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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________________________________________________
FORM 10-Q
__________________________________________________________________________________
x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2014
o Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to__________
Commission File Number: 333-148190
MOJO Organics, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 26-0884348 | |
|
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| 101 Hudson Street, 21st Floor, Jersey City, New Jersey 07302 |
| (Address of principal executive offices) |
201 633 6519
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. o Yes x No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| o | Large accelerated filer Accelerated filer | o | Accelerated filer |
| o | Non-accelerated filer | x | Smaller reporting company |
| (Do not check if a smaller reporting company) | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 16,907,396 shares of common stock as of October 1, 2014.
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | ||
| ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | |
| Condensed Balance Sheets as of September 30, 2014 and December 31, 2013 | F-1 | |
| Condensed Statements of Operations for the three months and the nine months ended September 30, 2014 and September 30, 2013 | F-2 | |
| Condensed Statements of Cash Flows for the nine months ended September 30, 2014 and September 30, 2013 | F-3 | |
| Condensed Statements of Stockholders’ Equity / (Deficit) as of September 30, 2014 and December 31, 2013 | F-4 | |
| Notes to the Condensed Financial Statements | F-5 | |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 1 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 3 |
| ITEM 4. | CONTROLS AND PROCEDURES | 3 |
| PART II – OTHER INFORMATION | ||
| ITEM 1. | LEGAL PROCEEDINGS | 4 |
| ITEM 1A. | RISK FACTORS | 4 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 4 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 4 |
| ITEM 4. | MINE SAFETY DISCLOSURE | 4 |
| ITEM 5. | OTHER INFORMATION | 4 |
| ITEM 6. | EXHIBITS | 5 |
| SIGNATURES | 6 | |
| F- 1 |
| F- 2 |
| F- 3 |
| F- 4 |
MOJO ORGANICS, INC.
Notes to Condensed Financial Statements
September 30, 2014
NOTE 1 – BUSINESS AND BASIS OF PRESENTATION
Overview
MOJO Organics, Inc. (“MOJO” or the “Company”) was incorporated in the State of Delaware on August 2, 2007. Headquartered in Jersey City, NJ, the Company engages in the product development, production, marketing and distribution of CHIQUITA TROPICALS™. CHIQUITA TROPICALS™ are 100% fruit juices, produced under license agreement from Chiquita Brands L.L.C. (“Chiquita”). The Company currently produces four flavors: Banana Strawberry, Mango, Passion Fruit and Pineapple.
CHIQUITA TROPICALS™ first became commercially available in the New York tri-state area and on Amazon.com in late July 2013. In February, 2014, the Company expanded its sales to the west coast, New England and Central America. To grow its sales, the Company utilizes food brokers and distributors as well as selling direct to certain large retail chain stores.
Interim Financial Statements
The accompanying unaudited interim condensed financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q and article 10 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited interim condensed financial statements included in this document have been prepared on the same basis as the annual financial statements, and in the Company’s opinion, reflect all adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the nine months ended September 30, 2014 are not necessarily indicative of the results that the Company will have for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The condensed financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash equivalents include investment instruments and time deposits purchased with a maturity of three months or less.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or market. When necessary, the Company provides allowances to adjust the carrying value of its inventories to the lower of cost or net realizable value.
Supplier Deposits
Supplier Deposits consist of prepaid inventory for which the Company has not yet taken delivery.
Property and Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is computed using the straight line method over the estimated useful life of the respective assets. Computer equipment is depreciated over a period of 3 - 5 years. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. At September 30, 2014 and December 31, 2013, accumulated depreciation related to property and equipment was $4,646 and $1,553, respectively.
Preferred Stock Classification
Preferred Stock issued by the Company which meets certain redemption or conversion features is classified as temporary or mezzanine capital in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) topic 480, “ Distinguishing Liabilities from Equity .”
Revenue Recognition
Revenues from sales of products are recognized at the time of delivery when title and risk of loss passes to the customer. Recognition of revenue also requires reasonable assurance of collection of sales proceeds.
| F- 5 |
Deductions from Revenue
Costs incurred for sales incentives and discounts are accounted for as a reduction in revenue. These costs include payments to customers for performing merchandising activities on our behalf, including in-store displays, promotions for new items and obtaining optimum shelf space.
Shipping and Handling Costs
Shipping and Handling Costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line selling, general and administrative expenses in our Statements of Operations.
Net Loss Per Common Share
The Company computes per share amounts in accordance with ASC Topic 260, “ Earnings per Share ”. ASC Topic 260 requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted average number of shares of common stock and common stock equivalents outstanding during the periods. The conversion of Series A Preferred Stock and options was excluded from the computation of diluted shares outstanding for the three months and nine months ended September 30, 2013. The loss for the period would have had an anti-dilutive impact on the Company’s net loss per common share.
The following potentially dilutive securities have been excluded from the computation of weighted average shares outstanding for the three months and nine months ended September 30, 2014 and 2013, as they would have had an anti-dilutive impact on the Company’s net loss per common share:
| 2014 |
2013
|
|||
| Shares underlying options outstanding | 830,000 | 210,000 | ||
| Shares underlying warrants outstanding | 1,114,776 | - | ||
| Total | 1,944,776 | 210,000 | ||
Start-Up Costs
In accordance with ASC topic 720-15, “ Start-Up Costs ,” the Company charges all costs associated with its start-up operations to income as incurred.
Income Taxes
The Company provides for income taxes under ASC topic 740, “ Income Taxes ,” which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC Topic 740 also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Tax returns for the years from 2009 to 2013 are subject to examination by tax authorities.
Stock-Based Compensation
ASC Topic 718, “ Accounting for Stock-Based Compensation ” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, warrants, employee stock purchase plans and stock appreciation rights.
ASC Topic 718 requires employee compensation expense to be recorded using the fair value method. The Company accounts for employee stock based compensation in accordance with the provisions of ASC Topic 718. For non-employee options and warrants, the company uses the fair value method as prescribed in ASC Topic 718.
Derivative Instruments
The Company’s derivative liabilities are related to embedded conversion features issued in connection with the Series A Preferred Stock. For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period. The Company uses the Black-Scholes model to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with ASC Topic 815, “ Derivatives and Hedging .” Derivative instrument liabilities are classified in the balance sheets as current or non-current based upon whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
Fair value of financial instruments
The carrying amounts of financial instruments, which include accounts payable, accrued expenses and debt obligations approximate their fair values due to their short-term nature and/or variable interest rates. The Company’s debt obligations bear interest at rates which approximate prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximate fair value.
| F- 6 |
The Company adopted ASC Topic 820, “ Fair Value Measurement ,” which established a framework for measuring fair value and expands disclosure about fair value measurements. ASC Topic 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Topic 820 describes the following three levels of inputs that may be used:
| · | Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,, unrestricted assets or liabilities; | |
| · | Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; | |
| · | Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
The Company did not have any assets or liabilities measured at fair value on a recurring basis at September 30, 2014 or December 31, 2013. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the periods ended September 30, 2014 or December 31, 2013.
New Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-12, “ Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period must be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-12 on the Company's financial statements.
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).
The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on the Company’s financial statements.
Management does not believe that any other recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. For the nine months ended September 30, 2014, the Company incurred a net loss from continuing operations of $3,941,648. As of September 30, 2014, the Company had accumulated losses of $17,063,370, which includes accumulated losses from discontinued operations of $8,576,094.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully obtain and retain customers in order to achieve profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – INVENTORY
As of September 30, 2014, inventory consisted of finished goods of $358,920 and raw materials of $169,765. At December 31, 2013, the inventory balance of $87,805 consisted of raw materials.
NOTE 5 – SERIES A CONVERTIBLE PREFERRED STOCK
On January 12, 2013, the Company entered into an amended and restated securities purchase agreement for the offer and sale of its Series A Convertible Preferred Stock, par value $0.001 (“Series A Preferred Stock”) at a price of $4.00 per share. In connection with the private sale of its Series A Preferred Stock, the Company raised gross proceeds of $790,834, including $378,700 from the conversion of promissory notes. Each share of Series A Preferred Stock was convertible into 10 shares of the Company’s Common Stock determined by dividing $4.00 by the conversion price of $0.40.
| F- 7 |
The Series A Preferred Stock includes embedded anti-dilutive provisions that meet the defined criteria of a derivative liability as described in ASC Topic 815, “ Derivatives and Hedging ,” and therefore require bifurcation. These embedded derivatives include certain conversion features indexed to the Company's Common Stock. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related items at their fair values as of the date of issue and at fair value as of each subsequent balance sheet date. Changes in the fair value are charged to income at the end of each reporting period.
During the year ended December 31, 2013, a total of 197,708.5 shares of the Series A Preferred Stock had been converted into 1,977,085 shares of Common Stock. As of September 30, 2014 and December 31, 2013, there were zero shares of Series A Preferred Stock issued and outstanding.
NOTE 6 – STOCKHOLDERS’ EQUITY
The Company has authorized 10,000,000 shares of preferred stock (“Preferred Stock”) and 190,000,000 shares of common stock (“Common Stock”), each having a par value of $0.001.
In March 2013, the Company approved the 2012 Long-Term Incentive Equity Plan (the “2012 Plan”), which provides the Company with the ability to issue stock options, stock appreciation rights, restricted stock and/or other stock based awards for up to an aggregate of 2,050,000 shares of Common Stock.
Stock Splits
On April 1, 2013, the Company effected a one-for-ten reverse stock split of the issued and outstanding shares of Common Stock (the “Reverse Split”). The number of authorized shares and the par value of the Common Stock were not changed. The accompanying financial statements have been restated to reflect this reverse stock split.
Private Placement Offerings
In March 2014, the Company consummated two concurrent private placement offerings (the “2014 Offerings”), receiving an aggregate of $1,819,832, net of expenses, from accredited investors. In one of the offerings, the Company sold an aggregate of 917,582 shares of Common Stock for $0.91 per share for a total of $835,000. For each share purchased in this offering, investors received an immediately exercisable, five year warrant to purchase one share of Common Stock at a price of $0.91 per share. In the concurrent offering, the Company sold 1,098,091 shares of Common Stock for $0.91 per share for a total of $1,000,000. The investor in the concurrent offering did not receive warrants.
On May 1, 2013, the Company commenced a private placement offering of up to 1,250,000 shares of its Common Stock (the “Private Placement”) at a price of $0.40 per share pursuant to subscription agreements entered into with each investor. As of June 18, 2013, the last date of the offering, 1,171,705 shares of Common Stock were sold, raising an aggregate of $468,682, which amount included the conversion of $20,000 of notes then outstanding.
Treasury Stock
In April 2014, the Company approved a repurchase of 12,497 shares of Common Stock for $11,372. The shares were subsequently cancelled.
Stock Incentive Plans
In August 2014, the Company granted certain directors and employees of the Company stock options pursuant to the 2012 Plan to purchase 620,000 shares of Common Stock at an exercise price of $0.255 per share, which was the closing price at the date of grant. The options become exercisable over a period of two years and expire in August 2019.
In July 2013, the Company granted certain directors and employees of the Company stock options pursuant to the 2012 Plan to purchase 210,000 shares of Common Stock at an exercise price of $2.07 per share, which was 115% of the last sale price of the Common Stock on the date of grant. The options became exercisable in July 2014 and expire in July 2015.
In connection with the stock option issuances, compensation expense of $60,300 was recorded during the nine months ended September 30, 2014.
Restricted Stock Compensation
In August 2014, the Company issued 1,500,000 shares of Common Stock to an executive officer. The shares are subject to a restricted stock agreement, and the vesting is conditional upon the Company reaching certain performance goals. Should the executive officer’s employment with the Company end, any unvested shares are forfeited.
In March 2014, the Company issued 465,000 shares of Common Stock under the 2012 Plan to certain of its directors, executive officers and employees. The shares are subject to a restricted stock agreement, pursuant to which the shares will vest one year from the date of such agreement if the grantee is a director or employee (as applicable) of the Company at the time.
| F- 8 |
A summary of the restricted stock issuances to directors, officers and employees is as follows:
|
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
| Unvested share balance, January 1, 2013 | 4,453,516 | $ | 1.35 | |||||
| Granted | 608,441 | 2.15 | ||||||
| Vested | (88,309 | ) | 1.40 | |||||
| Forfeited | (183,240 | ) | 1.40 | |||||
| Unvested share balance, December 31, 2013 | 4,790,408 | $ | 1.45 | |||||
| Granted | 1,965,000 | .25 | ||||||
| Vested | (54,975 | ) | 1.40 | |||||
| Forfeited | - | - | ||||||
| Unvested share balance, September 30, 2014 | 6,700,433 | $ | 1.10 | |||||
In connection with the issuance of restricted stock, the Company recorded share-based compensation expense of $2,853,881 and $1,281,462 for the nine months ended September 30, 2014 and 2013, respectively. With the exception of 2,665,251 shares which vest based upon achieving certain milestones, the Company records compensation expense over the vesting period based upon the fair market value on the date of grant for each share, adjusted for forfeitures. As of September 30, 2014, there was $3,955,729 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation. That cost is expected to be recognized during the years 2014 through 2016.
