CODE GREEN APPAREL CORP (Form: S-1/A, Received: 01/29/2016 14:36:18)

CERTIFICATE OF DESIGNATION

CODE GREEN APPAREL CORP.

ESTABLISHING THE DESIGNATION, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES B CONVERTIBLE PREFERRED STOCK

Pursuant to Section 78.1955 of the Nevada Revised Statutes (the “ NRS ”), Code Green Apparel Corp., a company organized and existing under the State of Nevada (the “ Corporation ”),

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the sole member of the Board of Directors by the Articles of Incorporation of the Corporation, as amended, and pursuant to Section 78.1955 of the NRS, the sole member of the Board of Directors, by written consent on December [ ], 2015, duly adopted a resolution providing for the issuance of a series of two hundred thousand (200,000) shares of Series B Convertible Preferred Stock, which resolution is and reads as follows:

RESOLVED , that pursuant to the authority expressly granted to and invested in the sole member of the Board of Directors by the provisions of the Articles of Incorporation of the Corporation, as amended and Section 78.1955 of the NRS, a series of the preferred stock, par value $0.001 per share, of the Corporation be, and it hereby is, established; and

FURTHER RESOLVED , that the series of preferred stock of the Corporation be, and it hereby is, given the distinctive designation of “ Series B Preferred Stock ”; and

FURTHER RESOLVED , that the Series B Preferred Stock shall consist of two hundred thousand (200,000) shares; and

FURTHER RESOLVED , that the Series B Preferred Stock shall have the powers and preferences, and the relative, participating, optional and other rights, and the qualifications, limitations, and restrictions thereon set forth in this Certificate of Designation (the “ Designation ” or the “ Certificate of Designation ”) below, which shall amend, replace and supersede the Prior Preferred Stock in their entirety:

Certain capitalized terms used herein are defined in Section 15 below.

1. Dividends .

1.1 Participation . Subject to the rights of the holders, if any, of any shares of securities senior to or pari passu with, the Series B Preferred Stock, including the Senior Securities, the Holders shall, as holders of Series B Preferred Stock, be entitled to such cash dividends paid and Distributions made to the holders of Common Stock to the same extent as if such Holders had converted the Series B Preferred Stock into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and Distributions. Payments under the preceding sentence shall be made concurrently with the dividend or Distribution to the holders of Common Stock. Notwithstanding the foregoing, the Holders shall have no right of participation in connection with dividends or Distributions made to the Common Stock shareholders consisting solely of shares of Common Stock.

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1.2 Non-Cash Distributions . Whenever a Distribution provided for in this Section 1 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

1.3 Other Distributions . Subject to the terms of this Certificate of Designation, and to the fullest extent permitted by the NRS, the Corporation shall be expressly permitted to redeem, repurchase or make distributions on the shares of its capital stock in all circumstances other than where doing so would cause the Corporation to be unable to pay its debts as they become due in the usual course of business.

2. Liquidation Rights .

2.1 Liquidation Amount . In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (each a “ Liquidation Event ”), the holders of Series B Preferred Stock shall be entitled to receive pro rata with any Distribution of any of the assets of the Corporation to the holders of the Corporation’s securities other than Senior Securities by reason of their ownership of such stock, but not prior to any holders of the Corporation’s Senior Securities, which holders of the Senior Securities shall have priority to the Distribution of any assets of the Corporation, an amount per share for each share of Series B Preferred Stock held by them equal to the sum of the Liquidation Amount. If upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Series B Preferred Stock and Common Stock ( i.e. , after payment of the Corporation’s liabilities and payment to any holders of the Corporation’s Senior Securities) are insufficient to permit the payment to such holders of the full amounts specified in this Section then the entire assets of the Corporation legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series B Preferred Stock and Common Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section and applicable law.

2.2 Valuation of Non-Cash Consideration . If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors. In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.

3. Conversion . The holders of the Series B Preferred Stock shall have conversion rights as follows (the “ Conversion Rights ”):

3.1 Conversion .

(a) Each share of Series B Preferred Stock shall be convertible, at the option of the Holder thereof (a “ Conversion ”), at any time following the Original Issuance Date, at the office of the Corporation or any Transfer Agent for the Series B Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original Issue Price for the Series B Preferred Stock by the Conversion Price (such shares of Common Stock issuable upon a Conversion, the “ Conversion Shares ”). In order to effectuate the Conversion under this Section 3.1 , the Holder must provide the Corporation a written notice of conversion in the form of Exhibit A hereto (the “ Notice of Conversion ”). The Notice of Conversion must be dated no earlier than three Business Days from the date the Notice of Conversion is actually received by the Corporation.

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(b) Mechanics of Conversion . In order to effect a Conversion, a holder shall fax or email a copy of the fully executed Notice of Conversion to the Corporation (Attention: George J. Powell, 4739 S. Durfee Ave., Pico Rivera, CA. 90660, Fax: 949-388-3412, Email: George@codegreenapparel.com , with a copy to (which shall not constitute notice) Aaron D. McGeary, The McGeary Law Firm, P.C., 1600 Airport Fwy., Suite 300 Bedford, Texas 76022, Fax: (817)-282-5886, Email: amcgeary@mcgearylawfirm.com). Upon receipt by the Corporation of a facsimile or emailed copy of a Notice of Conversion from a Holder, the Corporation shall promptly send, via facsimile or email, a confirmation to such Holder stating that the Notice of Conversion has been received, the date upon which the Corporation expects to deliver the Common Stock issuable upon such conversion and the name and telephone number of a contact person at the Corporation regarding the Conversion. The holder shall surrender, or cause to be surrendered, the Preferred Stock Certificates being converted, duly endorsed, to the Corporation at the address listed above (or the address of the Transfer Agent for the Series B Preferred Stock, if the Corporation is not serving as its own Transfer Agent for such Series B Preferred Stock) within five Business Days of delivering the fully executed Notice of Conversion. The Corporation shall not be obligated to issue shares of Common Stock upon a Conversion unless either (x) the Preferred Stock Certificates; or (y) the Lost Certificate Materials described in Section 11 , below have been previously received by the Corporation or its Transfer Agent. In the event the Holder has lost or misplaced the certificates evidencing the Preferred Stock, the Holder shall be required to provide the Corporation or the Corporation’s Transfer Agent (as applicable) with whatever documentation and fees each may require to re-issue the Preferred Stock Certificates and shall be required to provide such re-issued Preferred Stock Certificates to the Corporation within five Business Days of delivering the Notice of Conversion. Unless the Conversion Shares are covered by a valid and effective registration under the Securities Act or the Notice of Conversion provided by the Holder includes a valid opinion from an attorney stating that such shares of Common Stock issuable in connection with the Notice of Conversion can be issued free of restrictive legend, which shall be determined by the Corporation in its sole discretion, such shares shall be issued as Restricted Shares.

