As filed with the Securities and Exchange Commission on August 4, 2015. | Registration No._______ |
NEVADA
|
5699
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80-0250289
|
||
(State or jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer
|
||
incorporation or organization)
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Classification Code Number)
|
Identification No.)
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Large accelerated filer
|
o
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Accelerated filer
|
o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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Title of each class of
Securities to be
Registered
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Amount of
Shares to be
Registered (1)
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Proposed
Maximum offering
Price per share (2)
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Proposed
Maximum
Aggregate offering
Price
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Amount of
Registration
Fee
|
|||||
Common Stock
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72,858,608
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$0.037
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$2,695,768.50
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$313.25
|
|||||
Total
|
72,858,608
|
$0.037
|
$2,695,768.50
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$313.25
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(1)
|
Pursuant to Rule 416 under the Securities Act of 1933, as amended, the shares being registered hereunder include such indeterminate number of shares of common stock, as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.
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(2)
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Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, using the average high and low price for the registrant’s common stock reported by the OTCQB of the OTC Markets Group Inc. on August 4, 2015.
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Page
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||
PROSPECTUS SUMMARY
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1
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SUMMARY FINANCIAL INFORMATION
|
3
|
|
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
|
4
|
|
RISK FACTORS
|
5
|
|
USE OF PROCEEDS
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11
|
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DILUTION
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11
|
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SELLING SECURITY HOLDERS
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12
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PLAN OF DISTRIBUTION
|
13
|
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DESCRIPTION OF SECURITIES
|
14
|
|
INTEREST OF NAMED EXPERTS AND COUNSEL
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16
|
|
DESCRIPTION OF BUSINESS
|
17
|
|
DESCRIPTION OF PROPERTY
|
19
|
|
SHELL COMPANY STATUS
|
20
|
|
LEGAL PROCEEDINGS
|
20
|
|
MARKET FOR COMMON EQUITY AND OTHER RELATED STOCKHOLDER MATTERS
|
20
|
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MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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21
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CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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28
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DIRECTORS, EXECUTIVE OFFICER, AND CONTROL PERSONS
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28
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EXECUTIVE COMPENSATION
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30
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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30
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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30
|
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REPORTS TO SECURITY HOLDERS
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31
|
|
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES
|
31
|
|
FINANCIAL STATEMENTS
|
F-1
|
Common stock offered by selling security holders
Common stock outstanding before the offering
Common stock outstanding after the offering
Terms of the Offering
Termination of the Offering
Trading Market
Use of proceeds
Need for Additional Financing:
Risk Factors
|
72,858,608 shares of common stock. This number represents 22 (%) percent of our current outstanding common stock as of August 4, 2015.
327,682,980 common shares as of August 4, 2015.
327,682,980 shares.
The selling stockholders will determine when and how they will sell the common stock offered in this prospectus. The selling stockholders will sell at prevailing market prices through the OTCQB marketplace, or such other markets as may be offered by the OTC Markets Group or other national exchange that we may apply to following the effective date of the registration statement of which this prospectus is a part, or at privately negotiated prices in transactions that are not in the public market.
The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations and without the requirement for the Company to be in compliance with the current public information requirement pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), or any other rule of similar effect.
Our common stock is quoted on the OTCQB under the market symbol “JABA”.
We are not selling any shares of the common stock covered by this prospectus.
We believe that we may need to raise additional capital in the future.
An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” on page 5 and the other information contained in this prospectus before making an investment decision regarding our common stock
|
JUNE 30, 2015 (UNAUDITED)
|
DECEMBER 31, 2014
|
|||||||
ASSETS
|
||||||||
Cash
|
$
|
116,543
|
$
|
10,009
|
||||
Inventory
|
190,358
|
-
|
||||||
Fixed assets, net
|
1,799
|
2,024
|
||||||
TOTAL ASSETS
|
$
|
308,700
|
$
|
12,033
|
||||
LIABILITIES
|
||||||||
Accounts payable
|
$
|
146,473
|
$
|
138,473
|
||||
Accrued interest
|
58,602
|
33,777
|
||||||
Convertible debts payable
|
500,000
|
673,500
|
||||||
Derivative liability
|
1,114,300
|
200,337
|
||||||
TOTAL LIABILITIES
|
1,819,375
|
1,046,087
|
||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Preferred A stock, par value $0.001 per share, Authorized – 1,000 shares, Issued and outstanding – 1,000 and -0- shares, respectively
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1
|
-
|
||||||
Common stock, par value $0.001 per share, Authorized – 500,000,000 shares, Issued and outstanding – 327,772,980 and 252,952,540 shares, respectively
|
327,773
|
252,953
|
||||||
Additional paid-in capital
|
9,466,704
|
8,56,025
|
||||||
Accumulated deficit
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(11,305,153
|
)
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(9,851,032
|
)
|
||||
TOTAL STOCKHOLDERS’ DEFICIT
|
(1,510,675
|
)
|
(1,034,054
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
308,700
|
$
|
12,033
|
·
|
be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;
|
·
|
be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;
|
·
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be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended and instead provide a reduced level of disclosure concerning executive compensation; and
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·
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be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.
