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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 1, 2023

 

LQR HOUSE INC.

(Exact name of registrant as specified in its charter)

 

Nevada   001-41778   86-1604197
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification Number)

 

6800 Indian Creek Dr. Suite 1E
Miami Beach, Florida
  33141
(Address of principal executive offices)   (Zip Code)

 

(786) 389-9771

(Registrant’s telephone number, including area code)

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.0001 par value per share   LQR   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Domain Name Transfer Agreement

 

On November 1, 2023, LQR House Acquisition Corp. (the “Buyer”), a subsidiary of LQR House Inc. (the “Company” or “LQR”), and SSquared Spirits LLC (the “Seller”) entered into a Domain Name Transfer Agreement (“Agreement”). Pursuant to the Agreement, the Seller irrevocably sold, assigned, transferred, and conveyed to the Buyer (a) all right, title, and interest in and to the domain name www.cwspirits.com (the “Domain Name”), including its current registration with GoDaddy.com, and (b) any other rights (including, but not limited to, trademark rights associated with the Domain Name in any jurisdiction, all Internet traffic through the Domain Name and all Website Content (as defined in the Agreement) the Seller may have in the Domain Name, together with any goodwill associated therewith in exchange for the payment by the Buyer of the purchase price of $10,000.

 

The Company’s Chief Executive Officer, Sean Dollinger, owns 50% of the equity of the Seller. A Special Committee of the Company’s Board of Directors consisting of all independent directors approved the terms of the Agreement on November 1, 2023.

 

KBROS Management Agreement

 

In connection with the Company’s purchase of the Domain Name, on November 1, 2023, the Company entered into a management and operation agreement (the “Management Agreement”) with KBROS LLC (“KBROS”). Pursuant to Management Agreement, KBROS shall provide the Company with management services relating to the sale of spirits and other beverage products through the website associated with the domain name www.cwspirits.com, which is owned by the Company, including, but not limited to (1) performance of all functions necessary for the operation of the website other than the promotion and marketing of the products sold through the website which shall be the sole and exclusive responsibility of the Company; (2) procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the products and compliance with all laws, rules and regulations applicable thereto and to the operation of the website; (3) fulfillment of orders placed through the website; (4) maintenance at its expense of an inventory of products sufficient to fulfill all orders placed through the website; maintain financial statements; and (5) other services set forth in the Management Agreement. The Company retains the responsibility to provide marketing services; and respond and handle all complaints, charge backs, refunds and disputes for customers of the website.

 

Pursuant to the Management Agreement, the Company will pay KBROS a monthly fee of $40,000. KBROS is entitled to additional monthly payments in an amount equal to $100,000 for each $1,000,000 of gross revenue generated through sales made on or through the website associated with the domain name www.cwspirits.com (or any successor website) (“Website Revenue”) for such calendar month. Website Revenue will be subject to adjustment based on the actual amounts reported in the Company’s quarterly and annual reports filed with the U.S. Securities and Exchange Commission (the “SEC”). However, in no event shall the total amount of such additional payments paid to the KBROS in any one fiscal year may exceed $5,000,000.00.

 

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The Management Agreement has a 10-year term, but can be terminated by the Company at any time with 30 days written notice and any either party in case of material breach by another party, their bankruptcy, or other events.

 

The foregoing summary does not purport to be complete and is qualified in its entirety by the Agreement and KBROS Management Agreement, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectfully, and are incorporated herein by reference.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On November 1, 2023, on the approval and recommendation of the Special Committee and Compensation Committee of the Board, the Company entered into an amendment (the “Amendment”) to the employment agreement (the “Employment Agreement”) between the Company and Sean Dollinger, its Chief Executive Officer, dated March 29, 2023.

 

The Amendment amends Sections 3(a) and (f) of the Employment Agreement in order to 1) increase Mr. Dollinger’s annual base salary from $250,000 to $540,000 and eliminate automatic 5% annual increase of his salary; 2) change Mr. Dollinger’s bonus structure and to provide him with the right to receive the following types of bonuses:

 

(i)an annual incentive bonus as determined by the Board of Directors within thirty (30) days of the filing of the Company's annual reports with the SEC; and

 

(ii)a monthly performance bonuses (the "Bonuses"), payable on or before the fifteenth (15th) day of the calendar month immediately following the calendar month with respect to which the amount of the performance bonus is determined, commencing with the calendar month ending on November 30, 2023, in an amount equal to $100,000.00 for each $1,000,000.00 of gross revenue generated Website Revenue for such calendar month. As stated in Item 1.01 above, Website Revenue will be subject to adjustment based on the actual amounts reported in the Company’s quarterly and annual reports filed with the SEC.

