based upon a certification of such incapacity by, in the discretion of the Company's Board of Directors, either Executive's regularly attending physician or a duly licensed physician selected by the Company's Board of Directors, rendering Executive unable to perform substantially all of her duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have "become permanently incapacitated" on the date the Company's Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive.
(3) Notwithstanding any other provisions of this Agreement, Executive shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(i) | a breach by Company of any provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Executive to Company; or |
(ii) | for any other reason whatsoever, in the sole discretion of Executive. |
The termination of Executive's employment by Executive under Section 7.1(3)(i), prior to the expiration of the Term shall constitute an "Involuntary Termination" as though Executive was terminated by the Company without cause. The termination of Executive's employment by Executive prior to the expiration of the Term shall constitute a "Voluntary Termination" if made pursuant to Section 6.1.(3)(ii) and shall be treated as the Company was forced to terminate Executive with cause.
7. Miscellaneous.
7.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company, except that Executive may transfer all rights, titles and obligations he has under this Employment Agreement to an entity for which he is an owner. This Agreement shall be binding upon and inure to the benefit of all of the Parties hereto and their respective permitted heirs, personal representatives, successors and assigns.
7.2 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California.
7.4 Counterparts. This Agreement may be executed in several counter parts and all documents so executed shall constitute one agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.
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7.6 Modification. This Agreement may be modified, amended, superseded, or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the Party or Parties to be bound by any such modification, amendment, super- session, cancellation, or waiver.
7.7 Attorneys' Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys' fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the Parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the Parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the Parties for the receipt of notice shall be as follows:
If to the Company: | If to Executive: |
SHE Beverage Company, Inc. | Sheila Shelby-Crouch |
42601 8th Street West, Suite 108 | 6017 Cold Creek Court |
Lancaster, CA 93534 | Fontana, CA 92336 |
Each notice given by registered or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be deemed to be effective as of the time of actual delivery thereof. Each party may change its address for notice by giving notice thereof in the manner provided above.
7.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company.
7.13 Effective Date. This Agreement shall become effective as of the date set forth on page 1 when signed by Executive and the Company.
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IN WITNESS WHEREOF, the Parties hereto have caused this Employment Agreement to be executed as of the date first set forth above.
Executive:
By: | ||
Sheila Shelby-Crouch, an individual |
Company:
By: | ||
Lupe Rose, CEO and Chairperson of the Board |
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EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on this 29th day of June, 2018 (the “Effective Date”) by and between SHE Beverage Company, Inc., a Nevada corporation, with office located at 42601 8th Street, Suite 108, Lancaster, CA 93534 (the “Company”), and Katherine Dirden, an individual, located at 42601 8th Street, Suite 108, Lancaster, CA 93534, (the “Executive”), both parties hereinafter referred to as the “Parties.”
RECITALS
A. The Company desires to be assured of the association and services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. Company agrees to employ Executive, and Executive agrees to be employed by Company, beginning as of the Effective Date and continuing until the termination date as set forth herein ” (the “Term”), subject to the terms and conditions of this Agreement and further subject to the supervision and direction of the Company’s Board of Directors.
2. Term. The term of this Agreement shall be for a period of Five (5) years commencing on the date hereof, unless terminated earlier pursuant to Section 7 below; provided, however, that Executive’s obligations in Section 6 below shall continue in effect after such termination.
2.1 Post Term Employment.
Should Executive remain employed by Company beyond the expiration of the Term such employment shall convert to a month-to-month relationship terminable at any time by either Company or Executive for any reason whatsoever, with or without cause.
3. Scope of Duties.
3.1 Assignment of Duties. Executive shall have such duties as may be assigned to him or her from time to time by the Company’s Board of Directors commensurate with his experience and responsibilities in the position for which he is employed pursuant to Section 1 above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company.