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Name Of Selling Stockholder (1)
|
Number Of
Shares
Beneficially
Owned
Prior To
Offering
|
Percentage Of
Outstanding
Shares
Owned
Prior To
Offering
|
Number Of
Shares
Offered
Pursuant
To This
Prospectus
|
Number Of
Shares
Beneficially
Owned After
The Offering (2)
|
Percentage of
Outstanding
Shares To Be
Owned After
The Offering(2)
|
Amanda Slayman
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1,000,000
|
*
|
500,000
|
500,000
|
*
|
Bonita Merriam (3)
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1,000,000
|
*
|
500,000
|
500,000
|
*
|
SJC Capital, LLC (4)
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Bill Dowling
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500,000
|
*
|
250,000
|
250,000
|
*
|
Bill Myers
|
1,000,000
|
*
|
500,000
|
500,000
|
*
|
Chin Cheong Wai
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Chris Margaritas
|
400,000
|
*
|
200,000
|
200,000
|
*
|
Crossline Community Church (5)
|
1,000,000
|
*
|
500,000
|
500,000
|
*
|
Capistrano Valley Christian Schools, Inc. (5)
|
1,000,000
|
*
|
500,000
|
500,000
|
*
|
Danny Myers
|
500,000
|
*
|
500,000
|
-
|
-
|
Darren Novak
|
250,000
|
*
|
250,000
|
-
|
-
|
Demetrios Tataridas
|
1,666,666
|
*
|
833,333
|
833,333
|
*
|
Dennis Hennesey
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Butera Family 1989 Trust (6)
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Eric H. Scheffey
|
50,000,000
|
15.26%
|
40,000,000
|
10,000,000
|
3.05%
|
Eric Rose
|
1,562,500
|
*
|
781,250
|
781,250
|
*
|
George J Powell, III
|
79,115,016
|
24.14%
|
10,000,000
|
69,115,016
|
21.09%
|
George J. Powell, IV (7)
|
500,000
|
*
|
500,000
|
-
|
-
|
Gregory Judah
|
500,000
|
*
|
250,000
|
250,000
|
*
|
James Heydorff
|
250,000
|
*
|
250,000
|
-
|
*
|
Jim Lang
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Jim Wand
|
1,000,000
|
*
|
1,000,000
|
-
|
-
|
Kelly Powell (7)
|
500,000
|
*
|
500,000
|
-
|
-
|
Kennedy Myers (7)
|
500,000
|
*
|
500,000
|
-
|
-
|
Luke Powell (8)
|
500,000
|
*
|
500,000
|
-
|
-
|
Kazarian Living Trust u/d/t 9/25/1990 (9)
|
2,000,000
|
*
|
1,000,000
|
1,000,000
|
*
|
Mary Travis
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Mike Gevertz
|
250,000
|
*
|
250,000
|
-
|
-
|
Mike Warren
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Nick Carbone
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Nicolette Powell (7)
|
500,000
|
*
|
500,000
|
-
|
-
|
Niko Kabylafkas
|
3,806,168
|
1.16%
|
1,332,159
|
2,474,009
|
1.16%
|
Patrick A Langlais
|
291,666
|
*
|
291,666
|
-
|
-
|
Pete Contos
|
3,604,752
|
1.10%
|
1,802,376
|
1,802,376
|
1.10%
|
Randa Havorka
|
500,000
|
*
|
500,000
|
-
|
-
|
Randy Schriewer
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Randy Travis
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Sam Hitman
|
2,083,333
|
*
|
1,041,667
|
1,041,667
|
*
|
Scott Wellman
|
500,000
|
*
|
250,000
|
250,000
|
*
|
Steve Kabylafkas
|
2,806,166
|
*
|
982,158
|
1,824,008
|
*
|
Terri Miller
|
500,000
|
*
|
500,000
|
-
|
-
|
Themistocles Papadimitropoulos
|
4,610,000
|
1.41%
|
1,844,000
|
2,766,000
|
1.41%
|
Tiffany Powell (7)
|
500,000
|
*
|
500,000
|
-
|
-
|
Warm Whispers Ministries, Inc.(5)
|
1,500,000
|
*
|
500,000
|
1,000,000
|
*
|
Chen Young
|
500,000
|
*
|
250,000
|
250,000
|
*
|
(1)
|
The selling stockholders may be deemed to be “underwriters” in connection with any sales covered by this prospectus.