(c) Delivery of Common Stock upon Conversion . Upon the receipt of a Notice of Conversion, the Corporation (itself, or through its Transfer Agent) shall, no later than the fifth Business Day following the date of such receipt (subject to the surrender of the Preferred Stock Certificates by the holder within the period described in Section 3.1 (b) or, in the case of lost, stolen or destroyed certificates, after provision of the Lost Certificate Materials) (the “ Delivery Period ”), issue and deliver (i.e., deposit with a nationally recognized overnight courier service postage prepaid) to the Holder or its nominee (x) a certificate representing the Conversion Shares and (y) a certificate representing the number of shares of Series B Preferred Stock not being converted, if any. Notwithstanding the foregoing, if the Corporation’s Transfer Agent is participating in the Depository Trust Corporation (“ DTC ”) Fast Automated Securities Transfer program, and so long as the certificates therefor do not bear a legend and the holder thereof is not then required to return such certificate for the placement of a legend thereon, the Corporation shall cause its Transfer Agent to promptly electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of the Holder or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“ DTC Transfer ”). If the aforementioned conditions to a DTC Transfer are not satisfied, the Corporation shall deliver as provided above to the Holder physical certificates representing the Common Stock issuable upon Conversion. Further, a Holder may instruct the Corporation to deliver to the Holder physical certificates representing the Common Stock issuable upon conversion in lieu of delivering such shares by way of DTC Transfer.

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(d) Failure to Provide Preferred Stock Certificates . In the event the Holder provides the Corporation with a Notice of Conversion, but fails to provide the Corporation with the Preferred Stock Certificates or the Lost Certificate Materials (as defined in Section 11 below), by the end of the Delivery Period, the Notice of Conversion shall be considered void and the Corporation shall not be required to comply with such Notice of Conversion.

(e) Beneficial Ownership Limitation for Conversions . No Conversion shall result in the conversion of more than that number of shares of Series B Preferred Stock, if any, such that, upon such Conversion, the aggregate beneficial ownership of the Corporation’s Common Stock (calculated pursuant to Rule 13d-3 of the Exchange Act) of such Holder and all persons affiliated with such Holder as described in Rule 13d-3 is more than 4.99% of the Corporation’s Common Stock then outstanding (the “ Maximum Percentage ”). In the event any Conversion would result in the issuance of shares of Common Stock to any Holder in excess of the Maximum Percentage, only that number of shares of Series B Convertible Preferred Stock which when Converted would not result in such Holder exceeding the Maximum Percentage shall be subject to such applicable Conversion, if any, and Holder shall continue to hold any remaining shares of Series B Preferred Stock, the conversion of which would result in Holder exceeding the Maximum Percentage. The Corporation’s Transfer Agent shall be authorized to promptly disclose the total outstanding shares of Common Stock of the Corporation to the Holder from time to time at the request of the Holder in order for the Holder to determine its compliance with the Maximum Percentage. The provisions of this Section 3.1 (e) shall not be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.1 (e) to correct this Section (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The Corporation shall not be required to verify or investigate or confirm whether any Conversion would exceed the Maximum Percentage, and instead the Corporation shall be able to rely on any Notice of Conversion as prima facie evidence of, and as a representation by, the applicable Holder, that such applicable conversion described in the Notice of Conversion would not result in a violation of the Maximum Percentage Additionally, in no event shall any Holder have the right pursuant to Section 5 below, to vote, on any matter presented to the shareholders of the Corporation for their action or consideration at any meeting of shareholders of the Corporation (or by written consent of shareholders in lieu of meeting), a number of voting shares in excess of the Maximum Percentage.

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3.2 Fractional Shares . If any Conversion of Series B Preferred Stock would result in the issuance of a fractional share of Common Stock (aggregating all shares of Series B Preferred Stock being converted pursuant to a given Notice of Conversion), such fractional share shall be payable in cash based upon the market value of the Common Stock on the trading day immediately prior to the date of Conversion (as determined in good faith by the Board of Directors) and the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock shall be the next lower whole number of shares. If the Corporation elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

3.3 Taxes . The Corporation shall not be required to pay any tax which may be payable in respect to any transfer involved in the issue and delivery of shares of Common Stock upon Conversion in a name other than that in which the shares of the Series B Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax, or has established, to the satisfaction of the Corporation, that such tax has been paid. The Corporation shall withhold from any payment due whatsoever in connection with the Series B Preferred Stock any and all required withholdings and/or taxes the Corporation, in its sole discretion deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Corporation in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Corporation.

3.4 No Impairment . The Corporation will not through any reorganization, transfer of assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of Series B Preferred Stock against impairment. Notwithstanding the foregoing, nothing in this Section shall prohibit the Corporation from amending its Articles of Incorporation with the requisite consent of its stockholders and the Board of Directors.

3.5 Reservation of Stock Issuable Upon Conversion . The 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 the Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Series B Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Preferred Stock, the Corporation will use its commercially reasonable efforts to 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 purpose.

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4. Adjustments for Recapitalizations .

4.1 Equitable Adjustments for Recapitalizations . (a) The Liquidation Amount and the Original Issue Price (each, as and if applicable) (the “ Preferred Stock Adjustable Provisions ”); (b) the Conversion Price (the “ Common Stock Adjustable Provisions ”), and (c) any and all other terms, conditions, amounts and provisions of this Designation which (i) pursuant to the terms of this Designation provide for equitable adjustment in the event of a Recapitalization (the “ Other Equitable Adjustable Provisions ”); or (ii) the Board of Directors of the Corporation determines in their reasonable good faith judgment is required to be equitably adjusted in connection with any Recapitalizations, shall each be subject to equitable adjustment as provided in Sections 4.2 through 4.3 , below, as determined by the Board of Directors in their sole and reasonable discretion.

4.2 Adjustments for Subdivisions or Combinations of Common Stock . In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, without a corresponding subdivision of the Series B Preferred Stock, the applicable Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately and equitably adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series B Preferred Stock, the Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately and equitably adjusted.

4.3 Adjustments for Subdivisions or Combinations of Series B Preferred Stock . In the event the outstanding shares of Series B Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series B Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately adjusted. In the event the outstanding shares of Series B Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Series B Preferred Stock, the applicable Preferred Stock Adjustable Provisions, Common Stock Adjustable Provisions and the Other Equitable Adjustable Provisions (if any) in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately adjusted.

4.4 Adjustments for Reclassification, Exchange and Substitution .

(a) Except to the extent such Recapitalization Event is subject to Sections 4.1 through 4.3 , above (the “ Recapitalization and Adjustment Rights ”), and/or Section 2 (“ Liquidation Rights ”), if at any time or from time to time after the Original Issuance Date there shall occur any capital reorganization, recapitalization, reclassification, share exchange, restructuring, consolidation, combination or merger involving the Corporation in which the Common Stock (but not the Series B Preferred Stock) is converted into or exchanged for shares of stock or other securities or property (including cash) of the Corporation or otherwise (other than a transaction covered by the Recapitalization and Adjustment Rights or Liquidation Rights) (each a “ Recapitalization Event ”), provision shall be made so that each Series B Preferred Holder shall thereafter be entitled to receive upon conversion of the shares of Series B Preferred Stock held by such Series B Preferred Holder the kind and number of shares of stock or other securities or property (including cash or any combination thereof) of the Corporation or otherwise, to which a Common Stock shareholder holding the number of shares of Common Stock into which the shares of Series B Preferred Stock held by such Series B Preferred Holder are convertible immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger (without regard for the Maximum Percentage) would have been entitled upon such event.