Stock Warrants
In March 2014, the Company issued warrants to purchase shares of Common Stock at a price of $0.91 per share. The warrants are exercisable for five years from the date of issuance.
The following table summarizes warrant activity during the period:
|
Number of Warrants |
||||
| Outstanding at January 1, 2014 | - | |||
| Issued for services | 197,194 | |||
| Issued in connection with the 2014 Offerings | 917,582 | |||
| Outstanding at September 30, 2014 | 1,114,776 | |||
| Exercisable at September 30, 2014 | 1,114,776 | |||
The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of issuance for the warrants for the nine months ended September 30, 2014:
| September 30, 2014 | ||||
| Volatility | 174 | % | ||
| Expected term (years) | 5 | |||
| Risk-free interest rate | 1.53 | % | ||
| Dividend yield | 0 | % | ||
In connection with the issuance of warrants for services rendered, compensation expense of $246,479 and advisory fees of $18,460 were recorded during the nine months ended September 30, 2014. Since the warrants are fully vested, there is no future cost to the Company in connection with the warrants. Warrants issued to investors as part of the 2014 Placements had no impact, and will have no future impact, on the Company’s statement of operations.
Advisory Services
In March 2014, the Company entered into two agreements pursuant to which the Company will receive advisory services related to strategy, distributorship, sales and sales channels and investor relations. The Company granted to each advisor 100,000 shares of restricted Common Stock, subject to forfeiture if the advisor terminates or materially breaches the agreement before the six-month anniversary thereof. The aggregate value of the advisory fees of $260,000 was calculated based upon the closing price of the Company’s Common Stock on the date of the agreement, and was charged to income during the nine months ended September 30, 2014.
Also in March 2014, the Company issued 82,418 and 1,234 shares of Common Stock for advisory work and consulting work, respectively. The number of shares issued was calculated based upon the fair market value of the stock.
| F- 9 |
On October 3, 2013, the Company entered into an advisor agreement whereby the Company would receive strategic business advisory services, distributorship advisory services, sales and sales channel advisory services and investor relation advisory services in exchange for the issuance of 50,000 shares of restricted Common Stock. The Common Stock vested on April 3, 2014. In connection with this issuance, the Company recorded $75,000 in consulting fees during the nine months ended September 30, 2014.
On October 3, 2013, the Company entered into an agreement for strategic business advisory services, public relations services and investor relations services with Mr. Ian Thompson. In connection with this agreement, the Company issued 167,204 shares of restricted Common Stock and recorded consulting fees of $501,612 during 2013, which was the fair market value of the stock on the date of issue; there was no cash payment to Mr. Thompson by the Company. The stock is fully vested; however it is restricted from trading. The advisor was also issued an additional 200,000 shares of restricted Common Stock, which was to vest quarterly based upon the Company reaching certain market capitalization and revenue goals, in addition to providing the above services, with the last tranche vesting scheduled to vest on June 30, 2014. Throughout the term of the agreement, the Company requested the advisor to render performance under the agreement and to provide evidence of same. The Company believes, however, that Mr. Thompson failed to perform in all material respects under the terms of the agreement. On June 27, 2014, the Company terminated the agreement. Accordingly, the final tranche of 50,000 shares did not vest. Further, the Company is taking all necessary steps for the cancellation of the other shares totaling 317,204 shares, due to lack of delivery of consideration and breach of the agreement.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Lease Commitment
The Company entered into an office service agreement for office space for a term of 12 months effective February 11, 2014. The base monthly office fee under that agreement is $1,147. Prior to that, the Company rented its office space on a month to month basis.
Licensing Agreement
On August 15, 2012, the Company entered into a license agreement (“License Agreement”) for the use of a third party’s marks in the manufacture, sale, promotion, marketing, advertising and distribution of certain fruit juice products in select containers. The License Agreement grants the Company an exclusive license in Connecticut, New Jersey and New York and a non-exclusive license for the other states in the United States not included in the exclusive license, plus Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The term of the License Agreement is for seven years from July 2013 (the date that the Company first invoiced customers for products sold under the License Agreement), subject to the Company meeting certain minimum sales volume and/or minimum royalty payments. Termination of the License Agreement could have a material and adverse impact on the Company’s business. Future minimum royalty payments (in thousands) are $507 for 2014, $1,265 for 2015, $1,850 for 2016, $2,611 for 2017 and $11,617 for 2018 to 2020. As of September 30, 2014, the Company has accrued $253,612 for royalty payments.
NOTE 8 – RELATED PARTY TRANSACTIONS
The Company issued 23,272 shares of Common Stock to its chief executive officer as payment of salary due for January and February 2014 in lieu of cash. The shares were valued by the Company at the closing price of the Company’s Common Stock on the last trading day of the applicable month for which payment was due.
In December 2013, the Company received $24,000 in non-interest bearing, demand loans from certain related parties. The loans were repaid in full by February 2014.
During the year ended December 31, 2013, the Company issued 42,714 shares of Common Stock to employees in lieu of an aggregate of $100,692 cash salaries. In addition, accrued salary amounting to $141,200 and $20,000 was converted into 35,300 shares of Series A Preferred Stock and 50,000 shares of Common Stock as part of the Private Placement, respectively.
On January 31, 2013, the balance of notes outstanding to related parties of $237,500 was converted into 59,375 shares of Series A Preferred Stock. Accrued interest of $7,261 was paid to the holders of the notes.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events,” the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the financial statements. The effects of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements as of September 30, 2014. In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these financial statements were issued.
| F- 10 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report includes a number of forward looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward looking statements, which apply only as of the date of this annual report. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. MD&A is organized as follows:
| · | Critical Accounting Policies — Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. | |
| · | Results of Operations — Analysis of our financial results comparing the three months ended and nine months ended September 30, 2014 to 2013. Liquidity and Capital Resources — Analysis of changes in our cash flows, and discussion of our financial condition and potential sources of liquidity. |
CRITICAL ACCOUNTING POLICIES
We have prepared our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”), which requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. We base these significant judgments and estimates on historical experience and other applicable assumptions we believe to be reasonable based upon information presently available. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Actual results could materially differ from our estimates under different assumptions, judgments or conditions.
All of our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, to our financial statements, included elsewhere in this Quarterly Report. We have identified the following as our critical accounting policies and estimates, which are defined as those that are reflective of significant judgments and uncertainties, are the most pervasive and important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions, judgments or conditions.
We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements:
Use of Estimates — The financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Stock-based Compensation — ASC Topic 718, “ Accounting for Stock-Based Compensation ” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights.
ASC Topic 718 requires employee compensation expense to be recorded using the fair value method. The Company accounts for employee stock based compensation in accordance with the provisions of ASC Topic 718. For non-employee options and warrants, the company uses the fair value method as prescribed in ASC Topic 718.
Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company uses the Black-Scholes option-pricing option model to value its stock option awards which incorporate the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life.
Fair Value of Financial Instruments — Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments without extended maturities. We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts.
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Recent Accounting Pronouncements
For information with respect to recent accounting pronouncements, if any, and the impact of these pronouncements on the Company’s financial statements, see Note 2 to the Notes to Condensed Financial Statements included in this Quarterly Report.
COMPANY OVERVIEW
Headquartered in Jersey City, New Jersey, the Company engages in product development, production, marketing and distribution of CHIQUITA TROPICALS™. CHIQUITA TROPICALS™ are 100% fruit juices produced under license agreement from Chiquita Brands L.L.C. (“Chiquita”).
We believe in safe and sustainable corporate practices. We are proud to use Rainforest Alliance Certified fruits, which help the farmers and their families while being environmentally, socially and economically sustainable.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2014 and 2013
Revenues
During the three months ended September 30, 2014, the Company reported revenue of $85,760. Sales were primarily comprised of orders from distributors and direct sales distributors (“DSDs”). Sales to distributors, primarily C&S Wholesale Grocers, and DSDs, primarily Great State Beverage Inc. and Elmhurst Dairy Inc., amounted to 70% and 21%, respectively, of total revenue. The Company has exclusive agreements with several DSDs that cover certain geographical areas. There are no contracts with our other customers. During the three months ended September 30, 2013, the Company reported revenue of $186,391. This revenue was comprised of sales to Eastern Distributors and Wholesome Choice, Inc.
All of the Company’s revenue for the three months ended September 30, 2014 and 2013, was derived from the sale of products under the License Agreement. The License Agreement with Chiquita provides for minimum sales volume requirements for each six month contract period. Chiquita may terminate the License Agreement should the Company fail to meet its minimum sales volume for any two consecutive contract periods. The Company did not meet its minimum sales volume requirement during the year ended December 31, 2013 and the six months ended June 30, 2014. Chiquita is aware of the Company not meeting these requirements and has informed the Company that it will not elect to terminate the License Agreement at this time. Chiquita will evaluate the relationship at the end of the next six month period (December 31, 2014).
Cost of Revenues
Cost of Revenues includes production costs, raw material costs, and consideration in the form of free product offered to certain new customers. As a result, cost of revenues as a percentage of sales can vary from period to period. For the three months ended September 30, 2014, cost of revenues was $96,463, or 112% of revenues. This amount includes expenses for consideration offered to establish major new customers. For the three months ended September 30, 2013, cost of revenues was $166,664, or 89% of revenues.
Operating Expenses
For the three months ended September 30, 2014, operating expenses were $1,280,597, an increase of $548,922 or 75% over operating expenses for the three months ended September 30, 2013 of $731,675. Stock-based compensation costs, which consist of charges to income for vesting in connection with restricted stock issuances, stock options and warrants, were $844,784 for the three months ended September 30, 2014, compared to $452,512 for the corresponding period in 2013. This increase of $392,271 represents 71% of the increase in total operating expenses. The balance of the increase consisted primarily of increased marketing, promotional, selling and licensing fees for the three months ended September 31, 2014 compared to the corresponding prior year period.
Net Loss
For the three months ended September 30, 2014 and 2013, the Company had net losses of $1,291,204 and $711,948, respectively. This increase in net loss of $579,256 is primarily attributable to the increase in operating expenses.
Nine Months Ended September 30, 2014 and 2013
Revenues
During the nine months ended September 30, 2014, the Company reported revenue of $247,538. Sales were primarily comprised of orders from distributors, major grocers and DSDs. Sales to distributors, consisting of C&S Wholesale Grocers, Bozzuto’s, Inc. and several other distributors, amounted to 44% of total revenue. This was followed by sales to major grocers, including Albertsons LLC and Stater Bros, and DSDs, including Great State Beverage Inc., Pine State Beverage Co., and Elmhurst Dairy Inc., of 26% and 19% of total revenue, respectively. The Company has exclusive agreements with several DSDs that cover certain geographical areas. There are no contracts with our other customers. During the nine months ended September 30, 2013, sales amounted to $186,391 and were comprised of sales to Eastern Distributors and Wholesome Choice, Inc.
All of the Company’s revenue for the nine months ended September 30, 2014 and 2013 were derived from the sale of products under the License Agreement. The License Agreement with Chiquita provides for minimum sales volume requirements for each six month contract period. Chiquita may terminate the License Agreement should the Company fail to meet its minimum sales volume for any two consecutive contract periods. The Company did not meet its minimum sales volume requirement during the year ended December 31, 2013 and the six months ended June 30, 2014. Chiquita is aware of the Company not meeting these requirements and has informed the Company that it will not elect to terminate the License Agreement at this time. Chiquita will evaluate the relationship at the end of the next six month period (December 31, 2014).
Cost of Revenues
Cost of Revenues includes production costs and raw material costs and consideration in the form of free product offered to certain new customers. As a result, cost of revenues as a percentage of sales can vary from period to period. For the nine months ended September 30, 2014, cost of revenues was $252,860. For the nine months ended September 30, 2014, cost of revenues was $166,664.
Operating Expenses
For the nine months ended September 30, 2014, operating expenses were $3,936,731, an increase of $2,123,503 or 117% over operating expenses for the nine months ended September 30, 2013 of $1,813,228. Stock-based compensation costs, which consist of charges to income for vesting in connection with restricted stock issuances, stock options and warrants, were $2,914,181 for the nine months ended September 30, 2014, compared to $1,366,720 for the corresponding period in 2013. This increase of $1, 547,461 represents 73% of the increase in total operating expenses. Marketing, promotional, selling and licensing fees were $508,612 for the nine months ended September 30, 2014, compared to $59,258 for the corresponding period in 2013. This increase of $449,354 represents 21% of the total increase in operating costs.
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Net Loss
For the nine months ended September 30, 2014 and 2013, the Company had net losses of $3,941,648 and $1,797,108, respectively. This increase in net loss of $2,144,540 is primarily attributable to the increase in operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
During the nine months ended September 30, 2014, the Company received net cash proceeds of $1,819,832 from the sale of Common Stock and warrants to purchase Common Stock in concurrent private placements consummated in March 2014. As of September 30, 2014, the Company had working capital of $747,230.
Working Capital Needs
The Company is currently not generating sufficient cash flow to internally fund operations and continue our planned growth. As a result, we will need to raise additional financing. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company expects that any sale of additional equity securities or convertible debt will result in additional dilution to our stockholders. In addition, the Company may not be able to obtain additional debt or equity financing on terms acceptable to it, or at all. If the Company is not able to secure additional capital, it could be required to delay paying its account payables or forego business opportunities.