|
(2)
|
If all shares offered for sale are sold by the selling shareholder.
|
(3)
|
Bonita Merriam is the mother in law to Mr. Powell, our CEO.
|
(4)
|
Bill Cvengros is the acting President of the SJC Capital LLC
|
(5)
|
Non-profit organization qualified under Internal Revenue Section 501(c)(3).
|
(6)
|
Ed Butera is the Trustee for the Butera Family 1989 Trust
|
(7)
|
Adult son or daughter of Mr. Powell, our CEO.
|
(8)
|
Luke Powell is a minor son of Mr. Powell, our CEO.
|
(9)
|
Marc E. Kazarian is the Trustee for the Kazarian Living Trust u/d/t 9/25/1990
|
|
·
|
on one or more exchanges or in the over-the-counter market (including the OTC Bulletin Board); or
|
|
·
|
in privately negotiated transactions.
|
1.
|
engage in any stabilization activities in connection with the shares;
|
|
|
2.
|
effect any sale or distribution of the shares until after the prospectus shall have been appropriately amended or supplemented, if required, to describe the terms of the sale or distribution; and
|
|
3.
|
bid for or purchase any of the shares or rights to acquire the shares or attempt to induce any person to purchase any of the shares or rights to acquire the shares, other than as permitted under the Securities Exchange Act of 1934.
|
·
|
any breach of the director’s duty of loyalty to us or to our stockholders;
|
·
|
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
|
·
|
unlawful payment of dividends or unlawful stock repurchases or redemptions; and
|
·
|
any transaction from which the director derived an improper personal benefit.
|
·
|
Exemptions for “emerging growth companies” from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;
|
·
|
Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934, as amended;
|
·
|
Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;
|
·
|
Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and
|
·
|
Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.
|
(i)
|
audited financial statements required for only two fiscal years (provided that “smaller reporting companies” such as the Company are only required to provide two years of financial statements);
|
(ii)
|
selected financial data required for only the fiscal years that were audited (provided that “smaller reporting companies” such as the Company are not required to provide selected financial data as required by Item 301 of Regulation S-K); and
|
(iii)
|
executive compensation only needs to be presented in the limited format now required for “smaller reporting companies”.