3.2 General Specification of Duties. Executive’s duties shall include, but not be limited to, the duties and performance goals as follows:
(1) | act as Treasurer and Chief Operating Officer of the Company and perform all duties, functions and responsibilities generally associated thereto; |
(2) | personally review the financial statements of the company as may be prepared from time to time or otherwise cause to be prepared, as directed by the Company, financial statements, tax returns and other similar items respecting the operation of the Company; |
(3) | execute on behalf of the Company, in her capacity as Treasurer and Chief Operating Officer, all documents as reasonably and properly requested by the Company; |
(4) | employ, pay, supervise and discharge all Executives of the Company, and determine all matters with regard to such personnel, including, without limitation, compensation, bonuses and fringe benefits, all in accordance the policies which may be implemented by the Board of Directors of the Company; |
(5) | assist in establishing procedures for implementing the policies established by the Company; |
(6) | assist in insuring cooperation of the officers of the Company; |
(7) | assist in causing the Company to be operated in compliance with all legal requirements; |
(8) | assist in operating the Company in conformance with any plan approved by the Company, as such may be amended from time to time with the concurrence of the Company; and |
(9) | Perform all other acts deemed necessary and proper for the Company, in the sole discretion of Executive. |
3.3. Moreover, the foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of his or her employment obligations under this Agreement.
Executive initially shall be employed in the position set forth herein.. Company may subsequently modify Executive’s duties and responsibilities; provided however, in the event Company substantially reduces the duties or responsibilities of Executive, Executive may elect to terminate this Agreement and said termination shall constitute an Involuntary Termination. Executive shall at all times comply with and be subject to such policies and procedures as Company may establish from time to time.
3.4 Executive’s Devotion of Time. Executive hereby agrees to devote his time, abilities and energy to the faithful performance of the duties assigned to him or her and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or herself or to any other person or business entity, unless otherwise approved by the Board of Directors.
3.5 Conflicting Activities.
(1) Executive shall not, during the term of this Agreement, be engaged in any other business activity substantially similar to that of the Company’s primary business without the prior consent of the Board of Directors of the Company; provided, however, that this restriction shall not be construed as preventing Executive from investing his personal assets in any investments, including but not limited to, business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities which do not unreasonably impede his performance as executive for the Company.
(2) Executive hereby agrees to promote and develop all business opportunities that come to his attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with his duties under this Agreement.
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4. Compensation; Reimbursement.
4.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of One Hundred Seventy Five Thousand Dollars US ($175,000.00 US) per annum (the “Base Salary”). The amount of the Base Salary shall be determined by the Board of Directors and may be increased, but not decreased, from time to time by the Board of Directors of the Company. No such change shall in any way abrogate, alter, terminate or otherwise affect the other terms of this Agreement.
4.2 Periodic Bonuses. In addition to the Base Salary, Executive shall be eligible for periodic bonuses (the “Periodic Bonuses”) in amounts to be determined by the Board of Directors. The criteria upon which the Periodic Bonuses are awarded shall be at the discretion of the Board of Directors.
4.3 Reimbursement. Executive shall be reimbursed for all reasonable “out-of-pocket” business expenses for business travel and business entertainment incurred in connection with the performance of his or her duties under this Agreement so long as such expenses constitute business deductions from taxable income for the Company and are excludable from taxable income to the Executive under the governing laws and regulations of the Internal Revenue Service.
4.4 Stock. Executive shall be entitled to four percent (4.0%) of the issued and outstanding shares of common stock of the Company, per annum, based on sales and/or profitability of company as determined by the Board of Directors. Said shares to be issued on a quarterly basis as earned.
5. Severance. So long as this Agreement is in effect, Executive shall at all times be entitled to severance benefits as may be determined by the Board of Directors in its sole discretion. These benefits may include, the Company’s maintenance at its cost of a life insurance policy and disability policy on Executive payable to Executive and/or his or her legal representative or heirs as applicable, in amounts reasonably agreed to by Executive and the Company.
6. Termination.
6.1 Bases for Termination.
(1) Executive’s employment may be terminated by the Company “with cause,” effective upon delivery of 5 business days of written notice to Executive if any of the following shall occur:
(a) | any action by Executive which would constitute a willful breach of duty or habitual neglect of duty; |
(b) | any material breach of Executive’s obligations as described herein; or |
(c) | any material acts or events which inhibit Executive from fully performing his or her responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive’s lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. |
(2) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company’s Board of Directors based upon a certification of such incapacity by, in the discretion of the Company’s Board of Directors, either Executive’s regularly attending physician or a duly licensed physician selected by the Company’s Board of Directors, rendering Executive unable to perform substantially all of his or her duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have “become permanently incapacitated” on the date the Company’s Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive.