 

The foregoing summary does not purport to be complete and is qualified in its entirety by the Amendment, copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

 

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Item 7.01. Regulation FD Disclosure.

 

On November 1, 2023, the Company issued a press release announcing the acquisition of www.cwspirits.com, one of the established websites in wine and spirits e-commerce in the USA, granting access to a dedicated customer base of over 125,000. A copy of the release is furnished as Exhibit 99.1 and incorporated herein by reference.

 

The information under Item 7.01 of this Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, or incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
10.1   Domain Name Transfer Agreement between LQR House Acquisition Corp. and SSquared Spirits LLC dated November 1, 2023
10.2   Amendment to the Employment Agreement by and between the Company and Sean Dollinger dated November 1, 2023
10.3   Management Agreement between the Company and KBROS, LLC dated November 1, 2023
99.1   Press release of the Company dated November 1, 2023
104   The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

 

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SIGNATURES

 

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

 

  LQR HOUSE INC.
     
Dated: November 6, 2023 By: /s/ Sean Dollinger
  Name:  Sean Dollinger
  Title: Chief Executive Officer

 

 

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Exhibit 10.1

 

Domain Name Transfer Agreement

 

This Domain Name Transfer Agreement (“Agreement”), dated as of November 1, 2023, is by and between SSquared Spirits LLC (“Seller”), and LQR Acquisition Corp. (“Buyer”).

 

RECITALS

 

WHEREAS, Seller is the owner of all right, title, and interest in the domain name www.cwspirits.com (the “Domain Name”) and is the registrant of the Domain Name with GoDaddy.com (the “Registrar”);

 

WHEREAS, Buyer wishes to acquire all right, title, and interest in the Domain Name and the registration thereof; and

 

WHEREAS, the parties have agreed to Seller’s sale of the Domain Name to Buyer on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Domain Name Assignment. In consideration of the Purchase Price (as defined below), Seller hereby irrevocably sells, assigns, transfers, and conveys to Buyer:

 

(a) all right, title, and interest in and to the Domain Name, including the current registration thereof with GoDaddy.com; and

 

(b) any other rights (including, but not limited to, trademark rights associated with the Domain Name in any jurisdiction, all Internet traffic through the Domain Name and all Website Content (as defined below)) Seller may have in the Domain Name, together with any goodwill associated therewith.

 

(c) “Transferred Assets” means the assets specified in Sections 1(a) and 1(b) hereof.

 

(d) “Website Content” means: (i) the copyrights to any and all web pages and content of the web pages constituting the website associated with the Domain Name (the “Website”); (ii) page layouts for the Website; (iii) all graphics used on the Website; (iv) all databases generated for the Website; (v) online forms and scripts used at the Website; (vi) all banner and other advertisements for the Website; (vii) all social media accounts using the names “cwspirits,” “Country Wine & Spirits,” or any variation of those names or the Domain Name; (viii) all related account information, including, without limitation, user names, passwords and login information; and (ix) any other login credentials related to any of the foregoing.

 

 

 

 

2. No Assumed Liabilities. Buyer shall not be required to and shall not assume or perform or discharge any liabilities of Seller, whether related or unrelated to the Transferred Assets, and Seller shall solely be responsible for any such liabilities.

 

3. Purchase Price.

 

(a) In consideration of Seller’s sale and transfer of the Transferred Assets and Seller’s other agreements hereunder, Buyer shall pay Seller Ten Thousand Dollars ($10,000.00) (the “Purchase Price”) in accordance herewith.

 

(b) Buyer shall pay the Purchase Price simultaneously with the parties’ full execution of this Agreement. Buyer shall make payment in US dollars by wire transfer of immediately available funds to the account designated by Seller.

 

4. Transfer of Domain Name.

 

(a) Upon receipt of the Purchase Price, Seller shall execute all documents, papers, forms, and authorizations, and take such other actions as are necessary to effectuate the transfer of ownership and control of the Domain Name to Buyer, and cause the Domain Name to be registered in the name of Buyer with the Registrar.