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(b) In the event that the holders of Common Stock have the opportunity to elect the form of consideration to be received in the business combination, then the Corporation shall make adequate provision whereby the holders of Series B Preferred Stock shall have the opportunity to determine the form of consideration into which all of the Series B Preferred Stock, treated as a single class, shall be convertible from and after the effective date of such business combination. If such opportunity is granted, such determination shall be based on the determination at a meeting duly called or via a written consent to action of a Majority In Interest, shall be subject to any limitations to which all holders of Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in such business combination, and shall be conducted in such a manner as to be completed by the date which is the earliest of (1) the deadline for elections to be made by holders of Common Stock and (2) two Business Days prior to the anticipated effective date of the business combination. Further, the Corporation shall not effect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Corporation) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument, the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

(c) If a conversion of Series B Preferred Stock is to be made in connection with a transaction contemplated by this Section 4.4 or a similar transaction affecting the Corporation (other than a tender or exchange offer), the conversion of any shares of Series B Preferred Stock may, at the election of the Holder thereof, be conditioned upon the consummation of such transaction, in which case such conversion shall not be deemed to be effective until such transaction has been consummated. In connection with any tender or exchange offer for shares of Common Stock, Holders of Series B Preferred Stock shall have the right to tender (or submit for exchange) shares of Series B Preferred Stock in such a manner so as to preserve the status of such shares as Series B Preferred Stock until immediately prior to such time as shares of Common Stock are to be purchased (or exchanged) pursuant to such offer, at which time that portion of the shares of Series B Preferred Stock so tendered which is convertible into the number of shares of Common Stock to be purchased (or exchanged) pursuant to such offer shall be deemed converted into the appropriate number of shares of Common Stock. Any shares of Series B Preferred Stock not so converted shall be returned to the Holder as Series B Preferred Stock.

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(d) None of the foregoing provisions shall affect the right of a Holder of shares of Series B Preferred Stock to convert such Holder’s shares of Series B Preferred Stock into shares of Common Stock prior to the effective date of such business combination, subject to the terms of this Designation.

(e) In the event of any Recapitalization Event falling under this Section 4.4 , in such case, appropriate adjustment shall be made in the application of the provisions of this Section 4.4 with respect to the rights and interests of the Series B Preferred Holders after such events to the end that the provisions of this Section 4.4 (including, but not limited to, adjustment of the Conversion Price in respect of any shares of Series B Preferred Stock then in effect and the number of shares issuable upon conversion of all such shares of Series B Preferred Stock) shall be applicable after that event as nearly reasonably as may be. The Corporation may not become a party to any such transaction unless its terms are consistent with the preceding requirements and such transaction is otherwise effected in accordance with this Designation.

4.5 Certificate as to Adjustments . Upon the occurrence of each adjustment or readjustment pursuant to this Section 4 , the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series B Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the reasonable written request at any time of any holder of Series B Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series B Preferred Stock.

5. Voting .

5.1 Series B Convertible Preferred Voting Rights . Except as otherwise provided herein or as required by the NRS, the Series B Preferred Stock shall be voted equally with the shares of the Common Stock of the Corporation, and not as a separate class, at any annual or special meeting of stockholders of the Corporation, and may act by written consent in the same manner as the Common Stock, in either case upon the following basis: each Holder of shares of Series B Preferred Stock shall be entitled to that number of votes as equals the number of shares of Common Stock into which such Holder’s aggregate shares of Series B Preferred Stock are convertible (pursuant to Section 3 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent, provided that in no event shall any Holder have the right pursuant to this Section 5 , to vote, on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of shareholders in lieu of meeting), a number of voting shares in excess of the Maximum Percentage.

5.2 No Series Voting . Other than as provided herein or required by law, there shall be no series voting.

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6. Protective Provisions.

6.1 Subject to the rights of series of preferred stock which may from time to time come into existence, so long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of the holders of a Majority In Interest:

(a) Effect an exchange, reclassification, or cancellation of all or a part of the Series B Preferred Stock (except pursuant to Section 4.4 hereof, which shall not require any approval or consent of the Holders);

(b) 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 B Preferred Stock (except pursuant to Section 4.4 hereof, which shall not require any approval or consent of the Holders);

(c) Alter or change the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series; or

(d) Amend or waive any provision of the Corporation’s Articles of Incorporation or Bylaws relative to the Series B Preferred Stock so as to affect adversely the shares of Series B Preferred Stock in any material respect as compared to holders of other series of shares.

7. Redemption Rights . None.

8. Notices .

8.1 In General . Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile or email transmission, and shall be effective, unless otherwise provided herein, three days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party. The addresses for such communications are (i) if to the Corporation to, Attention: George J. Powell, 4739 S. Durfee Ave., Pico Rivera, CA. 90660, Fax: 949-388-3412, Email: George@codegreenapparel.com , with a copy to (which shall not constitute notice) Aaron D. McGeary, The McGeary Law Firm, P.C., 1600 Airport Fwy., Suite 300 Bedford, Texas 76022, Fax: (817)-282-5886, Email: amcgeary@mcgearylawfirm.com, and (ii) if to any Holder to the address set forth in the records of the Corporation or its Transfer Agent, as applicable, or such other address as may be designated in writing hereafter, in the same manner, by such person.

8.2 Notices of Record Date . In the event that the Corporation shall propose at any time:

(a) to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

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(b) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or

then, in connection with each such event, the Corporation shall send to the Holders of the Series B Preferred Stock at least ten Business Days’ prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (b) and (c) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Series B Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the vote or written consent of the holders of a Majority In Interest, voting together as a single class.

9. No Preemptive Rights . No Holder shall have the right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such right may from time to time be set forth in a written agreement between the Corporation and such stockholder.

10. Reports . The Corporation shall mail to all holders of Series B Preferred Stock those reports, proxy statements and other materials that it mails to all of its holders of Common Stock.

11. Replacement Preferred Stock Certificates . In the event that any Holder notifies the Corporation that a Preferred Stock Certificate evidencing shares of Series B Preferred Stock has been lost, stolen, destroyed or mutilated, the Corporation shall issue a replacement stock certificate evidencing the Series B Preferred Stock identical in tenor and date (or if such certificate is being issued for shares not covered in a redemption or conversion, in the applicable tenor and date) to the original Preferred Stock Certificate evidencing the Series B Preferred Stock, provided that the Holder executes and delivers to the Corporation and/or its Transfer Agent, as applicable, an affidavit of lost stock certificate and an agreement reasonably satisfactory to the Corporation and its Transfer Agent to indemnify the Corporation from any loss incurred by it in connection with such Series B Preferred Stock certificate, and provides the Corporation and/or its Transfer Agent such other information, documents and if applicable, bonds and indemnities as the Corporation or its Transfer Agent customarily requires for reissuances of stock certificates (collectively the “ Lost Certificate Materials ”); provided, however, the Corporation shall not be obligated to re-issue replacement stock certificates if the Holder contemporaneously requests the Corporation to convert or redeem the full number of shares evidenced by such lost, stolen, destroyed or mutilated certificate.