|
High
|
Low
|
|||||||
Fiscal Year Ended December 31, 2014
|
||||||||
Quarter ended December 31, 2014
|
$0.06
|
$0.02
|
||||||
Quarter ended September 30, 2014
|
$0.15
|
$0.0065
|
||||||
Quarter ended June 30, 2014
|
$0.015
|
$0.008
|
||||||
Quarter ended March 31, 2014
|
$0.018
|
$0.008
|
||||||
Fiscal Year Ended December 31, 2013
|
||||||||
Quarter ended December 31, 2013
|
$0.03
|
$0.012
|
||||||
Quarter ended September 30, 2013
|
$0.035
|
$0.008
|
||||||
Quarter ended June 30, 2013
|
$0.02
|
$0.006
|
||||||
Quarter ended March 31, 2013
|
$0.012
|
$0.01
|
·
|
we would not be able to pay our debts as they become due in the usual course of business; or
|
·
|
our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution
|
2015
|
2014
|
|||||||
Revenue, net
|
$
|
-
|
$
|
-
|
||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
608,684
|
2,484,147
|
||||||
Total operating expenses
|
608,684
|
2,484,147
|
||||||
Loss from operations
|
(608,684
|
)
|
(2,484,147
|
)
|
||||
Net loss
|
$
|
(608,684,
|
)
|
$
|
(2,484,147
|
)
|
2015
|
2014
|
|||||||
Revenue, net
|
$
|
-
|
$
|
-
|
||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
1,454,121
|
2,484,150
|
||||||
Total operating expenses
|
1,454,121
|
2,484,150
|
||||||
Loss from operations
|
(1,454,121
|
)
|
(2,484,150
|
)
|
||||
Net loss
|
$
|
(1,454,121,
|
)
|
$
|
(2,484,150
|
)
|
2014
|
2013
|
|||||||
Revenue, net
|
$
|
-
|
$
|
-
|
||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
2,371,038
|
57,949
|
||||||
Total operating expenses
|
2,371,038
|
57,949
|
||||||
Loss from operations
|
(2,371,038
|
)
|
(57,949
|
)
|
||||
Net loss
|
$
|
(2,371,038
|
)
|
$
|
(57,949
|
)
|
Carrying Value
|
Fair Value Measurements
Using Fair Value Hierarchy
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability – December 31, 2014
|
$
|
200,337
|
$
|
--
|
$
|
--
|
$
|
200,337
|
Balance at December 31, 2013
|
$
|
-
|
||
Initial measurement at issuance date of the notes
|
500,842
|
|||
Change in derivative liability during the year ended December 31, 2014
|
(300,505)
|
|||
Balance December 31, 2014
|
$
|
200,337
|
Name
|
Age
|
Position
|
Date
|
George J. Powell
|
63
|
Sole Director, Chief Executive Officer, Interim Chief Financial Officer, and Secretary
|
April 26, 2014
|
●
|
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
●
|
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
|
●
|
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
|
●
|
been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
●
|
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
●
|
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
Name and
Principal
Position
|
Title
|
Year
(1)
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
All other
Compensation
($)
|
Total
($)
|
George J. Powell, III
|
CEO, President and Chairman
|
2014
|
--
|
--
|
$1,412,110
|
--
|
--
|
$1,412,110
|
Name and Address Beneficial Owner (1)
|
No. of Shares Before Offering
|
No. of Shares After Offering
|
Percentage of Before Offering
|
Ownership After Offering
|
Eric H. Scheffey
1 Elm Street
Denver, CO 80220
|
50,000,000
|
10,000,000
|
15.26%
|
3.05%
|
George J Powell III
2300 Wing Point Lane
Plano, TX 75093
|
79,115,016
|
69,115,016
|
24.14%%
|
21.09%
|
Reports of Independent Registered Public Accounting Firm of K. Brice Toussaint
|
F-2
|
|||||||
Balance Sheets at December 31, 2014 and 2013
|
F-3
|
|||||||
Statements of Operations for the year ended December 31, 2014 and 2013
|
F-4
|
|||||||
Statements of Cash Flows for the year ended December 31, 2014 and 2013
|
F-5
|
|||||||
Statements of Stockholders' Deficit for the year ended December 31, 2014 and 2013
|
F-6
|
|||||||
Notes to Financial Statements for the year ended December 31, 2014 and 2013
|
F-7 to F-12
|
|||||||
Interim Financial Statements and Notes for the six months ended June 30, 2015 and 2014
|
F-13 to F-21
|
2014
|
2013
|
|||||||
ASSETS
|
||||||||
Cash
|
$
|
10,009
|
$
|
15
|
||||
Fixed assets, net
|
2,024
|
-
|
||||||
TOTAL ASSETS
|
$
|
12,033
|
$
|
15
|
||||
LIABILITIES
|
||||||||
Accounts payable
|
$
|
138,473
|
$
|
103,141
|
||||
Accrued interest
|
33,777
|
-
|
||||||