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(3) Notwithstanding any other provisions of this Agreement, Executive shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(i) | a breach by Company of any provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Executive to Company; or |
(ii) | for any other reason whatsoever, in the sole discretion of Executive. |
The termination of Executive’s employment by Executive under Section 7.1(3)(i), prior to the expiration of the Term shall constitute an “Involuntary Termination” as though Executive was terminated by the Company without cause. The termination of Executive’s employment by Executive prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 6.1.(3)(ii) and shall be treated as the Company was forced to terminate Executive with cause.
7. Miscellaneous.
7.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company, except that Executive may transfer all rights, titles and obligations he has under this Employment Agreement to an entity for which he is an owner. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.
7.2 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California.
7.4 Counterparts. This Agreement may be executed in several counter parts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.
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7.6 Modification. This Agreement may be modified, amended, superseded, or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, super-session, cancellation, or waiver.
7.7 Attorneys’ Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys’ fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the parties for the receipt of notice shall be as follows:
If to the Company:
SHE Beverage Company, Inc.
42601 8th Street, Suite 108
Lancaster, CA 93534
If to Executive:
Katherine Dirden
42601 8th Street, Suite 108
Lancaster, CA 93534
Each notice given by registered or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be deemed to be effective as of the time of actual delivery thereof. Each party may change its address for notice by giving notice thereof in the manner provided above.
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7.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company.
7.13 Effective Date. This Agreement shall become effective as of the date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed as of the date first set forth above.
Executive: | ||
By: | /s/ Katherine Dirden | |
Katherine Dirden, an individual | ||
Company: | ||
By: | /s/ Lupe Rose | |
Lupe Rose, Director |
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EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on this 29th day of June, 2018 (the “Effective Date”) by and between SHE Beverage Company, Inc., a Nevada corporation, with office located at 42601 8th Street, Suite 108, Lancaster, CA 93534 (the “Company”), and Lupe Rose, an individual, located at 42601 8th Street, Suite 108, Lancaster, CA 93534, (the “Executive”), both parties hereinafter referred to as the “Parties.”
RECITALS
A. The Company desires to be assured of the association and services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. Company agrees to employ Executive, and Executive agrees to be employed by Company, beginning as of the Effective Date and continuing until the termination date as set forth herein ” (the “Term”), subject to the terms and conditions of this Agreement and further subject to the supervision and direction of the Company’s Board of Directors.
2. Term. The term of this Agreement shall be for a period of Five (5) years commencing on the date hereof, unless terminated earlier pursuant to Section 7 below; provided, however, that Executive’s obligations in Section 6 below shall continue in effect after such termination.
2.1 Post Term Employment.
Should Executive remain employed by Company beyond the expiration of the Term such employment shall convert to a month-to-month relationship terminable at any time by either Company or Executive for any reason whatsoever, with or without cause.
3. Scope of Duties.
3.1 Assignment of Duties. Executive shall have such duties as may be assigned to him or her from time to time by the Company’s Board of Directors commensurate with her experience and responsibilities in the position for which he is employed pursuant to Section 1 above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company.
3.2 General Specification of Duties. Executive’s duties shall include, but not be limited to, the duties and performance goals as follows:
(1) | act as President and Chief Executive Officer of the Company and perform all duties, functions and responsibilities generally associated thereto; |
(2) | personally review the financial statements of the company as may be prepared from time to time or otherwise cause to be prepared, as directed by the Company, financial statements, tax returns and other similar items respecting the operation of the Company; |
(3) | execute on behalf of the Company, in her capacity as President and Chief Executive Officer, all documents as reasonably and properly requested by the Company; |
(4) | employ, pay, supervise and discharge all Executives of the Company, and determine all matters with regard to such personnel, including, without limitation, compensation, bonuses and fringe benefits, all in accordance the policies which may be implemented by the Board of Directors of the Company; |
(5) | assist in establishing procedures for implementing the policies established by the Company; |
(6) | assist in insuring cooperation of the officers of the Company; |
(7) | assist in causing the Company to be operated in compliance with all legal requirements; |
(8) | assist in operating the Company in conformance with any plan approved by the Company, as such may be amended from time to time with the concurrence of the Company; and |
(9) | Perform all other acts deemed necessary and proper for the Company, in the sole discretion of Executive. |
3.3. Moreover, the foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of her employment obligations under this Agreement.