OFF-BALANCE SHEET ARRANGEMENTS
The Company had no off-balance sheet arrangements as of September 30, 2014.
GOING CONCERN
The Company’s financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to successfully obtain and retain customers in order to achieve profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act of 1934 (the “Exchange Act”) is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Under the supervision and with the participation of the Company’s senior management, consisting of the Company’s principal executive and financial officer and the Company’s principal accounting officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, the Company’s principal executive and financial officer and the Company’s principal accounting officer concluded, as of the Evaluation Date, that the Company’s disclosure controls and procedures were effective.
Although we have voluntarily filed Exchange Act reports in the past, we have historically had difficulty timely compiling the information necessary for such reports given our limited accounting staff and resources. Our ability to file our Exchange Act reports as and when required will be part of our evaluation of our internal controls and procedures. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.
As previously reported the Company does not have an audit committee and is not obligated to have one. Although it remains management’s view that such a committee is an important internal control over financial reporting, management does not believe that the lack of an audit committee could result in a material misstatement in the Company’s financial statements in the near future. Accordingly, management has concluded that this deficiency alone does not constitute a material weakness in the Company’s internal control over financial reporting, and has considered the foregoing in its determination that the Company’s internal controls over financial reporting and its disclosure controls and procedures were effective as of the Evaluation Date.
Changes in Internal Controls over Financial Reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Our business is largely predicated on our relationship with Chiquita Brands and an adverse change in this relationship would materially and adversely affect our business.
We produce all of our current products under our license agreement with Chiquita Brands, as described in this prospectus. The License Agreement provides for minimum sales volume requirements for each six month contract period. Chiquita Brands L.L.C. may terminate the License Agreement should the Company fail to meet its minimum sales volume requirements for any two consecutive contract periods. The Company did not meet its minimum sales volume requirements during the six month periods ended December 31, 2013 and June 30, 2014. Chiquita is aware of the Company not meeting these requirements and has informed the Company that it will not elect to terminate the License Agreement at this time. Chiquita will evaluate the relationship at the end of the next six month period (December 31, 2014). In the event the license agreement is terminated or not renewed at the end of its initial term, we would no longer be able to produce and market our Chiquita branded juice products. While we would be able to produce juice products under our own name, MOJO Organics, using our own suppliers and manufacturers, in the event of a termination of our relationship with Chiquita, the inherent marketing and distribution value of the MOJO Organics brand related to the Chiquita brand would be lost and it is very likely that our business operations, product salability and financial performance would be materially and adversely effected, at least in the short term.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On August 12, 2014, the Company entered into a Restricted Stock Agreement with Mr. Spinner in connection with his employment as Chief Operating Officer, whereby he received 1,500,000 shares of common stock that vest in three tranches based on the achievement of certain performance goals.
On August 14, 2014, the Company issued an aggregate of 620,000 shares of common stock to its officers and directors under the Company’s 2012 Long-Term Incentive Equity Plan (the “2012 Plan”). Such shares are subject to a Stock Option Agreement between each grantee and the Company, pursuant to which such shares will vest on February 14, 2015, August 15, 2015, February 14, 2016 and August 14, 2016 at $0.255 per share, provided the grantee is still an officer or director of the Company (as applicable).
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS
The following Exhibits are being filed with this Quarterly Report on Form 10-Q:
| Exhibit No. | Description | |
| 10.1 | Form of Restricted Stock Agreement, dated August 12, 2014, between MOJO Organics, Inc. and Peter Spinner. † | |
| 10.2 | Form of Stock Option Agreement under the 2012 Long-Term Incentive Equity Plan, dated August 14, 2014, between MOJO Organics, Inc. and each of Glenn Simpson, Peter Spinner, Richard Seet, Jeffrey Devlin and Marianne Vignone. † | |
| 10.3 | Employment Agreement, dated August 12, 2014, between MOJO Organics, Inc. and Peter Spinner. † | |
| 31.1/31.2 | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1/32.2 | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
† Management compensation contract or arrangement
* Furnished herewith. This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MOJO ORGANICS, INC. | ||
| Dated: October 2, 2014 | By: | /s/Glenn Simpson |
|
Glenn Simpson, Chief Executive Officer and Chairman (Principal Executive and Principal Financial Officer) |
||
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RESTRICTED STOCK AGREEMENT
AGREEMENT made as of the 12 th day of August, 2014, by and between Mojo Organics, Inc., a Delaware corporation (the “Company”), and Peter Spinner (the “Executive”).
WHEREAS, on August 12, 2014, the Company’s Board of Directors (“Board”) determined to issue to the Executive 1,500,000 shares of common stock of the Company, $.001 par value (“Shares”); and
WHEREAS, potential investors in the Company have demanded that the initial vesting period of the Shares.
IT IS AGREED:
1. Grant of Restricted Shares .
(i) The Company hereby issues to the Executive 1,500,000 Shares on the terms and conditions set forth herein. All of the Shares shall be subject to forfeiture during the period terminating August 12, 2019 (“Restriction Period”). The Shares shall be represented by three stock certificates registered in the name of the Executive, each of which shall represent 500,000 Shares. The certificates (collectively, the “Restricted Share Certificates”) shall bear the legends set forth in Sections 5(v) and 5(vi) of this Agreement. The Restricted Share Certificates shall be deposited by the Executive with the Company, together with stock powers endorsed in blank, which will permit transfer to the Company of all or any portion of the Shares represented by such certificates (the “Restricted Shares”) that shall be forfeited or shall not become vested in accordance with the terms of this Agreement.
(ii) After issuance, the Restricted Shares shall constitute issued and outstanding shares of Common Stock for all corporate purposes unless and until forfeited in accordance with the terms hereof. The Executive shall have the right to vote such Restricted Shares, to receive and retain all cash dividends as the Board may, in its sole discretion, pay on such Restricted Shares, and to exercise all of the rights, powers and privileges of a holder of Common Stock with respect to such Restricted Shares, except that (a) the Executive shall not be entitled to delivery of the Restricted Share Certificates until the Restricted Shares represented by the Restricted Share Certificates vest in accordance with subparagraph (iii) below; and (b) other than cash dividends as the Board, in its sole discretion, distributes, the Company will retain custody of all distributions (“Retained Distributions”) made or declared with respect to the Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and conditions as applicable to the Restricted Shares) until such time, if ever, as the Restricted Shares with respect to which such Retained Distributions shall have been distributed have become vested.