Convertible debts payable
|
673,500
|
-
|
||||||
Derivative liability
|
200,337
|
-
|
||||||
Notes payable, related party
|
-
|
516,479
|
||||||
TOTAL LIABILITIES
|
1,046,087
|
619,620
|
||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Common stock, par value $0.001 per share, Authorized – 500,000,000 shares, Issued and outstanding – 252,952,540 and 151,297,524 shares, respectively
|
252,953
|
151,298
|
||||||
Additional paid-in capital
|
8,564,025
|
6,709,091
|
||||||
Accumulated deficit
|
(9,851,032
|
)
|
(7,479,994
|
)
|
||||
TOTAL STOCKHOLDERS’ DEFICIT
|
(1,034,054
|
)
|
(619,605
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
12,033
|
$
|
15
|
For the Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
REVENUE, net
|
$
|
-
|
$
|
-
|
||||
OPERATING EXPENSES
|
||||||||
Selling, general and administrative
|
2,371,038
|
57,949
|
||||||
TOTAL OPERATING EXPENSES
|
2,371,038
|
57,949
|
||||||
LOSS FROM OPERATIONS
|
(2,371,038
|
)
|
(57,949
|
)
|
||||
LOSS BEFORE INCOME TAXES
|
(2,371,038
|
)
|
(57,949
|
)
|
||||
Income tax expense
|
-
|
-
|
||||||
NET LOSS
|
$
|
(2,371,038
|
)
|
$
|
(57,949
|
)
|
||
NET LOSS PER COMMON SHARE
|
||||||||
Basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
||
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
|
||||||||
Basic and diluted
|
221,704,960
|
151,297,524
|
2014
|
2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(2,371,038
|
)
|
$
|
(57,949
|
)
|
||
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
|
||||||||
Stock issued for services
|
1,412,110
|
-
|
||||||
Convertible debt issued for services
|
500,000
|
-
|
||||||
Non-cash interest
|
500,842
|
-
|
||||||
Gain on derivative revaluation
|
(300,505
|
)
|
-
|
|||||
Depreciation
|
225
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts payable
|
35,332
|
(6,754
|
)
|
|||||
Accrued interest
|
33,777
|
-
|
||||||
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
(189,257)
|
(64,703
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from the sale of common stock
|
20,000
|
-
|
||||||
Proceeds from loan payable – related party
|
8,000
|
64,718
|
||||||
Proceeds from convertible debts
|
173,500
|
-
|
||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
201,500
|
64,718
|
||||||
NET INCREASE (DECREASE) IN CASH
|
9,994
|
15
|
||||||
CASH AT THE BEGINNING OF THE PERIOD
|
15
|
-
|
||||||
CASH AT THE END OF THE PERIOD
|
$
|
10,009
|
$
|
15
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Interest paid
|
$
|
-
|
$
|
-
|
||||
Taxes paid
|
$
|
-
|
$
|
-
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
||||||||||||||||
Balance, December 31, 2012
|
151,297,524
|
$
|
151,298
|
$
|
6,644,486
|
$
|
(7,422,045)
|
$
|
(626,261
|
)
|
||||||||||
Forgiveness of debts
|
-
|
-
|
64,605
|
-
|
64,605
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(57,949
|
)
|
(57,949
|
)
|
|||||||||||||
Balance, December 31,2003
|
151,297,524
|
151,298
|
6,709,091
|
(7,479,994
|
)
|
(619,605)
|
||||||||||||||
Issuance of shares for services
|
100,865,016
|
100,865
|
1,311,245
|
-
|
1,412,110
|
|||||||||||||||
Issuance of shares for cash
|
790,000
|
790
|
19,210
|
-
|
20,000
|
|||||||||||||||
Forgiveness of debts
|
-
|
-
|
524,479
|
-
|
524,479
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,371,038
|
)
|
(2,371,038
|
)
|
|||||||||||||
Balance, December 31, 2014
|
252,952,540
|
$
|
252,953
|
$
|
8,564,025
|
$
|
(9,851,032)
|
)
|
$
|
(1,034,054
|
)
|
Carrying Value
|
Fair Value Measurements
Using Fair Value Hierarchy
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability – December 31, 2014
|
$
|
200,337
|
$
|
--
|
$
|
--
|
$
|
200,337
|
Balance at December 31, 2013
|
$
|
-
|
||
Initial measurement at issuance date of the notes
|
500,842
|
|||
Change in derivative liability during the year ended December 31, 2014
|
(300,505)
|
|||
Balance December 31, 2014
|
$
|
200,337
|
(1) risk free interest rate of
|
0.10%;
|
(2) dividend yield of
|
0%;
|
(3) volatility factor of
|
435%;
|
(4) an expected life of the conversion feature of
|
365 days, and
|
(5) estimated fair value of the company’s common stock of
|
$0.008 per share.