Executive initially shall be employed in the position set forth herein.. Company may subsequently modify Executive’s duties and responsibilities; provided however, in the event Company substantially reduces the duties or responsibilities of Executive, Executive may elect to terminate this Agreement and said termination shall constitute an Involuntary Termination. Executive shall at all times comply with and be subject to such policies and procedures as Company may establish from time to time.
3.4 Executive’s Devotion of Time. Executive hereby agrees to devote her time, abilities and energy to the faithful performance of the duties assigned to him or her and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or herself or to any other person or business entity, unless otherwise approved by the Board of Directors.
3.5 Conflicting Activities.
(1) Executive shall not, during the term of this Agreement, be engaged in any other business activity substantially similar to that of the Company’s primary business without the prior consent of the Board of Directors of the Company; provided, however, that this restriction shall not be construed as preventing Executive from investing her personal assets in any investments, including but not limited to, business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities which do not unreasonably impede her performance as executive for the Company.
(2) Executive hereby agrees to promote and develop all business opportunities that come to her attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with her duties under this Agreement.
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4. Compensation; Reimbursement.
4.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of Two Hundred Fifty Thousand Dollars US ($250,000.00 US) per annum (the “Base Salary”). The amount of the Base Salary shall be determined by the Board of Directors and may be increased, but not decreased, from time to time by the Board of Directors of the Company. No such change shall in any way abrogate, alter, terminate or otherwise affect the other terms of this Agreement.
4.2 Periodic Bonuses. In addition to the Base Salary, Executive shall be eligible for periodic bonuses (the “Periodic Bonuses”) in amounts to be determined by the Board of Directors. The criteria upon which the Periodic Bonuses are awarded shall be at the discretion of the Board of Directors.
4.3 Reimbursement. Executive shall be reimbursed for all reasonable “out-of-pocket” business expenses for business travel and business entertainment incurred in connection with the performance of her duties under this Agreement so long as such expenses constitute business deductions from taxable income for the Company and are excludable from taxable income to the Executive under the governing laws and regulations of the Internal Revenue Service.
4.4 Stock. Executive shall be entitled to four percent (4.0%) of the issued and outstanding shares of common stock of the Company, per annum, based on sales and/or profitability of company as determined by the Board of Directors. Said shares to be issued on a quarterly basis as earned.
5. Severance. So long as this Agreement is in effect, Executive shall at all times be entitled to severance benefits as may be determined by the Board of Directors in its sole discretion. These benefits may include, the Company’s maintenance at its cost of a life insurance policy and disability policy on Executive payable to Executive and/or her legal representative or heirs as applicable, in amounts reasonably agreed to by Executive and the Company.
6. Termination.
6.1 Bases for Termination.
(1) Executive’s employment may be terminated by the Company “with cause,” effective upon delivery of 5 business days of written notice to Executive if any of the following shall occur:
(a) | any action by Executive which would constitute a willful breach of duty or habitual neglect of duty; |
(b) | any material breach of Executive’s obligations as described herein; or |
(c) | any material acts or events which inhibit Executive from fully performing her responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive’s lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. |
(2) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company’s Board of Directors based upon a certification of such incapacity by, in the discretion of the Company’s Board of Directors, either Executive’s regularly attending physician or a duly licensed physician selected by the Company’s Board of Directors, rendering Executive unable to perform substantially all of her duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have “become permanently incapacitated” on the date the Company’s Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive.
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(3) Notwithstanding any other provisions of this Agreement, Executive shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(i) | a breach by Company of any provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Executive to Company; or |
(ii) | for any other reason whatsoever, in the sole discretion of Executive. |
The termination of Executive’s employment by Executive under Section 7.1(3)(i), prior to the expiration of the Term shall constitute an “Involuntary Termination” as though Executive was terminated by the Company without cause. The termination of Executive’s employment by Executive prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 6.1.(3)(ii) and shall be treated as the Company was forced to terminate Executive with cause.