(iii) Assuming, Executive is still employed with the Company, (a) if the Company’s average monthly revenues are at least $300,000 per month over a six consecutive month period, or the Company has a market cap of at least $21,600,000 for a 180 day period, 500,000 of the Restricted Shares and the Retained Distributions with respect thereto shall become vested, (b) if the Company’s average monthly revenues are at least $600,000 per month over a six consecutive month period, or the Company has a market cap of at least $43,200,000 for a 180 day period, an additional 500,000 of the Restricted Shares and the Retained Distributions with respect thereto shall become vested and (c) if the Company’s average monthly revenues are at least $900,000 per month over a six consecutive month period, or the Company has a market cap of at least $64,800,000 for a 180 day period, the final 500,000 of the Restricted Shares and the Retained Distributions with respect thereto shall become vested. After the date that any of the Restricted Shares become vested, upon the request of the Executive, the Company shall promptly instruct its transfer agent to issue and deliver to the Executive a new certificate for the Shares that have vested, which certificate shall not bear the legend set forth in Section 5(vi). If, at any time prior to the vesting of the Restricted Shares in accordance with this Section 1(iii), the Executive’s employment with the Company is terminated, then the Restricted Shares that have not then vested (and the Retained Distributions with respect thereto) shall be forfeited to the Company and the Executive shall not thereafter have any rights with respect to such Restricted Shares. Notwithstanding the foregoing, if Executive’s employment with the Company is terminated at any time other than by the Company for “Cause” or by the Executive without “Good Reason” (each as defined in the Executive’s employment agreement with the Company), then all of the Restricted Shares shall automatically vest.
(iv) Nothing in this Agreement shall confer on the Executive any right to continue in the employ of, or other relationship with, the Company (or with any parent, subsidiary or affiliate of the Company) or limit in any way the right of the Company (or of any parent, subsidiary or affiliate of the Company) to terminate the Executive’s employment or other relationship with the Company (or with any parent, subsidiary or affiliate of the Company) at any time, with or without cause.
2. Withholding Tax . The Company shall have the right to withhold from Executive that number of Shares having a Fair Market Value (as defined below) equal to the minimum amount of any federal, state or local income and/or payroll taxes required by law to be withheld and to take such other action as the Board may deem advisable to enable the Company and Executive to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the vesting of Shares. Solely for purposes of this section, “Fair Market Value” means as of any given date: (i) if the Shares are listed on a national securities exchange or The Nasdaq Stock Market, LLC (“Nasdaq”), the last sale price of the Shares in the principal trading market for the Shares on such date, as reported by the exchange or Nasdaq, as the case may be; (ii) if the Shares are not listed on a national securities exchange or Nasdaq, but are traded in the over-the-counter market, the closing bid price for the Shares on such date, as reported by the OTC Bulletin Board or Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair market value of the Shares cannot be determined pursuant to clause (i) or (ii) above, such price as the Board shall determine, in good faith.
3. Nonassignability of Restricted Shares . The Restricted Shares shall not be assignable or transferable until they have vested.
4. Company Representations . The Company hereby represents and warrants to the Executive that:
(i) the Company, by appropriate and all required action, is duly authorized to enter into this Agreement and consummate all of the transactions contemplated hereunder; and
(ii) the Shares, when issued and delivered by the Company to the Executive in accordance with the terms and conditions hereof, will be duly and validly issued and fully paid and non-assessable.
5. Executive Representations . The Executive hereby represents and warrants to the Company that:
(i) he is acquiring the Shares for his own account and not with a view towards the distribution thereof;
(ii) he understands that he must bear the economic risk of the investment in the Shares, which cannot be sold by him unless they are registered under the Securities Act of 1933, as amended (“Securities Act”), or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Shares for sale under the Securities Act;
(iii) in his position with the Company, he has had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense;
(iv) he is aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Shares in the absence of registration under the Securities Act or an exemption therefrom as provided herein; and
(v) the certificates evidencing the Shares shall bear the following legend:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM UNDER SAID ACT.”
(vi) the certificates evidencing the Restricted Shares shall also bear the following legend:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT TO A RESTRICTED STOCK AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE COMPANY, AND MAY NOT BE TRANSFERRED, PLEDGED OR DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF.”
6. Restriction on Transfer of Shares . Anything in this Agreement to the contrary notwithstanding, the Executive hereby agrees that he shall not sell, transfer by any means or otherwise dispose of the Shares acquired by him without registration under the Securities Act, or in the event that they are not so registered, unless (i) an exemption from the Securities Act registration requirements is available thereunder, and (ii) the Executive has furnished the Company with notice of such proposed transfer and the Company’s legal counsel, in its reasonable opinion, shall deem such proposed transfer to be so exempt. Further, the Executive agrees that he shall abide by all of the Company’s policies in effect at the time the Shares vest and thereafter, including the Company’s Insider Trading Policy, with respect to the ownership and trading of the Company’s securities.
7. Miscellaneous .
7.1 Notices . All notices, requests, deliveries, payments, demands and other communications that are required or permitted to be given under this Agreement shall be in writing and shall be either delivered personally or sent by registered or certified mail, or by private courier, return receipt requested, postage prepaid to the Company at its principal executive office and to the Executive at his address set forth below, or to such other address as either party shall have specified by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as provided herein.
7.2 Waiver . The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach.
7.3 Entire Agreement . This Agreement constitute the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be amended except by writing executed by the Executive and the Company. The Original Agreement is superseded in all respects by this Agreement, and the Original Agreement is no longer of any effect.
7.4 Binding Effect; Successors . This Agreement shall inure to the benefit of and be binding upon the parties hereto and, to the extent not prohibited herein, their respective heirs, successors, assigns and representatives. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns and representatives any rights, remedies, obligations or liabilities.
7.5 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to choice of law provisions).
7.6 Headings . The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first above written.
| EXECUTIVE: | MOJO ORGANICS, INC | |
| By: | ||
| Peter Spinner | Name: | |
| Title: | ||
| Address of Executive: |
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 14 th day of August, 2014 by and between Mojo Organics, Inc., a Delaware corporation (“Company”), and _____________ (“Employee”).
WHEREAS, pursuant to the terms and conditions of the Company’s 2012 Long-Term Incentive Equity Plan (“Plan”), the Board of Directors of the Company (“Board”) authorized the grant to the Employee of an option (“Option”) to purchase an aggregate of _______ shares of the authorized but unissued common stock of the Company, $0.001 par value (“Common Stock”), conditioned upon the Employee’s acceptance thereof upon the terms and conditions set forth in this Agreement and subject to the terms of the Plan (capitalized terms used herein and not otherwise defined have the meanings set forth in the Plan); and
WHEREAS, the Employee desires to acquire the Option on the terms and conditions set forth in this Agreement and subject to the terms of the Plan;
IT IS AGREED:
1. Grant of Stock Option . The Company hereby grants to the Employee the right and option to purchase all or any part of an aggregate of ___________ shares of the Common Stock (“Option Shares”) on the terms and conditions set forth herein and subject to the provisions of the Plan.