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12. No Other Rights or Privileges . Except as specifically set forth herein, the Holders of the Series B Preferred Stock shall have no other rights, privileges or preferences with respect to the Series B Preferred Stock.

13. Construction . When used in this Designation, unless a contrary intention appears: (i) a term has the meaning assigned to it; (ii) “ or ” is not exclusive; (iii) “ including ” means including without limitation; (iv) words in the singular include the plural and words in the plural include the singular, and words importing the masculine gender include the feminine and neuter genders; (v) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; (vi) the words “ hereof ”, “ herein ” and “ hereunder ” and words of similar import when used in this Designation shall refer to this Designation as a whole and not to any particular provision hereof; (vii) references contained herein to Article, Section, Schedule and Exhibit, as applicable, are references to Articles, Sections, Schedules and Exhibits in this Designation unless otherwise specified; (viii) references to “ dollars ”, “ Dollars ” or “ $ ” in this Designation shall mean United States dollars; (ix) reference to a particular statute, regulation or law means such statute, regulation or law as amended or otherwise modified from time to time; (x) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein); (xi) unless otherwise stated in this Designation, in the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each mean “ to but excluding ”; (xii) references to “ days ” shall mean calendar days; and (xiii) the paragraph and section headings contained in this Designation are for convenience only, and shall in no manner affect the interpretation of any of the provisions of this Designation.

14. Miscellaneous .

14.1 Cancellation of Series B Preferred Stock . If any shares of Series B Preferred Stock are converted pursuant to Section 3 , the shares so converted shall be canceled and shall return to the status of designated, but unissued Series B Preferred Stock.

14.2 Further Assurances . Each Holder hereby covenants that, in consideration for receiving shares of Series B Preferred Stock, that he, she or it will, whenever and as reasonably requested by the Corporation, do, execute, acknowledge and deliver any and all such other and further acts, deeds, confirmations, agreements and documents as the Corporation or its Transfer Agent may reasonably require in order to complete, insure and perfect any of the terms, conditions or provisions of this Designation.

14.3 Waiver/Amendment . Notwithstanding any provision in this Designation to the contrary, any provision contained herein and any right of the holders of Series B Preferred Stock granted hereunder may be waived and/or amended as to all shares of Series B Preferred Stock (and the Holders thereof) upon the written consent of a Majority In Interest, unless a higher percentage is required by applicable law, in which case the written consent of the Holders of not less than such higher percentage of shares of Series B Preferred Stock shall be required.

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14.4 Interpretation . Whenever possible, each provision of this Designation 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 Designation. 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 Designation 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.

14.5 No Other Rights . Except as may otherwise be required by law, the shares of the Series B Preferred Stock shall not have any powers, Designation, preferences or other special rights, other than those specifically set forth in this Designation.

15. Definitions . In addition to other terms defined throughout this Designation, the following terms have the following meanings when used herein:

15.1 “ Business Day ” means any day except Saturday, Sunday or any day on which banks are authorized by law to be closed in the City of Pico Rivera, California.

15.2 “ Common Stock ” shall mean the common stock, $0.001 par value per share of the Corporation.

15.3 “ Conversion Price ” shall equal $0.01 per share, subject to adjustment in connection with any Recapitalization.

15.4 “ Distribution ” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), or the purchase or redemption of shares of the Corporation for cash or property other than: (i) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right or obligation of said repurchase, (ii) repurchases of Common Stock (or securities convertible into Common Stock) issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of securities issued in error or in connection with settlement agreements; (iv) other repurchases allowed pursuant to the terms of this Designation, or (v) any other repurchases or redemptions of capital stock of the Corporation approved by the holders of (a) a majority of the outstanding shares of Common Stock; and (b) a Majority in Interest.

15.5 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

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15.6 “ Holder ” shall mean the person(s) or entity(ies) in which the Series B Preferred Stock is registered on the books of the Corporation.

15.7 “ Liquidation Amount ” shall equal $1.00 per share.

15.8 “ Majority In Interest ” means Holders holding a majority of the then aggregate shares of Series B Preferred Stock.

15.9 “ Original Issuance Date ” means the date that the Series B Preferred Stock is first issued.

15.10 “ Original Issue Price ” shall mean $10.00 per share (as appropriately adjusted for any Recapitalizations).

15.11 “ Preferred Stock Certificates ” means the stock certificate(s) issued by the Corporation representing the applicable Series B Preferred Stock shares.

15.12 “ Recapitalization ” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event described in Sections 4.2 through 4.3 .

15.13 “ Restricted Shares ” means shares of the Corporation’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is effected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)):

The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts .

15.14 “ SEC ” means the Securities and Exchange Commission.

15.15 “ Securities Act ” means the Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.

15.16 “ Senior Securities ” means the Corporation’s capital leases as may be in place from time to time and any other senior debt or other security holders of the Corporation, including certain banks and/or institutions, which hold security interests over the Corporation’s assets as of the Original Issuance Date, or which the Corporation may agree in the future to provide priority security interests to, which shall not require the approval and/or consent of the Holders.

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15.17 “ Transfer Agent ” means initially, the Corporation, which will be serving as its own transfer agent for the Series B Preferred Stock, but at the option of the Corporation from time to time and with prior written notice to the Holders, may also mean the Transfer Agent for the Company’s Common Stock, or any successor transfer agent which the Corporation may use for its Series B Preferred Stock.

——————————————————————————

NOW THEREFORE BE IT RESOLVED , that the Designation is hereby approved, affirmed, confirmed, and ratified; and it is further

RESOLVED , that each officer of the Corporation be and hereby is authorized, empowered and directed to execute and deliver, in the name of and on behalf of the Corporation, any and all documents, and to perform any and all acts necessary to reflect the Board of Directors approval and ratification of the resolutions set forth above; and it is further

RESOLVED , that in addition to and without limiting the foregoing, each officer of the Corporation and the Corporation’s attorney be and hereby is authorized to take, or cause to be taken, such further action, and to execute and deliver, or cause to be delivered, for and in the name and on behalf of the Corporation, all such instruments and documents as he may deem appropriate in order to effect the purpose or intent of the foregoing resolutions (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments, as the case may be) and all action heretofore taken by such officer in connection with the subject of the foregoing recitals and resolutions be, and it hereby is approved, ratified and confirmed in all respects as the act and deed of the Corporation; and it is further

RESOLVED , that this Designation may be executed in several counterparts, each of which is an original; that it shall not be necessary in making proof of this Designation or any counterpart hereof to produce or account for any of the other.

[Remainder of page left intentionally blank. Signature page follows.]

PREFERRED STOCK

SUBSCRIPTION AGREEMENT

CODE GREEN APPAREL CORP.