7. Miscellaneous.
7.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company, except that Executive may transfer all rights, titles and obligations he has under this Employment Agreement to an entity for which he is an owner. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.
7.2 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California.
7.4 Counterparts. This Agreement may be executed in several counter parts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.
4 |
7.6 Modification. This Agreement may be modified, amended, superseded, or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, super-session, cancellation, or waiver.
7.7 Attorneys’ Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys’ fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the parties for the receipt of notice shall be as follows:
If to the Company:
SHE Beverage Company, Inc.
42601 8th Street, Suite 108
Lancaster, CA 93534
If to Executive:
Lupe Rose
42601 8th Street, Suite 108
Lancaster, CA 93534
Each notice given by registered or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be deemed to be effective as of the time of actual delivery thereof. Each party may change its address for notice by giving notice thereof in the manner provided above.
5 |
7.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company.
7.13 Effective Date. This Agreement shall become effective as of the date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed as of the date first set forth above.
Executive: | ||
By: | /s/ Lupe Rose | |
Lupe Rose, Director | ||
Company: | ||
By: | /s/ Sonja Shelby | |
Sonja Shelby, an individual |
6 |
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into on this 29th day of June, 2018 (the “Effective Date”) by and between SHE Beverage Company, Inc., a Nevada corporation, with office located at 42601 8th Street, Suite 108, Lancaster, CA 93534 (the “Company”), and Sonja Shelby, an individual, located at 42601 8th Street, Suite 108, Lancaster, CA 93534, (the “Executive”), both parties hereinafter referred to as the “Parties.”
RECITALS
A. The Company desires to be assured of the association and services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. Company agrees to employ Executive, and Executive agrees to be employed by Company, beginning as of the Effective Date and continuing until the termination date as set forth herein “ (the “Term”), subject to the terms and conditions of this Agreement and further subject to the supervision and direction of the Company's Board of Directors.
2. Term. The term of this Agreement shall be for a period of Five (5) years commencing on the date hereof, unless terminated earlier pursuant to Section 7 below; provided, however, that Executive's obligations in Section 6 below shall continue in effect after such termination.
2.1 Post Term Employment.
Should Executive remain employed by Company beyond the expiration of the Term such employment shall convert to a month-to-month relationship terminable at any time by either Company or Executive for any reason whatsoever, with or without cause.
3. Scope of Duties.
3.1 Assignment of Duties. Executive shall have such duties as may be assigned to him or her from time to time by the Company's Board of Directors commensurate with his experience and responsibilities in the position for which he is employed pursuant to Section 1 above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company.
3.2 General Specification of Duties. Executive's duties shall include, but not be limited to, the duties and performance goals as follows:
(1) | act as Executive Vice-President of the Company and perform all duties, functions and responsibilities generally associated thereto; |
(2) | personally review the financial statements of the company as may be prepared from time to time or otherwise cause to be prepared, as directed by the Company, financial statements, tax returns and other similar items respecting the operation of the Company; |
(3) | execute on behalf of the Company, in her capacity as Executive Vice-President, all documents as reasonably and properly requested by the Company; |
(4) | employ, pay, supervise and discharge all Executives of the Company, and determine all matters with regard to such personnel, including, without limitation, compensation, bonuses and fringe benefits, all in accordance the policies which may be implemented by the Board of Directors of the Company; |
(5) | assist in establishing procedures for implementing the policies established by the Company; |
(6) | assist in insuring cooperation of the officers of the Company; |
(7) | assist in causing the Company to be operated in compliance with all legal requirements; |
(8) | assist in operating the Company in conformance with any plan approved by the Company, as such may be amended from time to time with the concurrence of the Company; and |
(9) | Perform all other acts deemed necessary and proper for the Company, in the sole discretion of Executive. |
3.3. Moreover, the foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of his or her employment obligations under this Agreement.
Executive initially shall be employed in the position set forth herein.. Company may subsequently modify Executive's duties and responsibilities; provided however, in the event Company substantially reduces the duties or responsibilities of Executive, Executive may elect to terminate this Agreement and said termination shall constitute an Involuntary Termination. Executive shall at all times comply with and be subject to such policies and procedures as Company may establish from time to time.