 

(b) The Domain Name will be deemed transferred (“Transfer”) when:

 

(i) Registrar has confirmed the transfer in accordance with its procedures therefor;

 

(ii) the applicable WHOIS database identifies Buyer as the registrant of the Domain Name; and

 

(iii) the Buyer has administrative and technical access to the Domain Name, and sole control over where the Domain Name points.

 

5. Other Agreements of Seller.

 

(a) Seller shall not register, acquire, or otherwise use any domain name or trademark incorporating the Domain Name or any mark or name that is confusingly similar thereto.

 

(b) Seller shall immediately following the full execution of this Agreement cease and forever desist from using the Domain Name or any mark or name confusingly similar thereto, including but not limited to as a trademark, trade name, business name, or service mark.

 

(c) Seller acknowledges and agrees that the proceeds of all sales made through the Website shall from and after the date hereof shall be paid to Buyer.

 

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6. Representations and Warranties of Seller. Seller represents and warrants to Buyer that as of the date hereof:

 

(a) Seller has the full right, power, and authority to enter into this Agreement and perform its obligations thereunder; the execution of this Agreement by Seller has been duly authorized by all necessary organizational action of Seller; and when executed and delivered by both parties this Agreement will constitute the legal, valid, and binding obligation of Seller enforceable against Seller in accordance with its terms and conditions.

 

(b) Seller is the sole registrant, owner, and user of all right, title, and interest in and to the Transferred Assets (including, without limitation, the Domain Name), free and clear of liens, security interests, and other encumbrances. The registration agreement for the Domain Name is in full force and effect, and all registration fees are paid in full for registration through date of expiration thereof. Seller has at all times been and remains in full compliance with such registration agreement.

 

(c) Seller has not taken any action or entered into any agreement for Seller to, or requiring Buyer to, assign, transfer, license, or grant to any other person or entity the right to use any of the Transferred Assets (including, without limitation, the Domain Name) or that otherwise encumbers any of the Transferred Assets (including, without limitation, the Domain Name);

 

(d) Seller’s registration, ownership, and use of the Transferred Assets (including, without limitation, the Domain Name) do not infringe, misappropriate, dilute, or otherwise violate any] right, including any intellectual property right, of any other person or entity. No action has been instituted, settled, or, to Seller’s knowledge, threatened that alleges any such infringement, misappropriation, dilution, or other violation and Seller has not received any communication asserting any such allegations.

 

7. Representations and Warranties of Buyer. Buyer represents and warrants to Seller that as of the date hereof Buyer has the full right, power, and authority to enter into this Agreement and perform its obligations hereunder; the execution of this Agreement has been duly authorized by all necessary organizational action of Buyer; and when executed and delivered by both parties this Agreement will constitute the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms and conditions.

 

8. Indemnification.

 

(a) Seller shall defend, indemnify, and hold harmless Buyer, Buyer’s affiliates and their respective shareholders, directors, officers, and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs, and expenses, including attorneys’ fees and disbursements arising out of or resulting from any third-party claim, suit, action, or proceeding (each, a “Claim”) related to or arising out of: (a) any breach by Seller of any of its representations, warranties, and obligations hereunder; or (b) Seller’s use of any of the Transferred Assets, including, without limitation, the Domain Name.

 

(b) The indemnified party shall promptly notify the indemnifying party in writing of any Claim and cooperate with the indemnifying party at the indemnifying party’s sole cost and expense. The indemnifying party shall immediately take control of the defense and investigation of such Claim, and shall employ counsel of its choice to handle and defend the same, at the indemnifying party’s sole cost and expense. The indemnifying party shall not settle any Claim without the indemnified party’s prior written consent (which shall not be unreasonably withheld or delayed). The indemnified party’s failure to perform any obligations under this Section 8(b) will not relieve the indemnifying party of its obligations under Section 8(a) except to the extent that the indemnifying party can demonstrate that it has been prejudiced as a result of such failure. The indemnified party may participate in and observe the proceedings at its own cost and expense.

 

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9. Equitable Remedies. Seller acknowledges that a breach or alleged breach by Seller under this Agreement would cause Buyer immediate and irreparable harm for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by Seller of any such obligations, Buyer will, in addition to any and all other rights and remedies that may be available in respect of such breach, be entitled to equitable relief, including in the form of preliminary or permanent injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).3

 

10. Miscellaneous.

 

(a) This Agreement shall be governed by and construed in accordance with the laws of the United States and the internal laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction). Each party irrevocably submits to the exclusive jurisdiction and venue of the federal and state courts located in the Palm Beach County, Florida, in any legal suit, action, or proceeding arising out of or based upon this Agreement.