A. Subscription . This Agreement has been executed by Eric H. Scheffey, MD, an individual (the “ Subscriber ”) in connection with the subscription to purchase 125,000 shares of Series B Convertible Preferred Stock (the “ Shares ” or the “ Securities ”) of Code Green Apparel Corp., a Nevada corporation (the “ Company ”) at a purchase price of $10 per share, or an aggregate purchase price of $1,250,000 (the “ Purchase Price ”), which funds the Subscriber agrees to provide to the Company pursuant to the Payment Schedule described below. This Preferred Stock Subscription Agreement is referred to herein as the “ Agreement ”. The offering of the Shares shall be defined herein as the “ Offering ”. With the parties entry into this Agreement, they desire to terminate any and all remaining payment and/or purchase obligations or rights under the terms and conditions of that certain J.D. Hutt Corporation Regulation D (Rule 505) Offering Subscription Agreement dated on or around April 21, 2015.

When the context in which words are used in this Agreement indicates that such is the intent, singular words shall include the plural, and vice versa, and masculine words shall include the feminine and neuter genders, and vice versa. Any reference to a person shall include an individual, trust, estate, or any incorporated or unincorporated organization, including general or limited partnerships, limited liability companies, corporations, joint ventures and cooperatives, and all heirs, executors, administrators, legal representatives, successors and assigns of such person where permitted or required by the context. Captions are inserted for convenience only, are not a part of this Agreement, and shall not be used in the interpretation of this Agreement.

It is understood and agreed that the Company shall have the right to accept or reject this subscription (the “ Subscription ”), in whole or in part, and that the same shall be deemed to be accepted by the Company only when it is signed by the Company.

B. Representations and Warranties of Subscriber . Subscriber hereby represents and warrants to the Company as follows:

i) Subscriber is an “ Accredited Investor ” as such time is defined in Rule 501 of the Securities Act of 1933, as amended (the “ Securities Act ”, the “ Act ” or the “ 1933 Act ”), and has completed the Certification of Accredited Investor Status attached hereto as Exhibit A ;

ii) The Subscriber is acquiring the Securities for its own account for long-term investment and not with a view toward resale, fractionalization or division, or distribution thereof, and it does not presently have any reason to anticipate any change in its circumstances, financial or otherwise, or particular occasion or event which would necessitate or require its sale or distribution of the Securities. No one other than the Subscriber has any beneficial interest in said securities. Subscriber has had an opportunity to ask questions of and receive satisfactory answers from the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of this investment, the Securities and the Offering, and all such questions have been answered to the full satisfaction of Subscriber. The Company has not supplied Subscriber any information other than as contained in this Agreement, and Subscriber is relying on its own investigation and evaluation of the Company and the Securities in making an investment hereunder and not on any other information;

iii) The Subscriber confirms and represents that it is able (i) to bear the economic risk of its investment, (ii) to hold the Securities for an indefinite period of time, and (iii) to afford a complete loss of its investment. The Subscriber also represents that it has (i) adequate means of providing for its current needs and possible personal contingencies, and (ii) has no need for liquidity in this particular investment. No person has made to the Subscriber any written or oral representations: (x) that any person will resell or repurchase any of the Securities; (y) that any person will refund the purchase price of any of the Securities, or (z) as to the future price or value of any of the Securities;

iv) The Subscriber: (i) if a natural person, represents that the Subscriber has reached the age of 21 and has full authority, legal capacity and competence to enter into, execute and deliver this Agreement and all other related agreements or certificates and to take all actions required pursuant hereto and thereto and to carry out the provisions hereof and thereof, or (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities and such entity is duly organized, validly existing and in good standing under the laws of the state of its organization. Subscriber is a bona fide resident and domiciliary of the state set forth herein. Any individual executing this Agreement on behalf of an entity has authority to act on behalf of such entity and has been duly and properly authorized to sign this Agreement on behalf of such entity, provided further that such entity has validly authorized and approved such entity’s entry into this Agreement and the transactions contemplated herein;

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v) The Subscriber recognizes that the investment herein is a speculative venture and that the total amount of funds tendered to purchase Securities is placed at the risk of the business and may be completely lost. The purchase of Securities as an investment involves special risks;

vi) Subscriber acknowledges and is aware of the following:

(1) There are substantial restrictions on the transferability of the Securities; the Securities will not be, and the Subscriber will have no right to require that the Securities be registered under the 1933 Act; there may not be any public market for the Securities; Subscriber may not be able to use the provisions of Rule 144 of the 1933 Act with respect to the resale of the Securities; and accordingly, Subscriber may have to hold the Securities indefinitely and it may not be possible for Subscriber to liquidate Subscriber’s investment in the Company. Subscriber agrees that the Securities shall not be sold, transferred, pledged or hypothecated unless such sale is exempt from registration under the 1933 Act. Subscriber also acknowledges that Subscriber shall be responsible for compliance with all conditions on transfer imposed by any blue sky or securities law administrator and for any expenses incurred by the Company for legal or accounting services in connection with reviewing a proposed transfer; and

(2) No federal or state agency has made any finding or determination as to the fairness of the Offering of the Securities for investment or any recommendation or endorsement of the Securities; and

(3) The Securities have not been approved or registered under any Blue Sky law or with any State Securities Division, and as such, there may be restrictions on the sale or transfer of such Securities under State law;

vii) Subscriber, if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities;

viii) The Subscriber has carefully considered and has, to the extent it believes such discussion is necessary, discussed with its professional, legal, tax and financial advisors, the suitability of an investment in the Securities for its particular tax and financial situation and that the Subscriber and its advisers, if such advisors were deemed necessary, have determined that the Securities are a suitable investment for it;

ix) The Subscriber has not become aware of this Offering and has not been offered Shares by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to the Subscriber’s knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising;

x) The Subscriber (i) has at least five years’ investment experience in investments similar to the Securities, including investments in securities listed on the OTCQB and OTC Pink Sheet market, (ii) has not made an overall commitment to investments which are not readily marketable which is disproportionate so as to cause such overall commitment to become excessive, and (iii) is fully aware that the purchase of the Securities is a high risk investment;

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xi) The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions from or non-application of the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth herein in order to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Securities. All information which the Subscriber has provided to the Company concerning the Subscriber’s financial position and knowledge of financial and business matters is correct and complete as of the date hereof, and if there should be any material change in such information prior to acceptance of this Agreement by the Company, the Subscriber will immediately provide the Company with such information;

xii) The Subscriber has the requisite power and authority to enter into and perform the transactions contemplated by this Agreement and the purchase of the Securities. The execution, delivery and performance of this Agreement by the Subscriber and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate, partnership or other entity action, and no further consent or authorization of the Subscriber or its Board of Directors, managers, stockholders, members, trustees, holders or partners, as the case may be, as required. When executed and delivered by the Subscriber, this Agreement shall constitute a valid and binding obligation of the Subscriber enforceable against the Subscriber in accordance with its terms;

xiii) The Subscriber has not agreed to act with any of the other investors for the purpose of acquiring, holding, voting or disposing of the Securities purchased hereunder for purposes of Section 13(d) under the Securities Exchange Act of 1934, as amended, and the Subscriber is acting independently with respect to its investment in the Securities; and

xiv) The Subscriber confirms and certifies that:

(a)

The Subscription hereunder is irrevocable by Subscriber, and except as required by law, Subscriber is not entitled to cancel, terminate or revoke this Agreement or any agreements of Subscriber hereunder.