3.4 Executive’s Devotion of Time. Executive hereby agrees to devote his time, abilities and energy to the faithful performance of the duties assigned to him or her and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or herself or to any other person or business entity, unless otherwise approved by the Board of Directors.
3.5 Conflicting Activities.
(1) Executive shall not, during the term of this Agreement, be engaged in any other business activity substantially similar to that of the Company’s primary business without the prior consent of the Board of Directors of the Company; provided, however, that this restriction shall not be construed as preventing Executive from investing his personal assets in any investments, including but not limited to, business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities which do not unreasonably impede his performance as executive for the Company.
(2) Executive hereby agrees to promote and develop all business opportunities that come to his attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with his duties under this Agreement.
2 |
4. Compensation; Reimbursement.
4.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of Two Hundred Thousand Dollars US ($200,000.00 US) per annum (the “Base Salary”). The amount of the Base Salary shall be determined by the Board of Directors and may be increased, but not decreased, from time to time by the Board of Directors of the Company. No such change shall in any way abrogate, alter, terminate or otherwise affect the other terms of this Agreement.
4.2 Periodic Bonuses. In addition to the Base Salary, Executive shall be eligible for periodic bonuses (the “Periodic Bonuses”) in amounts to be determined by the Board of Directors. The criteria upon which the Periodic Bonuses are awarded shall be at the discretion of the Board of Directors.
4.3 Reimbursement. Executive shall be reimbursed for all reasonable “out-of-pocket” business expenses for business travel and business entertainment incurred in connection with the performance of his or her duties under this Agreement so long as such expenses constitute business deductions from taxable income for the Company and are excludable from taxable income to the Executive under the governing laws and regulations of the Internal Revenue Service.
4.4 Stock. Executive shall be entitled to four percent (4.0%) of the issued and outstanding shares of common stock of the Company, per annum, based on sales and/or profitability of company as determined by the Board of Directors. Said shares to be issued on a quarterly basis as earned.
5. Severance. So long as this Agreement is in effect, Executive shall at all times be entitled to severance benefits as may be determined by the Board of Directors in its sole discretion. These benefits may include, the Company's maintenance at its cost of a life insurance policy and disability policy on Executive payable to Executive and/or his or her legal representative or heirs as applicable, in amounts reasonably agreed to by Executive and the Company.
6. Termination.
6.1 Bases for Termination.
(1) Executive's employment may be terminated by the Company “with cause,” effective upon delivery of 5 business days of written notice to Executive if any of the following shall occur:
(a) | any action by Executive which would constitute a willful breach of duty or habitual neglect of duty; |
(b) | any material breach of Executive's obligations as described herein; or |
(c) | any material acts or events which inhibit Executive from fully performing his or her responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive's lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. |
(2) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. “Permanent incapacity” as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company's Board of Directors based upon a certification of such incapacity by, in the discretion of the Company's Board of Directors, either Executive's regularly attending physician or a duly licensed physician selected by the Company's Board of Directors, rendering Executive unable to perform substantially all of his or her duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have “become permanently incapacitated” on the date the Company's Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive.
3 |
(3) Notwithstanding any other provisions of this Agreement, Executive shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(i) | a breach by Company of any provision of this Agreement which remains uncorrected for thirty (30) days following written notice of such breach by Executive to Company; or |
(ii) | for any other reason whatsoever, in the sole discretion of Executive. |
The termination of Executive’s employment by Executive under Section 7.1(3)(i), prior to the expiration of the Term shall constitute an “Involuntary Termination” as though Executive was terminated by the Company without cause. The termination of Executive's employment by Executive prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 6.1.(3)(ii) and shall be treated as the Company was forced to terminate Executive with cause.
7. Miscellaneous.
7.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company, except that Executive may transfer all rights, titles and obligations he has under this Employment Agreement to an entity for which he is an owner. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns.
7.2 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
7.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of California.
7.4 Counterparts. This Agreement may be executed in several counter parts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts.
7.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement, or statement not so set forth herein.