 

(b) This Agreement shall be binding upon and shall inure to the benefit of Seller and Buyer and their respective successors and assigns.

 

(c) This Agreement, and all related exhibits and schedules, constitutes the sole and entire agreement of the parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

 

(d) This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance.

 

(e) This Agreement may be executed in multiple counterparts and by facsimile signature, each of which shall be deemed an original and all of which together shall constitute one instrument. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

  SSQUARED SPIRITS LLC
     
  By /s/ Shawn Kattoula
  Name:  Shawn Kattoula
  Title: Pres

 

  LQR HOUSE ACQUISITION CORP.
     
  By /s/ Kumar Abhishek
  Name: Kumar Abhishek
  Title: Director Finance

 

 

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Exhibit 10.2

 

Amendment to Employment Agreement

 

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made and entered into effective as of November 1, 2023 (the “Amendment Effective Date”), by and between LQR House Inc., a Nevada corporation (the “Company”), and Sean Dollinger (the “Executive” and, together with the Company, the “Parties”).

 

Whereas, the Company and Executive entered into that certain Employment Agreement (the “Agreement”) dated as of March 29, 2023, and

 

Whereas, the Parties desire to amend Sections 3(a) and (f) of the Agreement in the manner reflected herein, and

 

Whereas, the Compensation Committee of the Board of Directors of the Company has approved the amendment of the Agreement in the manner reflected herein,

 

Now Therefore, in consideration of the premises and mutual covenants and conditions herein, the Parties, intending to be legally bound, hereby agree as follows, effective as of the Amendment Effective Date:

 

1. Salary. The first sentence of Section 3(a) of the Agreement is hereby deleted and replaced in its entirety with the following: “An annual base salary (the “Base Salary”) of $540,000.00.”

 

2. Bonus. Section 3(f) of the Agreement is hereby deleted and replaced in its entirety with the following: “In addition to the Base Salary, the Executive shall be entitled to: (i) an annual incentive bonus as determined by the Board of Directors within thirty (30) days of the filing of the Company’s annual reports with the U.S. Securities and Exchange Commission (the “SEC”); and (ii) monthly performance bonuses, payable on or before the fifteenth (15th) day of the calendar month immediately following the calendar month with respect to which the amount of the performance bonus is determined, commencing with the calendar month ending on November 30, 2023, in an amount equal to One Hundred Thousand Dollars ($100,000.00) for each One Million Dollars ($1,000,000.00) of gross revenue generated through sales made on or through the website associated with the domain name www.cwspirits.com (or any successor website) (“Website Revenue”) for such calendar month; provided, that, within fifteen (15) days of the filing of each of the Company’s quarterly reports with the U.S. Securities and Exchange Commission (the “SEC”), the amount of such bonuses for the months during the applicable fiscal quarter shall be adjusted, upwards or downwards, as the case may be, based on the Website Revenue for the applicable quarter as reported by the Company in its quarterly filing with the SEC for such quarter. Any such downwards adjustment shall require the Executive to pay the amount of such downwards adjustment to the Company within ten (10) days of the determination of such adjustment. Any such upwards adjustment shall require the Company to pay the amount of such upwards adjustment to the Executive within ten (10) days of the determination of such adjustment.”

 

3. Counterparts. This Amendment may be executed in one or more facsimile, electronic or original counterparts, each of which shall be deemed an original and both of which together shall constitute the same instrument.

 

4. Ratification. All terms and provisions of the Agreement not amended hereby, either expressly or by necessary implication, shall remain in full force and effect. From and after the Amendment Effective Date, all references to the term “Agreement” in this Amendment or the original Agreement shall include the terms contained in this Amendment.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment to Employment Agreement effective as of the Amendment Effective Date.

 

  COMPANY:
     
  LQR HOUSE INC.
     
  By: /s/ Kumar Abhishek
    Name:  Kumar Abhishek
    Title: CFO

 

  EXECUTIVE:
   
  /s/ Sean Dollinger
  Sean Dollinger

 

 

 

 

Exhibit 10.3

 

MANAGEMENT AGREEMENT

 

This MANAGEMENT AND OPERATIONS AGREEMENT (this “Agreement”) is made as of November 1, 2023 (the “Effective Date”), by and between LQR HOUSE, INC. (the “Company”), a Nevada corporation, and KBROS, LLC, (the “Manager”), a California corporation.