(b)

No federal or state agency has made any findings or determination as to the fairness of the terms of this Offering for investment purposes; or any recommendations or endorsements of the Securities.

(c)

Subscriber is in receipt of and has carefully read and reviewed and understands the Form of Designation of Series B Convertible Preferred Stock attached hereto as Exhibit B , which the Company has either filed with the Secretary of State of Nevada or plans to file with the Secretary of State of Nevada shortly after the execution of this Agreement.

(d)

The Offering is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act and the provisions of Rule 506 of Regulation D and/or Regulation S thereunder, which is in part dependent upon the truth, completeness and accuracy of the statements made by the Subscriber herein.

(e)

These securities have not been registered under the Securities Act, or the California Corporations Code by reason of specific exemptions thereunder relating to the limited availability of the offering. These securities cannot be sold, transferred or otherwise disposed of to any person or entity unless subsequently registered under the Securities Act, or the California Corporations Code, if such registration is required.

(f)

It is understood that in order not to jeopardize the Offering’s exempt status under Section 4(2) of the Securities Act and Regulation D or Regulation S, any transferee may, at a minimum, be required to fulfill the investor suitability requirements thereunder.

(g)

No person or entity acting on behalf, or under the authority, of Subscriber is or will be entitled to any broker’s, finder’s or similar fee or commission in connection with this subscription.

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(h)

IN MAKING AN INVESTMENT DECISION, SUBSCRIBER MUST RELY ON ITS OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

(i)

THIS SUBSCRIPTION DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT PERMITTED UNDER APPLICABLE LAW OR TO ANY FIRM OR INDIVIDUAL THAT DOES NOT POSSESS THE QUALIFICATIONS PRESCRIBED IN THIS SUBSCRIPTION.

(j)

Subscriber, as required by the Internal Revenue Code, certifies under penalty of perjury that 1) the Social Security Number or Federal Identification Number provided below is correct and 2) Subscriber is not subject to backup withholding either because Subscriber has not been notified that Subscriber is subject to backup withholding as a result of a failure to report interest or dividends, or because the Internal Revenue Service has notified Subscriber that Subscriber is no longer subject to backup withholding.

C. Indemnification . Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties in paragraph B hereof, and Subscriber hereby agrees to indemnify and hold harmless the Company and its affiliates, partners, officers, directors, agents, attorneys, and employees from and against any and all loss, damage or liability due to or arising out of a breach of any such representations or warranties and the breach of any representations and warranties whatsoever made herein. Notwithstanding the foregoing, however, no representation, warranty, acknowledgment or agreement made herein by Subscriber shall in any manner be deemed to constitute a waiver of any rights granted to Subscriber under federal or state securities laws. The representations and warranties set forth herein shall survive the date upon which the Subscriber becomes a shareholder of the Company and/or the date of this Agreement in the event the Company does not accept the Subscriber’s subscription. No representation, warranty or covenant in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were or are to be made, not misleading.

D. Compliance with Securities Laws . The Subscriber realizes that the Securities cannot readily be sold and will be restricted securities. Subscriber understands and agrees that a legend has been or will be placed on any certificate(s) or other document(s) evidencing the Securities in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED UNDER ANY SUCH ACTS.”

E. Future Financings and Offerings . Subscriber recognizes that the Company may seek to raise additional financing and working capital through a variety of sources in the future, and that although the Company may undertake one or more public or private offerings of its debt or equity securities, there can be no assurance that any such offering will be made or, if made, that it will be successful. Moreover, Subscriber understands and agrees that the Company reserves the right to make future offers, either public or private, of securities, including, but not limited to, promissory notes, shares of common stock, preferred stock or warrants, on terms that may be more than or less favorable than the Securities. Subscriber further confirms that Subscriber has no right to purchase any securities in any future offerings.

F. Confidentiality . Subscriber agrees to maintain in confidence all information furnished by the Company or its agents that may be deemed to be material nonpublic information, including, but not limited to the fact that the Offering is being made and the terms and conditions of this Offering and the Securities.

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G. U.S.A. Patriot Act and Anti-Money Laundering Representations . Subscriber represents and warrants that Subscriber is not and is not acting as an agent, representative, intermediary or nominee for, a person identified on the list of blocked persons maintained by the Office of Foreign Assets Control, U.S. Department of Treasury. In addition, Subscriber is in full compliance with all applicable U.S. laws, regulations, directives, and executive orders imposing economic sanctions, embargoes, export controls or anti-money laundering requirements, including but not limited to the following laws: (1) the International Emergency Economic Powers Act, 50 U.S.C. 1701-1706; (2) the National Emergencies Act, 50 U.S.C. 1601-1651; (3) section 5 of the United Nations Participation Act of 1945, 22 U.S.C. 287c; (4) Section 321 of the Antiterrorism Act, 18 U.S.C. 2332d; (5) the Export Administration Act of 1979, as amended, 50 U.S.C. app. 2401-2420; (6) the Trading with the Enemy Act, 50 U.S.C. app. 1 et seq.; (7) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56; and (8) Executive Order 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) of September 23, 2001. The Subscriber represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an Office of Foreign Assets Control (“ OFAC ”) list, or a person or entity prohibited under the OFAC Programs.

H. Entire Agreement . This Subscription is the entire and fully integrated agreement of the parties regarding the subject matter hereof, and there are no oral representations, warranties, agreements, or promises pertaining to this Subscription or the Securities.

I. Construction . The parties acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement with its legal counsel and that this Agreement shall be construed as if jointly drafted by the parties hereto. All references in this Agreement as to gender shall be interpreted in the applicable gender of the parties.

J. Purchase Price . The Subscriber agrees to pay the Purchase Price to the Company for the Securities pursuant to the following schedule (the “ Payment Schedule ”), in cash, check or via wire transfer:

(a)$250,000 on or before January 1 st , 2016;

(b)$500,000 on or before July 1 st , 2016; and

(c)$500,000 on or before January 1 st , 2017.

The Subscriber shall be legally obligated and required to pay the full Purchase Price pursuant to the Payment Schedule above for all purposes upon the Subscriber’s execution of this Agreement and the Company’s acceptance of the terms and conditions of this Agreement. Any unpaid portion of the Purchase Price shall be treated as an outstanding promissory note due to the Company from the Subscriber, effective as of the date of this Agreement, which shall be payable in full on or before the applicable date set forth above and shall not accrue any interest prior to the due date of such applicable payment above. Subscriber shall have all right, title and ownership of the Securities purchased pursuant to this Agreement immediately upon the acceptance of this Agreement by the Company. Subscriber agrees to pay the Purchase Price pursuant to the Payment Schedule above.