|
Balance at December 31, 2013
|
$
|
-
|
||
Initial measurement at issuance date of the notes
|
500,842
|
|||
Change in derivative liability during the year ended December 31, 2014
|
(300,505)
|
|||
Balance December 31, 2014
|
$
|
200,337
|
Net operating loss carry-forward
|
$
|
1,565,039
|
||
Less valuation allowance
|
(1,565,039
|
)
|
||
Net deferred tax assets, December 31, 2014
|
$
|
-
|
Balance January 1, 2012
|
$
|
1,484,409
|
||
Additions for the year ended December 31, 2013
|
16,226
|
|||
Balance, December 31, 2013
|
$
|
1,500,635
|
||
Additions for the year ended December 31, 2014
|
46,133
|
|||
Balance, December 31, 2014
|
$
|
1,546,768
|
JUNE 30, 2015 (UNAUDITED)
|
DECEMBER 31, 2014
|
|||||||
ASSETS
|
||||||||
Cash
|
$
|
116,543
|
$
|
10,009
|
||||
Inventory
|
190,358
|
-
|
||||||
Fixed assets, net
|
1,799
|
2,024
|
||||||
TOTAL ASSETS
|
$
|
308,700
|
$
|
12,033
|
||||
LIABILITIES
|
||||||||
Accounts payable
|
$
|
146,473
|
$
|
138,473
|
||||
Accrued interest
|
58,602
|
33,777
|
||||||
Convertible debts payable
|
500,000
|
673,500
|
||||||
Derivative liability
|
1,114,300
|
200,337
|
||||||
TOTAL LIABILITIES
|
1,819,375
|
1,046,087
|
||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Preferred A stock, par value $0.001 per share, Authorized – 1,000 shares, Issued and outstanding – 1,000 and -0- shares, respectively
|
1
|
-
|
||||||
Common stock, par value $0.001 per share, Authorized – 500,000,000 shares, Issued and outstanding – 327,772,980 and 252,952,540 shares, respectively
|
327,773
|
252,953
|
||||||
Additional paid-in capital
|
9,466,704
|
8,56,025
|
||||||
Accumulated deficit
|
(11,305,153
|
)
|
(9,851,032
|
)
|
||||
TOTAL STOCKHOLDERS’ DEFICIT
|
(1,510,675
|
)
|
(1,034,054
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
308,700
|
$
|
12,033
|
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
REVENUE, net
|
$ | - | $ | - | $ | - | $ | - | ||||||||
OPERATING EXPENSES
|
||||||||||||||||
Selling, general and administrative
|
608,684 | 2,484,147 | 1,454,121 | 2,484,150 | ||||||||||||
TOTAL OPERATING EXPENSES
|
608,684 | ) | 2,484,147 | 1,454,121 | 2,484,150 | |||||||||||
LOSS FROM OPERATIONS
|
(608,684 | ) | (2,484,147 | ) | (1,454,121 | ) | (2,484,150 | ) | ||||||||
LOSS BEFORE INCOME TAXES
|
(608,684 | ) | (2,484,147 | ) | (1,454,121 | ) | (2,484,150 | ) | ||||||||
Income tax expense
|
- | - | - | - | ||||||||||||
NET LOSS
|
$ | (608,684 | ) | $ | (2,484,147 | ) | $ | (1,454,121 | ) | $ | (2,484,150 | ) | ||||
NET LOSS PER COMMON SHARE
|
||||||||||||||||
Basic and diluted
|
$ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
|
||||||||||||||||
Basic and diluted
|
292,559,475 | 228,885,998 | 273,071,502 | 190,091,761 |
Preferred A
Stock
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total Stockholders’
|
|||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
|||||||||||||||||||
Balance, December 31, 2014
|
-
|
$
|
-
|
252,952,540
|
$
|
252,953
|
$
|
8,564,025
|
$
|
(9,851,032)
|
$
|
(1,034,054
|
)
|
||||||||||||
Issuance of shares for cash
|
-
|
-
|
54,010,000
|
54,010
|
490,990
|
-
|
545,000
|
||||||||||||||||||
Issuance of shares for services
|
1,000
|
1
|
6,150,000
|
6,150
|
252,849
|
-
|
259,000
|
||||||||||||||||||
Issuance of shares for convertible debt
|
-
|
-
|
14,660,440
|
14,660
|
158,840
|
-
|
173,500
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,454,121
|
)
|
(1,454,121
|
)
|
||||||||||||||||
Balance, June 30, 2015
|
1,000
|
$
|
1
|
327,772,980
|
$
|
327,773
|
$
|
9,466,704
|
$
|
(11,305,153
|
)
|
$
|
(1,510,675
|
)
|
2015
|
2014
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(1,454,121