 

RECITALS

 

WHEREAS, the Company desires to engage the Manager to provide the Management Services (as defined below), and the Manager desires to provide the Management Services on the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1. Management Services.

 

Commencing on the date of this Agreement, Manager shall provide to the Company the following services relating to the sale of spirits and other beverage products (the “Products”) through the website associated with the domain name www.cwspirits.com (together with any successor thereto, the “Website”) which is owned by the Company (the “Business” and such services the “Management Services”):

 

a.Performance of all functions necessary for the operation of the Business other than the promotion and marketing of the products sold through the Website which shall be the sole and exclusive responsibility of the Company (“Marketing”);

 

b.Acquisition of and delivery to the Company of all copy, images, graphics and other materials from manufacturers and distributors of the Products, and all rights and permissions related thereto as are necessary for Marketing;

 

c.Delivery to the Company of such plans, forecasts and reports as the Company may reasonably request;

 

d.Procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the Products and compliance with all laws, rules and regulations applicable thereto and to the operation of the Website;

 

e.Fulfillment shall order for Products placed through to the Website;

 

f.So long as the Manager has possession of any personal data of any individual as defined under applicable laws, rules and regulations (together with any such data in the possession of third party vendors engaged by the Manager, “Personal Data”), maintenance and implementation of appropriate administrative, technical and physical safeguards and plans to: (i) maintain the security of the Website and the security and confidentiality of all Personal Data; (ii) implement reasonable safeguards to protect against threats or hazards to the security or integrity of the Website and Personal Data; and (iii) implement reasonable safeguards to protect against unauthorized access to or use of the Website or Personal Data. The Manager shall provide the Company on reasonable request with copies of such plans or with summaries of key provisions of such plans;

 

 

 

g.Maintenance at its expense of an inventory of Products sufficient to fulfill all orders placed through the website on a timely basis;

 

h.Manager shall prepare and maintain financial records sufficient for the Company to prepare its financial statements in accordance with U. S. generally accepted accounting principles and shall deliver to the Company such reports and information as may be requested by Company from time to time;

 

i.Selection and employment of all personnel necessary to service the Business; and

 

j.Maintain the assets of the Company in good repair, order and condition, normal and reasonable wear and tear excepted.

 

2. Obligations of the Company.

 

The Company shall:

 

a.provide the Marketing Services; and

 

b.respond and handle all complaints, charge backs, refunds and disputes for customers of the Website.

 

3. Additional Agreements of the Manager.

 

The Manager agrees that at all times during the term of this Agreement it shall, to the extent the Company has adequate funds thereto:

 

a.do nothing, and permit nothing to be done (which is within the control of the Manager), which will or might cause the Business or the Company to operate in an improper or illegal manner.

 

b.not cause a default in any of the terms, conditions and obligations of any of the contracts and other agreements of the Company.

 

c.allow the Company and its employees, attorneys, accountants and other representatives of the Company, full and free access to its books and records, and all of the facilities of the Manager relating to the Business.

 

4. Compensation.

 

a.Base Compensation

 

While Manager is employed by the Company hereunder and as otherwise provided in this Agreement, the Company shall pay to Manager a monthly fee in the amount of $40,000, payable in advance, with the first payment being due and payable on December 1, 2023 and each succeeding payment being due and payable on the first day of each succeeding calendar quarter during the term of this Agreement (“Base Compensation”).

 

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b.Incentive Compensation. In addition to the Base Compensation, the Manager shall be entitled to monthly incentive payments (the “Incentive Payments”), payable on or before the fifteenth (15th) day of the calendar month immediately following the calendar month with respect to which the amount of the incentive payment is determined, commencing with the calendar month ending on November 30, 2023, in an amount equal to One Hundred Thousand Dollars ($100,000.00) for each One Million Dollars ($1,000,000) of gross revenue generated through sales made on or through the website associated with the domain name www.cwspirits.com (or any successor website) (“Website Revenue”) for such calendar month; provided, that, within fifteen (15) days of the filing of each of the Company’s quarterly reports with the U.S. Securities and Exchange Commission (the “SEC”), the amount of such incentive payment for the months during the applicable fiscal quarter shall be adjusted, upwards or downwards, as the case may be, based on the Website Revenue for the applicable quarter as reported by the Company in its quarterly filing with the SEC for such quarter. Any such downwards adjustment shall require the Manager to pay the amount of such downwards adjustment to the Company within ten (10) days of the determination of such adjustment. Any such upwards adjustment shall require the Company to pay the amount of such upwards adjustment to the Manager within ten (10) days of the determination of such adjustment. Notwithstanding the foregoing, in no event shall the total amount of the Incentive Payments paid to the Manager in any one fiscal year exceed Five Million Dollars ($5,000,000.00).”