K. Construction of Terms . As used in this Agreement, the terms “ herein, ” “ herewith, ” “ hereof ” and “ hereunder ” are references to this Agreement, taken as a whole; the term “ includes ” or “ including ” shall mean “ including, without limitation; ” the word “ or ” is not exclusive; and references to a “ Section, ” “ subsection, ” “ clause, ” “ Exhibit, ” “ Appendix, ” “ Schedule, ” “ Annex ” or “ Attachment ” shall mean a Section, subsection, clause, Exhibit, Appendix, Schedule, Annex or Attachment of this Agreement, as the case may be, unless in any such case the context requires otherwise. Exhibits, Appendices, Schedules, Annexes or Attachments to any document shall be deemed incorporated by reference in such document. All references to or definitions of any agreement, instrument or other document (a) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (b) except as otherwise expressly provided, shall mean such agreement, instrument or document, or replacement or predecessor thereto, as modified, amended, supplemented and restated through the date as of which such reference is made.

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L. Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. A copy of this Agreement signed by one party and (a) faxed to another party or (b) scanned and emailed to another party, shall be deemed to have been executed and delivered by the signing party as though an original. A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

M. Severability . The holding of any provision of this Preferred Stock Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Preferred Stock Subscription Agreement, which shall remain in full force and effect.

N. Further Assurances . The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Preferred Stock Subscription Agreement.

O. Governing Law . This Agreement shall be interpreted in accordance with the laws of the State of Nevada. In the event of a dispute concerning this Agreement, the parties agree that venue lies in a court of competent jurisdiction in any California court.

P. Remedies . The remedies provided in this Agreement shall be cumulative and in addition to all other remedies available under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief).

Q. Collection of Personal Information . The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is subscribing) acknowledges and consents to the fact the Company is collecting the Subscriber’s (and any beneficial purchaser’s) personal information pursuant to this Agreement. The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is subscribing) acknowledges and consents to the Company retaining the personal information for as long as permitted or required by applicable law or business practices. The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is subscribing) further acknowledges and consents to the fact the Company may be required by applicable securities laws and stock exchange rules to provide regulatory authorities any personal information provided by the Subscriber respecting itself (and any beneficial purchaser). By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s (and any beneficial purchaser’s) personal information. The Subscriber also consents to the filing of copies or originals of any of the Subscriber’s documents described herein as may be required to be filed with any stock exchange or securities regulatory authority in connection with the transactions contemplated hereby. The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgments set out in this paragraph on behalf of all beneficial purchasers.

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Social Security or Taxpayer I.D. Number: 450-88-8126

Address of Subscriber:

1 Elm Street, Denver, Colorado 80220

(720) 550-8386

escheffey@yahoo.com

EXECUTION

Please execute this Preferred Stock Subscription Agreement by completing the appropriate section below.

/s/ Eric H. Scheffey, MD

Signature of Subscriber

Eric H. Scheffey, MD

Name (please type or print)

_____________________________________________

Signature of Spouse or Co-Owner if funds are to be invested as joint tenants by the entirety or community property.

_____________________________________________

Name (please type or print)

ACCEPTED BY THE COMPANY this the 7 day of December 2015.

Code Green Apparel Corp.

/s/ George J. Powell, III

George J. Powell, III

Chief Executive Officer

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EXHIBIT A

CERTIFICATION OF ACCREDITED INVESTOR STATUS

Except as may be indicated by the undersigned below, the undersigned represents, warrants and certifies that he, she or it is an “ accredited investor, ” as that term is defined in Rule 501 1 of Regulation D of the Securities Act of 1933, as amended (the “ Securities Act ”). The undersigned has initialed the line below indicating (a) the basis on which he, she or it is representing his, her or its status as an “ accredited investor ”; or (b) that the undersigned is not an “ accredited investor ”, at the request of Code Green Apparel Corp., a Nevada corporation (the “ Company ”). The representation and confirmation below as part of this Certification of Accredited Investor Status (the “ Certification ”) shall be effective for all purposes and shall be able to be relied upon by the Company, its legal counsel and assigns for any and all purposes, until such time, if ever, as the undersigned has advised the Company that the representations below are no longer accurate or correct.

By initializing below the undersigned confirms, acknowledges and represents that he, she or it, is an “ accredited investor ” because he, she or it is:

_______

a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “ Securities Exchange Act ”); an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are “ accredited investors ”;

_______

a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

_______

an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

_______

a natural person whose individual net worth, or joint net worth with the undersigned’s spouse, at the time of this purchase exceeds $1,000,000. For purposes of this item, “ net worth ” means the excess of total assets at fair market value (including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total liabilities. Total liabilities excludes any mortgage on the primary home in an amount of up to the home’s estimated fair market value as long as the mortgage was incurred more than 60 days before the subscription date, but includes (i) any mortgage amount in excess of the home’s fair market value and (ii) any mortgage amount that was borrowed during the 60-day period before the subscription date;

a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the undersigned’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. “ Income ” for this purpose is computed by adding the following items to adjusted gross income for federal income tax purposes: (a) the amount of any tax-exempt interest income received; (b) the amount of losses claimed as a limited partner in a limited partnership; (c) any deduction claimed for depletion; (d) deductions for alimony paid; (e) deductible amounts contributed to an IRA or Keogh retirement plan; and (f) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code;

1 http://www.law.cornell.edu/cfr/text/17/230.501

_______

a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring any securities of the Company, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment;

_______

an entity (other than a trust) in which all of the equity holders are “ accredited investors ” by virtue of their meeting one or more of the above standards, not formed for the specific purpose of acquiring any securities of the Company; or

_______

a director, executive officer, or general partner of Code Green Apparel Corp., or any director, executive officer, or general partner of a general partner of Code Green Apparel Corp.;

_______

by initializing to the left or failing to initial one of the requirements above, the undersigned confirms, acknowledges and represents that he, she or it, is not an “ accredited investor ” because he, she or it does not meet one of the requirements above.

* * * * * * * * * * * * * * *

The undersigned agrees that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the undersigned as set forth herein. All information which the undersigned has provided to the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

IN WITNESS WHEREOF , the undersigned has executed this Certification of Accredited Investor Status on December 7, 2015.