|
)
|
$
|
(2,484,150
|
)
|
||
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
|
||||||||
Loss on derivative revaluation
|
913,963
|
-
|
||||||
Depreciation
|
225
|
-
|
||||||
Preferred A stock issued for services
|
180,000
|
-
|
||||||
Common stock issued for services
|
79,000
|
1,412,110
|
||||||
Non-cash interest expense
|
-
|
500,842
|
||||||
Non-cash compensation
|
-
|
500,000
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Inventory
|
(190,358)
|
-
|
||||||
Accounts payable
|
8,000
|
18,329
|
||||||
Accrued interest
|
24,825
|
6,685
|
||||||
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
(438,466)
|
(46,184
|
)
|
|||||
CASH FLOWS USED BY INVESTING ACTIVITIES:
|
||||||||
Purchase of fixed assets
|
-
|
(2,249
|
)
|
|||||
NET CASH USED BY INVESTING ACTIVITIES
|
-
|
(2,249
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from the sale of common stock
|
545,000
|
-
|
||||||
Proceeds from the issuance of convertible debt
|
-
|
60,000
|
||||||
Proceeds from related party notes
|
-
|
8,000
|
||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
545,000
|
68,000
|
||||||
NET INCREASE (DECREASE) IN CASH
|
106,534
|
19,567
|
||||||
CASH AT THE BEGINNING OF THE PERIOD
|
10,009
|
15
|
||||||
CASH AT THE END OF THE PERIOD
|
$
|
116,543
|
$
|
19,582
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Interest paid
|
$
|
-
|
$
|
-
|
||||
Taxes paid
|
$
|
-
|
$
|
-
|
Carrying Value
|
Fair Value Measurements
Using Fair Value Hierarchy
|
||||||||||||||
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability – December 31, 2014
|
$
|
200,337
|
$
|
--
|
$
|
--
|
$
|
200,337
|
|||||||
Derivative liability – June 30, 2015
|
$
|
1,114,300
|
$
|
-
|
$
|
-
|
$
|
1,114,300
|
Balance at December 31, 2014
|
$
|
-
|
||
Initial measurement at issuance date of the notes
|
200,337
|
|||
Change in derivative liability during the six months ended June 30, 2015
|
913,963
|
|||
Balance June 30, 2015
|
$
|
1,114,300
|
(1) risk free interest rate of
|
0.10%;
|
(2) dividend yield of
|
0%;
|
(3) volatility factor of
|
435%;
|
(4) an expected life of the conversion feature of
|
365 days, and
|
(5) estimated fair value of the company’s common stock of
|
$0.008 per share.
|
Balance at December 31, 2014
|
$
|
200,337
|
||
Change in derivative liability during the six months ended June 30, 2015
|
913,963
|
|||
Balance June 30, 2015
|
$
|
1,114,300
|
Securities and Exchange Commission registration fee
|
$
|
313.25
|
||
Accounting fees and expenses
|
$
|
8,5000.00
|
||
Legal fees and expenses
|
$
|
18,000.00
|
||
TOTAL
|
$
|
26,813.25
|
Exhibit Number
|
Description of Exhibits
|
|||
3.1
|
Articles and Restated By-Laws
|
Filed herewith
|
||
5.1
|
Form of Attorney’s Opinion and Consent
|
Filed herewith
|
||
23.1
|
Consent of Independent Auditor
|
Filed herewith
|
1)
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
|
|
a)
|
Include any prospectus required by Section 10(a)(3) of the Securities Act;
|
|
b)
|
Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change 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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes in the 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,
|
|
c)
|
Include any additional or changed material information on the plan of distribution.
|
2)
|
That, for the purpose of determining any liability under the Securities Act, treat each post-effective amendment as a new registration statement relating to the securities offered herein, and to treat the offering of such securities at that time to be the initial bona fide offering thereof.