 

c.Expenses

 

While Manager is employed by the Company hereunder, the Company shall reimburse Manager for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by it in the performance of its duties and responsibilities hereunder, subject to the Company’s normal policies and procedures for expense verification and documentation.

 

5. Term of Agreement; Termination of Rights.

 

a.Term. The term of this Agreement shall commence on the Effective Date of this Agreement and continue until the tenth (10th) anniversary of the Effective Date, unless terminated earlier as set forth herein (the Term”).

 

b.Termination. This Agreement may be terminated by the Parties as follows:

 

i.The Company may terminate this Agreement for convenience with thirty (30) days prior written notice to the Manager at any time;

 

ii.any Party may terminate this Agreement if any other Party is in material breach of any of its obligations under this Agreement and fails to cure such breach within thirty (30) days after receiving written notice from any non-breaching Party of the existence of such breach; and

 

iii.any Party may terminate this Agreement if any other Party becomes bankrupt, enters into a composition with its creditors, has a receiver appointed for its assets, or becomes the subject of any winding up of its business or any judicial proceeding relating to or arising out of its financial condition.

 

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6. Indemnification.

 

6.1 By the Manager. The Manager shall defend, indemnify and hold the Company, its officers, directors, shareholders, employees, attorneys and agents harmless with respect to any and all claims, damages and expenses of every kind or nature whatsoever, including reasonable attorneys’ fees, arising from or relating to claims of third parties relating to any breach of this Agreement by the Manager or to the operation of and transactions effected through, the Website, except to the extent subject to indemnification by the Company under Section 5.2.

 

6.2 By the Company. The Company shall defend, indemnify and hold the Manager, its officers, directors, shareholders, employees, attorneys and agents harmless with respect to any and all claims, damages and expenses of every kind or nature whatsoever, including reasonable attorneys’ fees, arising from or relating to claims of third parties relating to any breach of this Agreement by the Company.

 

7. Miscellaneous

 

7.1 Status of Parties. In all matters relating to this Agreement, each Party is an independent contractor and not an employee or agent of any other Party. No Party shall have authority, express or implied, to assume or create any obligation on behalf of any other Party, or to represent any other Party as agent, employee, or in any other capacity in any manner whatsoever. Nothing contained in this Agreement shall be construed or applied to create a partnership.

 

7.2 Notices. All notices permitted or required by this Agreement shall be in writing, and shall be deemed to have been delivered and received (i) when personally delivered, (ii) on the fifth (5th) business day after the date on which deposited in the mail, airmail postage prepaid, certified or registered mail, return receipt requested, or (iii) when delivered if sent by recognized express commercial delivery service (e.g., Federal Express, DHL, etc.), addressed to the Party for whom intended at the address set forth below, or at such other address for which notice has been delivered in a manner permitted by this Section 7.2.

 

If to the Company:

 

6800 INDIAN CREEK DR,

UNIT 101,

MIAMI BEACH FL 33141

 

If to the Manager:

 

1350 Main St 2127

Ramona CA 92065

 

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7.3 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes any and all prior agreements and arrangements, whether written or oral, that may exist between the Parties with respect to the subject matter hereof. This Agreement may not be amended, supplemented or otherwise modified except by a writing duly executed by the Parties.

 

7.4 Binding Effect: Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Each Party may assign this Agreement and its rights hereunder to an affiliate of that Party or in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of that Party’s assets relating to its business activities under this Agreement; provided that an assignment shall not relieve the assigning Party of its obligations hereunder.

 

7.5 Non-Waiver. The failure in any one or more instances of a Party to insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege in this Agreement conferred, or the waiver by said Party of any breach of any of the tem1s, covenants or conditions of this Agreement, shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving Party.