2. Non-Incentive Stock Option . The Option represented hereby is not intended to be an Option that qualifies as an “Incentive Stock Option” under Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price . The exercise price (“Exercise Price”) of the Option is $0.255 per share, subject to adjustment as hereinafter provided.
4. Exercisability . Subject to the terms and conditions of the Plan and this Agreement, this Option shall become exercisable (a) on February 14, 2015, _____ of the Option Shares shall become exercisable; (b) on August 14, 2015, _____ of the Option Shares shall become exercisable; (c) on February 14, 2016, _____ of the Option Shares shall become exercisable; and (d) on August 14, 2016 the remaining _____ Option Shares shall become exercisable (the “Exercise Period”).
5. Effect of Termination of Employment .
5.1. Termination Due to Death . If Employee’s employment by the Company terminates by reason of death, the portion of the Option, if any, that was exercisable as of the date of death may thereafter be exercised by the legal representative of the estate or by the legatee of the Employee under the will of the Employee, for a period of six months from the date of such death or until the expiration of the Exercise Period, whichever period is shorter. The portion of the Option, if any, that was not exercisable as of the date of death shall immediately terminate upon death.
5.2. Termination Due to Disability . If Employee’s employment by the Company terminates by reason of Disability, the portion of the Option, if any, that was exercisable as of the date of termination of employment may thereafter be exercised by the Employee or legal representative for a period of six months from the date of such termination or until the expiration of the Exercise Period, whichever period is shorter. The portion of the Option, if any, that was not exercisable as of the date of disability shall immediately terminate upon disability.
5.3. Termination Due to Retirement . If Employee’s employment by the Company terminates due to Normal Retirement, then the portion of the Option that was exercisable as of the date of termination of employment may be exercised for a period of six months from the date of such termination or until the expiration of the Exercise Period, whichever is shorter. The portion of the Option not yet exercisable on the date of termination of employment shall immediately expire.
5.4. Termination by the Company Without Cause . If Employee’s employment is terminated by the Company without cause, then the portion of the Option which has vested by the date of termination of employment may be exercised for a period of three months from termination of employment or until the expiration of the Exercise Period, whichever is shorter. The portion of the Option, if any, not yet exercisable on the date of termination of employment shall immediately expire.
5.5. Other Termination .
5.5.1. If Employee’s employment is terminated for any reason other than (i) death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the Company, the Option shall expire on the date of termination of employment.
5.5.2. In the event the Employee’s employment is terminated by the Company for cause, the Board, in its sole discretion, may annul any award granted hereunder and require the Employee to return to the Company the economic benefit of any Option Shares purchased hereunder by the Employee within the six month period prior to the date of termination. In such event, the Employee hereby agrees to remit to the Company, in cash, an amount equal to the difference between the Fair Market Value of the Option Shares on the date of termination (or the sales price of such Shares if the Option Shares were sold during such six month period) and the Exercise Price of such Shares.
5.6. Competing With the Company . If Employee’s employment with the Company or a Subsidiary is terminated for any reason whatsoever, and within 12 months after the date thereof such Employee either (i) accepts employment with any competitor of, or otherwise engages in competition with, the Company or any of its Subsidiaries, (ii) solicits any customers or employees of the Company or any of its Subsidiaries to do business with or render services to the Employee or any business with which the Employee becomes affiliated or to which the Employee renders services or (iii) uses or discloses to anyone outside the Company any confidential information or material of the Company or any of its Subsidiaries in violation of the Company’s policies or any agreement between the Employee and the Company or any of its Subsidiaries, the Board, in its sole discretion, may require such Employee to return to the Company the economic value of any award that was realized or obtained by such Employee at any time during the period beginning on the date that is six months prior to the date such Employee’s employment with the Company is terminated. In such event, Employee agrees to remit the economic value to the Company in accordance with Section 5.5.2.
6. Withholding Tax . Not later than the date as of which an amount first becomes includible in the gross income of the Employee for Federal income tax purposes with respect to the Option, the Employee shall pay to the Company, or make arrangements satisfactory to the Board regarding the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount (“Withholding Tax”). The obligations of the Company under the Plan and pursuant to this Agreement shall be conditional upon such payment or arrangements with the Company and the Company shall, to the extent permitted by law, have the right to deduct any Withholding Taxes from any payment of any kind otherwise due to the Employee from the Company.
7. Adjustments . In the event of any change in the shares of Common Stock of the Company as a whole occurring as the result of a common stock split, or reverse split, common stock dividend payable on shares of Common Stock, combination or exchange of shares, or other extraordinary or unusual event occurring after the grant of the Option, the Board shall determine, in its sole discretion, whether such change equitably requires an adjustment in the terms of this Option or the aggregate number of shares reserved for issuance under the Plan. Any such adjustments will be made by the Board, whose determination will be final, binding and conclusive.
8. Method of Exercise .
8.1. Notice to the Company . The Option shall be exercised in whole or in part by written notice in substantially the form attached hereto as Exhibit A directed to the Company at its principal place of business accompanied by full payment as hereinafter provided of the exercise price for the number of Option Shares specified in the notice and of the Withholding Taxes, if any.
8.2. Delivery of Option Shares . The Company shall deliver a certificate for the Option Shares to the Employee as soon as practicable after payment therefor.
8.3. Payment of Purchase Price .
8.3.1. Cash Payment . The Employee shall make cash payments by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; the Company shall not be required to deliver certificates for Option Shares until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof.
8.3.2. Cashless Payment . Provided that prior approval of the Company has been obtained, the Employee may use Common Stock of the Company owned by him or her to pay the purchase price for the Option Shares by delivery of stock certificates in negotiable form which are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances. Shares of Common Stock used for this purpose shall be valued at the Fair Market Value on the date of exercise.
8.3.3. Payment of Withholding Tax . Any required Withholding Tax may be paid in cash or with Common Stock in accordance with Sections 8.3.1 and 8.3.2.
8.3.4. Exchange Act Compliance . Notwithstanding the foregoing, the Company shall have the right to reject payment in the form of Common Stock if in the opinion of counsel for the Company, (i) it could result in an event of “recapture” under Section 16(b) of the Securities Exchange Act of 1934; (ii) such shares of Common Stock may not be sold or transferred to the Company; or (iii) such transfer could create legal difficulties for the Company.
9. Transfer . Except as may be set forth in the next sentence of this Section or in the Agreement, the Stock Option shall not be transferable by the Employee other than by will or by the laws of descent and distribution, and the Option shall be exercisable, during the Employee’s lifetime, only by the Employee (or, to the extent of legal incapacity or incompetency, the Employee’s guardian or legal representative).