4 |
7.6 Modification. This Agreement may be modified, amended, superseded, or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, super-session, cancellation, or waiver.
7.7 Attorneys' Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys' fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same.
7.8 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature.
7.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one of such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy.
7.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement.
7.11 Notices. Any notice under this Agreement must be in writing, may be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the parties for the receipt of notice shall be as follows:
If to the Company:
SHE Beverage Company, Inc.
42601 8th Street, Suite 108
Lancaster, CA 93534
If to Executive:
Sonja Shelby
42601 8th Street, Suite 108
Lancaster, CA 93534
Each notice given by registered or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be deemed to be effective as of the time of actual delivery thereof. Each party may change its address for notice by giving notice thereof in the manner provided above.
5 |
7.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company.
7.13 Effective Date. This Agreement shall become effective as of the date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed as of the date first set forth above.
Executive: | ||
By: | /s/ Sonja Shelby | |
Sonja Shelby, an individual | ||
Company: | ||
By: | /s/ Lupe Rose | |
Lupe Rose, Director |
6 |
Exhibit 10.7
She Beverage Company, Inc.
Subscription Agreement
1. | INVESTMENT: |
The undersigned (“Buyer”) subscribes for ________________________ shares of She Beverage Company, Inc. at $15.00 per Share.
The total subscription price ($15.00 times number of Shares) $_________________________.
PLEASE MAKE CHECK PAYABLE TO: SHE Beverage Company, Inc.
2. INVESTOR INFORMATION:
___________________________________ ______________________________________
Name (Type or Print) SSN/EIN/Taxpayer I.D.
Address: _______________________________________________________________________
___________________________________ _______________________________________
Joint Name (Type or Print) SSN/EIN/Taxpayer I.D.
Address________________________________________________________________________
Mailing Address (if different from above):
_______________________________________________________________________________
Street City State Zip
Business Phone: ( ) ____________ Home Phone: ( ) ____________ Email: ___________
3. TYPE OF OWNERSHIP: (You must check one box)
1. [ ] Individual 6. [ ] Joint Tenants with rights of Survivorship
2. [ ] Tenants in Common 7. [ ] Custodian for: ________________________________.
3. [ ] Community Property 8. [ ] Uniform Gifts to Minors Act of the State of ________.
4. [ ] Partnership 9. [ ] Corporation
5. [ ] Trust 10. [ ] Other: explain: _______________________________.
1 |
4. | Further Representations, Warrants and Covenants. Buyer hereby represents warrants, covenants and agrees as follows: |
(a) | Buyer is at least eighteen (18) years of age with an address as set forth in this Subscription Agreement. |
(b) |
Except as set forth in the Prospectus and the exhibits thereto, no representations or warranties, oral or otherwise, have been made to Buyer by the Company or any other person, whether or not associated with the Company or this offering. In entering into this transaction, Buyer is not relying upon any information, other than that contained in the Prospectus and the exhibits thereto and the results of any independent investigation conducted by Buyer at Buyer’s sole discretion and judgment. |
(c) |
Buyer is under no legal disability nor is Buyer subject to any order, which would prevent or interfere with Buyer’s execution, delivery and performance of this Subscription Agreement or his or her purchase of the Shares. The Shares are being purchased solely for Buyer’s own account and not for the account of others and for investment purposes only, and are not being purchased with a view to or for the transfer, assignment, resale or distribution thereof, in whole or part. Buyer has no present plans to enter into any contract, undertaking, agreement or arrangement with respect to the transfer, assignment, resale or distribution of any of the Shares. |
5. | Acceptance of Subscription. |
(a) |
It is understood that this subscription is not binding upon the Company until accepted by the Company, and that the Company has the right to accept or reject this subscription, in whole or in part, in its sole and complete discretion. If this subscription is rejected in whole, the Company shall return to Buyer, without interest, the Payment tendered by Buyer, in which case the Company and Buyer shall have no further obligation to each other hereunder. In the event of a partial rejection of this subscription, Buyer’s Payment will be returned to Buyer, without interest, whereupon Buyer agrees to deliver a new payment in the amount of the purchase price for the number of Shares to be purchased hereunder following a partial rejection of this subscription. |
6. | Governing Law. |
(a) |
This Subscription Agreement shall be governed and construed in all respects in accordance with the laws of the State of California without giving effect to any conflict of laws or choice of law rules. |
IN WITNESS WHEREOF, this Subscription Agreement has been executed and delivered by the Buyer and by the Company on the respective dates set forth below.