|
Signature
/s/ George J. Powell, III
|
Title
Sole Director, Chief Executive Officer,
Interim Chief Financial Officer, and Secretary
|
Date
August 4, 2015
|
(a)
|
Effect of Redemption
. The payment by the Corporation to the Holder (at such Holder’s address of record) of the Redemption Amount in connection with a Redemption, which shall be effective three (3) business days after the date the Corporation mails the Redemption Amount to the Holder (the “
Redemption Date
” and a “
Redemption Delivery
”), shall fully discharge the Corporation from any and all further obligations under the Series A Preferred Stock and shall automatically, and without any required action by the Corporation or the Holder (including the requirement that the Holder provide the Corporation or the Corporation’s transfer agent the Series A Preferred Stock Certificates evidencing such Series A Preferred Stock), result in the cancellation, termination and invalidation of any outstanding Series A Preferred Stock and Series A Preferred Stock Certificates held by Holder or his, her or its assigns.
|
(b)
|
Further Actions Following Redemption
. The Corporation and/or the Corporation’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the payment of the Redemption Amount, to reflect the cancellation of the Series A Preferred Stock subject to the Redemption, which shall not require the approval and/or consent of any Holder, and provided that by agreeing to the terms and conditions of this Certificate of Determination and the acceptance of the Series A Preferred Stock, each Holder hereby agrees to release the Corporation and the Corporation’s Transfer Agent from any and all liability whatsoever in connection with the cancellation of the Series A Preferred Stock following a valid Redemption, regardless of the return to the Corporation or the Transfer Agent of any certificates representing such Series A Preferred Stock, which as stated above, shall be automatically cancelled upon the payment of the Redemption Amount (a “
Redemption Cancellation
”).
|
(c)
|
Further Redemption Assurances
. Notwithstanding the above, each Holder, by accepting such Series A Preferred Stock Certificates hereby covenants that it will, whenever and as reasonably requested by the Corporation and the Transfer Agent, at its sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect a Redemption Cancellation, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent.
|
(d)
|
Additional Redemption Procedures
. In the event that any Redemption Delivery is unsuccessful, such Redemption Amount shall be held by the Corporation in trust and such Redemption Amount shall be released to such Holder upon reasonable evidence to the Corporation or the Transfer Agent that such Holder is the legal owner of such Redemption Amount, provided that the Holder’s failure to accept such Redemption Amount and/or the Corporation’s inability to affect a Redemption Delivery shall in no event effect the validity of the Redemption Cancellation. Furthermore, the Holder shall be due no interest on the Redemption Amount while being held by the Corporation in trust and any and all interest, if any, which shall accrue on such amount shall be the sole property of the Corporation.
|
(a)
|
Increase or decrease the total number of authorized shares of Series A Preferred Stock;
|
(b)
|
Effect an exchange, reclassification, or cancellation of all or a part of the Series A Preferred Stock;
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(c)
|
Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series A Preferred Stock; or
|
(d)
|
Alter or change the rights, preferences or privileges of the shares of Series A Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Certificate of Determination.
|
(a)
|
The headings of the various sections and subsections of this Certificate of Determination are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Determination.
|
(b)
|
Whenever possible, each provision of this Certificate of Determination shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Determination. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Determination would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.
|
(c)
|
Except as may otherwise be required by law, the shares of the Series A Preferred Stock shall not have any powers, designations, preferences or other special rights, other than those specifically set forth in this Certificate of Determination.
|
|
(a)
|
"
Board
" means the board of directors of the Company.
|
|
(b)
|
"
Bylaws
" means these bylaws as adopted by the Board and includes amendments subsequently adopted by the Board or by the Stockholders.
|
|
(c)
|
"
Articles of Incorporation
" means the Articles of Incorporation of Code Green Apparel Corporation, as filed with the Secretary of State of the State of Nevada and includes all amendments thereto and restatements thereof subsequently filed.
|
|
(d)
|
"
Company
" means Code Green Apparel Corporation, a Nevada corporation.
|
|
(e)
|
"
Section
" refers to sections of these Bylaws.
|
|
(f)
|
"
Stockholder
" means stockholders of record of the Company.
|
10.1
|
Definitions
. In this Article:
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/s/ George J. Powell, III
By: George J. Powell, III
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