10. Company Representations . The Company hereby represents and warrants to the Employee that:
(i) the Company, by appropriate and all required action, is duly authorized to enter into this Agreement and consummate all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the Employee in accordance with the terms and conditions hereof, will be duly and validly issued and fully paid and non-assessable.
11. Employee Representations . The Employee hereby represents and warrants to the Company that:
(i) he or she is acquiring the Option and shall acquire the Option Shares for his own account and not with a view towards the distribution thereof;
(ii) he or she has received a copy of the Plan as in effect as of the date of this Agreement;
(iii) he or she has received a copy of all reports and documents required to be filed by the Company with the Securities and Exchange Commission pursuant to the Exchange Act, within the last 24 months and all reports issued by the Company to its stockholders;
(iv) he or she understands that he or she is subject to the Company’s Insider Trading Policy and has received a copy of such policy as of the date of this Agreement;
(v) he or she understands that he or she must bear the economic risk of the investment in the Option Shares, which cannot be sold by him or her unless they are registered under the Securities Act of 1933 (“1933 Act”) or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act;
(vi) in his or her position with the Company, he or she has had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (iii) above;
(vii) he or she is aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein; and
(viii) if, at the time of issuance of the Option Shares, the issuance of such shares have not been registered under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legends:
“The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.”
“The shares represented by this certificate have been acquired pursuant to a Stock Option Agreement dated as of August 14, 2014, a copy of which is on file with the Company, and may not be transferred, pledged or disposed of except in accordance with the terms and conditions thereof."
12. Restriction on Transfer of Option Shares . Anything in this Agreement to the contrary notwithstanding, the Employee hereby agrees that he or she shall not sell, transfer by any means or otherwise dispose of the Option Shares acquired by him or her without registration under the 1933 Act, or in the event that they are not so registered, unless (i) an exemption from the 1933 Act registration requirements is available thereunder, (ii) the Employee has furnished the Company with notice of such proposed transfer and the Company’s legal counsel, in its reasonable opinion, shall deem such proposed transfer to be so exempt, and (iii) such transfer is in compliance with the Company’s Insider Trading Policy, as in effect at such time.
13. Miscellaneous .
13.1. Notices . All notices, requests, deliveries, payments, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be either delivered personally or sent by registered or certified mail, or by private courier to the parties at their respective addresses set forth herein, or to such other address as either party shall have specified by notice in writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as provided herein.
13.2. Conflicts with the Plan . In the event of a conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall in all respects be controlling.
13.3. Employee and Stockholder Rights . The Employee shall not have any of the rights of a stockholder with respect to the Option Shares until such shares have been issued after the due exercise of the Option. Nothing contained in this Agreement shall be deemed to confer upon Employee any right to continued employment with the Company or any subsidiary thereof, nor shall it interfere in any way with the right of the Company to terminate Employee in accordance with the provisions regarding such termination set forth in Employee’s written employment agreement with the Company, or if there exists no such agreement, to terminate Employee at will.
13.4. Waiver . The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach.
13.5. Entire Agreement . This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be amended except by writing executed by the Employee and the Company.
13.6. Binding Effect; Successors . This Agreement shall inure to the benefit of and be binding upon the parties hereto and, to the extent not prohibited herein, their respective heirs, successors, assigns and representatives. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns and representatives any rights, remedies, obligations or liabilities.
13.7. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to choice of law provisions).
13.8. Headings . The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first above:
| MOJO ORGANICS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| [OFFICER OF DIRECTOR]: | ||
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
____________________
DATE
MOJO ORGANICS, INC.
101 Hudson Street 21st Floor
Jersey City, New Jersey
Attention: Chief Executive Officer
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of with Mojo Organics, Inc. (“Company”), I hereby irrevocably elect to exercise the right to purchase _________ shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), which are being purchased for investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable box[es]):
| ☐ | a [personal check] [certified check] [bank check] payable to the order of “Mojo Organics, Inc.” in the sum of $_________; |
| ☐ | confirmation of wire transfer in the amount of $_____________; and/or |
| ☐ | with the consent of the Company, a certificate for __________ shares of the Company’s Common Stock, free and clear of any encumbrances, duly endorsed, having a Fair Market Value (as such term is defined in the 2012 Long-Term Incentive Equity Plan) of $_________. |
I hereby represent and warrant to, and agree with, the Company that:
(i) I am acquiring the Option Shares for my own account, for investment, and not with a view towards the distribution thereof;
(ii) I have received a copy of the Plan and all reports and documents required to be filed by the Company with the Commission pursuant to the Exchange Act within the last 24 months and all reports issued by the Company to its stockholders;
(iii) I understand that I must bear the economic risk of the investment in the Option Shares, which cannot be sold by me unless they are registered under the Securities Act of 1933 (“1933 Act”) or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act;
(iv) I agree that I will not sell, transfer by any means or otherwise dispose of the Option Shares acquired by me hereby except in accordance with Company’s policy, if any, regarding the sale and disposition of securities owned by employees and/or directors of the Company;
(v) in my position with the Company, I have had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (ii) above;
(vi) my rights with respect to the Option Shares shall, in all respects, be subject to the terms and conditions of the Company’s 2012 Long-Term Incentive Equity Plan and the Agreement.
(vii) I am aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein; and
(viii) if, at the time of issuance of the Option Shares, the issuance of such shares have not been registered under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legends:
“The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.”
“The shares represented by this certificate have been acquired pursuant to a Stock Option Agreement dated as of , a copy of which is on file with the Company, and may not be transferred, pledged or disposed of except in accordance with the terms and conditions thereof."
(ix) I am aware and understand that I may be subject to an Insider Trading Policy.
Kindly forward to me my certificate at your earliest convenience.
| Very truly yours, | ||
| (Signature) | (Address) | |
| (Print Name) | ||
| (Social Security Number) |
Exhibit 31.1/31.2
FORM OF CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
CERTIFICATIONS
I, Glenn Simpson, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of MOJO Organics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the issuer is made known to me by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the issuer's most recent fiscal quarter (the issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.
| MOJO ORGANICS, INC. | ||
| Dated: October 2, 2014 | By: | /s/Glenn Simpson |
|
Glenn Simpson, Chief Executive Officer and Chairman (Principal Executive and Principal Financial Officer) |
||
Exhibit 32.1/32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of MOJO Organics, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
| MOJO ORGANICS, INC. | ||
| Dated: October 2, 2014 | By: | /s/Glenn Simpson |
|
Glenn Simpson, Chief Executive Officer and Chairman (Principal Executive and Principal Financial Officer) |
||