By: ______________________________________________
Signature of Buyer
By: ______________________________________________
Printed Name
Date: ______________________
INVESTOR SUBSCRIPTION AGREEMENT ACCEPTED AS OF:
This _____ day of _________________, 20____.
SHE Beverage Company, Inc.
By: _____________________________________________
Lupe Rose, President
Deliver completed Subscription Agreements and check to:
SHE Beverage Company, Inc.
42601 8th Street West Suite 108
Lancaster CA 93534
2 |
Exhibit 23.1
To Whom It May Concern:
We hereby consent to the use in the Registration Statement of SHE Beverage Company, Inc. on Form S-1, filed on or about January 13, 2020, of our Report of Independent Registered Public Accounting Firm, dated January 10, 2020, on the consolidated balance sheets of SHE Beverage Company, Inc. as of December 31, 2018 and 2017 and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the years then ended and the related notes, which appear in such Registration Statement.
We also consent to the references to us under the headings “Experts” in such Registration Statement.
/s/ Pinnacle Accountancy Group of Utah a dba of Heaton & Company, PLLC
Pinnacle Accountancy Group of Utah (a dba of Heaton & Company, PLLC)
Farmington, UT
January 13, 2019
Exhibit A
Talent Outline Plan #1
This Talent Outline Plan (“TOP”) is hereby incorporated as Exhibit A of the Sourced Talent Agreement (“Agreement”) between Toptal, LLC, (“Toptal”) and SHE Beverage Company, Inc (“Client”) with an effective date on or about October 14, 2019. This TOP becomes effective on November 25, 2019 (“Effective Date”). This TOP is subject to the terms of the Agreement that do not directly conflict with the terms of this TOP. Section 9.6 of the Agreement sets forth how any conflict with the terms of the Agreement and this TOP are to be resolved.
A. | Description of Work: |
Finance Function Support
B. | Talent’s Name: |
George Mathew
C. | Client Contact: |
Sheila Crouch
D. | Talent Start Date: |
November 25, 2019
E. | Trial Period: |
Duration: 5 business days
End Date: November 29, 2019
F. | Fees |
$5568. 00/week per full-time (40hs)1
$2784.00/week per part-time (20hs)1
$174.00 / hour
1 - The hourly equivalent will be applied for any extra hour of weekly engagements.
* 3% Discount will be applied on the invoice if client uses ACH or Wire (applicable to US based clients only).
Toptal, LLC | Client: | |||
By: | /s/ Brenda Kurz | By: | /s/ Sheila Crouch | |
Name: | Brenda Kurz | Name: | Sheila Crouch | |
Title: | Chief Administrative Officer | Title: | Chairman of Finance |
Toptal, LLC Confidential and Proprietary | Page 1 |
Client TOP 20190424 |
F5FRGJJ7 95VVJAF8NJNRFH | Easy Online Document Signing |
Sheila Crouch | ||
Party ID: CRW5S4JY73G22XNXEFHSFF | ||
IP Address: 98.152.172.93 | ||
VERIFIED EMAIL: sheila@shebeverages.com | ||
Multi-Factor Digital Fingerprint Checksum |
15cf743bede2254812ed654e241aaba285324b2c |
Timestamp | Audit |
2019-11-14 14:09:03 -0800 |
All parties have signed document. Signed copies sent to: Fernando Añasco, Sheila Crouch, and Toptal. |
2019-11-14 14:09:02 -0800 | Document signed by Sheila Crouch (sheila@shebeverages.com) with drawn signature. - 98.152.172.93 |
2019-11-14 13:09:00 -0800 | Document viewed by Sheila Crouch (sheila@shebeverages.com). - 98.152.172.93 |
2019-11-14 06:12:17 -0800 | Document created via the RightSignature API by Toptal (lavinia@toptal.com). - 35.185.125.162 |
Page 1 of 1 |
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