By: /s/ Eric H. Scheffey, MD

Signature

Printed Name of Signatory: Eric H. Scheffey, MD

NEVADA	5699	80-0250289
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	x


Title of each class of Securities to be Registered	Amount of Shares to be Registered (1)	Proposed Maximum offering Price per share	Proposed Maximum Aggregate offering Price	Amount of Registration Fee
Common Stock	44,308,609	$0.037	$1,639,418.53	$165.09
Total	44,308,609	$0.037	$1,639,418.53	$165.09

		Page
PROSPECTUS SUMMARY		1
SUMMARY FINANCIAL INFORMATION		3
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS		4
RISK FACTORS		5
USE OF PROCEEDS		10
DILUTION		10
SELLING SECURITY HOLDERS		11
PLAN OF DISTRIBUTION		11
DESCRIPTION OF SECURITIES		12
INTEREST OF NAMED EXPERTS AND COUNSEL		14
DESCRIPTION OF BUSINESS		15
DESCRIPTION OF PROPERTY		20
SHELL COMPANY STATUS		21
LEGAL PROCEEDINGS		21
MARKET FOR COMMON EQUITY AND OTHER RELATED STOCKHOLDER MATTERS		21
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		22
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		29
DIRECTORS, EXECUTIVE OFFICER, AND CONTROL PERSONS		29
EXECUTIVE COMPENSATION		32
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		32
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		33
REPORTS TO SECURITY HOLDERS		33
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES		33
FINANCIAL STATEMENTS		F-1

	SEPTEMBER 30, 2015 (UNAUDITED)			DECEMBER 31, 2014
ASSETS

CURRENT ASSETS

Cash	$	166,570		$	10,009
Inventory		199,324			-
TOTAL CURRENT ASSETS		365,894			10,009

Fixed assets, net		1,687			2,024

TOTAL ASSETS	$	367,581		$	12,033

LIABILITIES

CURRENT LIABILITIES

Accounts payable	$	153,973		$	138,473
Accrued interest		68,685			33,777
Convertible debts payable		500,000			673,500
Derivative liability		1,117,488			200,337

TOTAL CURRENT LIABILITIES		1,840,146			1,046,087

TOTAL LIABILITIES		1,840,146			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 – 361,438,646 and 252,952,540 shares, respectively		361,440			252,953
Additional paid-in capital		9,823,037			8,56,025
Accumulated deficit		(11,657,043	)		(9,851,032	)

TOTAL STOCKHOLDERS’ DEFICIT		(1,472,565	)		(1,034,054	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	367,581		$	12,033

Name Of Selling Stockholder	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 (1)	Percentage of Outstanding Shares To Be Owned After The Offering (1)
Chris Margaritas	7,066,666	1.90%	400,000	6,666,666	1.80%
Demetrios Tataridas	1,666,666	*	833,333	833,333	*
Eric H. Scheffey	35,000,000	9.43%	35,000,000	*	*
Eric Rose	1,562,500	*	781,250	781,250	*
Niko Kabylafkas	4,806,168	1.29%	1,332,159	3,474,009	*
Patrick A Langlais	291,666	*	291,666	-	*
Pete Contos	3,604,752	*	1,802,376	1,802,376	*
Sam Hitman	2,083,333	*	1,041,667	1,041,667	*
Steve Kabylafkas	3,806,166	1.02%	982,158	2,824,008	*
Themistocles Papadimitropoulos	4,610,000	1.24%	1,844,000	2,766,000	*

	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.

	2015			2014

Revenue, net	$	-		$	-

Operating expenses:
Selling, general and administrative		351,890			132,351
Total operating expenses		351,890			132,351

Loss from operations		(351,890	)		(132,351	)

Net loss	$	(351,890	)	$	(132,351	)

	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	Director, Chief Executive Officer, Interim Chief Financial Officer, and Secretary	April 26, 2014
Thomas H. Witthuhn	62	Director and Chief Operating Officer,	January 12, 2016


●	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	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	All other Compensation ($)	Total ($)

George J. Powell, III	CEO, President and Chairman	2014	$180,000 (1)	--	$1,412,110 (2)	--	--	$1,592,110

Name and Address Beneficial Owner (1)		No. of Shares Before Offering	No. of Shares After Offering	Percentage of Before Offering	Ownership After Offering
George J Powell III 2300 Wing Point Lane Plano, TX 75093		89,115,016	89,115,016	24.0%	24.0%
Dr. Eric H. Scheffey 1 Elm Street Denver, CO 80220		35,000,000	- 0 -	9.43%	- 0 -
Beaufort Capital Partners, LLC 660 White Plains Road, Suite 455 Tarrytown, NY 10591		24,000,000	24,000,000	6.46%	6.46%
Thomas H. Witthuhn 1310 East Ocean #703 Long Beach, CA 90802	10,000,000		10,000,000	2.69%	2.69%


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 nine months ended September 30, 2015 and 2014								F-13 to F-22

		For the Years Ended December 31,
	2014			2013

REVENUE, net	$	-		$	-

OPERATING EXPENSES
Selling, general and administrative		2,136,924			57,949

TOTAL OPERATING EXPENSES		2,136,924			57,949

LOSS FROM OPERATIONS		(2,136,924	)		(57,949	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative		300,505			-
Interest expense		(534,619)			-

TOTAL OTHER INCOME (EXPENSE)		(234,114)			-

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			-
Non-cash issuance of convertible debt 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	)

(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.

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014

REVENUE, net	$	-		$	-		$	-		$	-

OPERATING EXPENSES
Selling, general and administrative		351,890			132,351			1,806,011			2,616,501

TOTAL OPERATING EXPENSES		351,890			132,351			1,806,011			2,616,501

LOSS FROM OPERATIONS		(351,890	)		(132,351	)		(1,806,011	)		(2,616,501	)

LOSS BEFORE INCOME TAXES		(351,890	)		(132,351	)		(1,806,011	)		(2,616,501	)

Income tax expense		-			-			-			-

NET LOSS	$	(351,890	)	$	(132,351	)	$	(1,806,011	)	$	(2,616,501	)

NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		330,671,531			252,231,236			295,046,465			211,174,640

	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		-			-	85,676,666		85,677		809,323		-			895,000

Issuance of shares for services		1,000			1	8,150,000		8,150		290,849		-			299,000

Issuance of shares for convertible debt		-			-	14,660,440		14,660		158,840		-			173,500

Net loss		-			-	-		-		-		(1,806,011	)		(1,806,011	)

Balance, September 30, 2015		1,000		$	1	361,439,646	$	361,440	$	9,823,037	$	(11,657,043	)	$	(1,472,565	)

Balance at December 31, 2014	$	-
Initial measurement at issuance date of the notes		200,337
Change in derivative liability during the six months ended September 30, 2015		917,151
Balance September 30, 2015	$	1,117,488

	September 30, 2015		December 31, 2014

Raw materials	$	190,358	$	-
Work in process		-		-
Finished goods		8,966		-
		199,324		-
Less Inventory Reserve		-		-
Total	$	199,324	$	-

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	Previously filed on Form S-1 on August 4th, 2015
5.1	Form of Attorney’s Opinion and Consent	Filed herewith
23.1	Consent of Independent Auditor	Filed herewith
99.1	Investor Subscription Agreement	Previously filed on Amendment Form S-1 on November 13, 2015
99.2	Employment Agreement	Previously filed on Amendment Form S-1 on November 13, 2015
99.3	Certificate of Designation of Series B Convertible Preferred Stock	Filed herewith
99.4	Investor Subscription Agreement for Series B Convertible Preferred Stock	Filed herewith
99.5	Exchange Agreement	Filed herewith

If stock certificates are to be issued, in the following name and to the following address:	If DWAC is permissible, to the following brokerage account:
__________________________________ __________________________________ __________________________________ __________________________________ __________________________________	Broker: ____________________________________ DTC No.: ___________________________________ Acct. Name: _________________________________ For Further Credit (if applicable): ____________________________________