 

7.6 Counterparts; Electronic Signature. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.

 

7.7 Severability. The invalidity of any provision of this Agreement or portion of a provision shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision.

 

7.8 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of law principles. Each party irrevocably submits to the exclusive jurisdiction and venue of the federal and state courts located in the Palm Beach County, Florida, in any legal suit, action, or proceeding arising out of or based upon this Agreement.

 

7.9 Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. This Agreement has been negotiated by the respective Parties hereto with full opportunity to obtain advice of their attorneys, and the Parties waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

 

5

 

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first above written.

 

COMPANY:  
     
LQR HOUSE, INC.  
   
By: /s/ Kumar Abhishek  
Name: Kumar Abhishek  
Title: Director Finance  
     
MANAGER:  
     
KBROS, LLC  
     
By: /s/ Shawn Kattoula  
Name: Shawn Kattoula  
Title: Pres  

 

 

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Exhibit 99.1

 

LQR House Strengthens Its Position by Acquiring Alcohol E-Commerce Platform, Enabling Direct Sales to Consumers

 

Wednesday, 01 November 2023 08:30

 

MIAMI BEACH, FL / ACCESSWIRE / November 1, 2023 / LQR House Inc. (the “Company” or “LQR House”) (NASDAQ:LQR), a leading marketing agency specializing in the spirits and beverage industry, is thrilled to announce the acquisition of www.cwspirits.com, one of the most established websites in wine and spirits e-commerce in the USA, granting access to a dedicated customer base of over 125,000.

 

With this acquisition, LQR House can expand its portfolio and strategically position a wider range of brands to cater to the diverse preferences of consumers. While LQR House has predominantly focused on marketing innovative and unique brands, this acquisition now enables the company to collaborate with more mainstream and well-known brands, delivering their products to an extremely dedicated audience, with the expectation of boosting sales on the platform.

 

LQR House has a team with over 20 years of e-commerce experience, specializing in website management, design, development, email marketing, and search engine optimization (“SEO”). By owning an alcohol ecommerce platform, the company gains even more control in positioning brands. Through its proprietary SEO methods, LQR House will work to ensure that CWSpirits.com ranks in premium positions on Google, regardless of the user’s location in the USA, for top-selling brands and its innovative and unique brands.

 

CWSpirits.com has earned its reputation as a platform that enables consumers to discover a wide range of offerings, from exciting new releases, exclusive limited editions, celebrity-affiliated brands, and thoughtfully curated cocktail and mixology content to unique bespoke gifting options. This acquisition is a win-win, benefiting not only LQR House’s marketing clients but also alcohol suppliers by affording them better access to a premier consumer-centric platform for marketing and distributing their brands directly to end users. It’s worth noting that CWSpirits.com is not just a destination for rare finds; it also boasts one of the most extensive collections of mainstream alcohol available online.

 

Sean Dollinger, CEO of LQR House, expressed his excitement about the acquisition, stating, “This really gives us the competitive advantage as we can now see everything from A-Z. We always knew that our partnership with CWSpirits.com was super valuable, and we are so happy to now own the domain and show our investors that LQR House is a leading force in the alcohol space - when it comes to alcohol marketing and sales. “

 

About LQR House Inc.

 

LQR House is a premier marketing agency specializing in the spirits and beverage industry. With an in-depth understanding of market dynamics and an unwavering commitment to innovation, LQR House empowers brands to excel in a fiercely competitive landscape. The company’s expertise encompasses brand development, pioneering marketing strategies, and dynamic influencer partnerships, facilitating clients in achieving their objectives and reaching unprecedented heights. Notably, LQR House distinguishes itself by crafting unique and tailored marketing solutions for alcohol brands. Moreover, the company has forged an exclusive partnership with the specialized alcohol beverage e-commerce platform, CWSpirits.com. This strategic collaboration enables LQR House to measure the return on investment (ROI) of its campaigns by directly correlating them with sales, leveraging AI on CWSpirits.com to enhance the customer experience and consistently drive conversions.

 

Forward-Looking Statements

 

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Shareholders can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and the completion of the initial public offering on the anticipated terms or at all, and other factors discussed in the “Risk Factors” section of the registration statement on Form S-1 filed with the SEC. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement on Form S-1 and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov.

 

Investor and Media Contact:
info@lqrhouse.com

 

SOURCE: LQR House Inc.