UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
The Alkaline Water Company Inc.
(Exact
name of registrant as specified in its charter)
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Nevada
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99-0367049
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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8541 E
Anderson Drive, Suite 100
Scottsdale, Arizona 85255
(Address
of Principal Executive Offices)(Zip Code)
2020 Equity Incentive Plan
(Full
title of the plan)
InCorp Services, Inc.
3773 Howard Hughes Pkwy., Suite 500S
Las Vegas, Nevada 89169-6014
(Name
and address of agent for service)
(702) 866-2500
(Telephone number, including area code, of agent for service)
Copies of all communications to:
Clark Wilson LLP
Suite 900 - 885 West Georgia Street
Vancouver, British Columbia V6C 3H1, Canada
Telephone: (604) 687-5700
Attention: Mr. Virgil Z. Hlus
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of "large accelerated filer,"
"accelerated filer," "smaller reporting company," and "emerging
growth company" in Rule 12b-2 of the Exchange Act.
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filer |
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Accelerated
filer |
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| Non-accelerated
filer |
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Smaller reporting
company |
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Emerging growth
company |
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities
Act.
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EXPLANATORY NOTE
On February 28, 2020, our board of
directors adopted the 2020 Equity Incentive Plan, pursuant to which
we may grant stock options to acquire up to a maximum of 9,000,000
shares of our common stock and non-stock option awards to acquire
up to a maximum of 1,650,000 shares of our common stock. On
September 29, 2021, our stockholders approved the increase in the number of shares
of our common stock available for grant of non-stock option awards
under our 2020 Equity Incentive Plan by 3,000,000 shares. On
September 27, 2022, our stockholders approved the increase in the number of shares
of our common stock available for grant of non-stock option awards
under our 2020 Equity Incentive Plan by 5,000,000
shares.
We prepared this registration
statement in accordance with the requirements of Form S-8 under the
Securities Act of 1933, to register an aggregate of additional
5,000,000 shares of our common stock that are issued and issuable
pursuant to our 2020 Equity Incentive Plan.
The additional shares being
registered in this registration statement on Form S-8 are of the
same class as securities covered by the registration statement on
Form S-8 (Registration No. 333-237876) filed on April 28, 2020 and
the registration statement on Form S-8 (Registration No.
333-262188) filed on January 14, 2022, the contents of which are
incorporated herein by reference in accordance with General
Instruction E to Form S-8, to the extent not otherwise amended or
superseded by the content of this registration statement.
The purpose of our 2020 Equity
Incentive Plan is to (a) enable our company and any of our
affiliates to attract and retain the types of employees,
consultants, directors and such other persons as the plan
administrator may select who will contribute to our company's long
range success; (b) provide incentives that align the interests of
employees, consultants, directors and such other persons as the
plan administrator may select with those of the stockholders of our
company; and (c) promote the success of our company's business. A
total of 9,000,000 shares of our common stock are available for the
grant of stock options and a total of 9,650,000 shares of our
common stock are available for the grant of non-stock option awards
under the 2020 Equity Incentive Plan and awards that may be granted
under the plan includes incentive stock options, non-qualified
stock options, stock appreciation rights, restricted awards,
performance compensation awards and other equity-based awards.
We have previously filed
registration statements on Form S-8 (Registration No. 333-209065,
Registration No. 333-200837 and Registration No. 333-192601) to
register an aggregate of 7,700,000 shares of our common stock (on a
post-split basis) that are issuable pursuant to our 2013 Equity
Incentive Plan, a registration statement on Form S-8 (Registration
No. 333-237876) to register an aggregate of 5,171,612 shares of our
common stock that are issuable pursuant to our 2018 Stock Option
Plan and an aggregate of 10,650,000 shares of our common stock that
are issuable pursuant to our 2020 Equity Incentive Plan and a
registration statement on Form S-8 (Registration No. 333-262188) to
register an additional 3,000,000 shares of our common stock that
are issued and issuable pursuant our 2020 Equity Incentive
Plan.
Pursuant to Rule 429 promulgated
under the Securities Act of 1933, a prospectus relating to this
registration statement is a combined prospectus relating also to
the registration statement on Form S-8 (Registration No.
333-192601) filed on November 27, 2013, the registration statement
on Form S-8 (Registration No. 333-200837) filed on December 10,
2014, the registration statement on Form S-8 (Registration No.
333-209065) filed on January 20, 2016, the registration statement
on Form S-8 (Registration No. 333-237876) filed on April 28, 2020
and the registration statement on Form S-8 (Registration No.
333-262188) filed on January 14, 2022. In addition, this
registration statement, which is a new registration statement, also
constitutes a post-effective amendment to the registration
statement on Form S-8 (Registration No. 333-192601) filed on
November 27, 2013, the registration statement on Form S-8
(Registration No. 333-200837) filed on December 10, 2014, the
registration statement on Form S-8 (Registration No. 333-209065)
filed on January 20, 2016, the registration statement on Form S-8
(Registration No. 333-237876) filed on April 28, 2020, and the
registration statement on Form S-8
(Registration No. 333-262188) filed on January 14, 2022.
The combined Section 10(a)
prospectus for our 2020 Equity Incentive Plan updates, among other
things, certain information regarding our 2020 Equity Incentive
Plan, including the
increase in the number of shares of our common stock available for
grant of non-stock option awards under our 2020 Equity Incentive
Plan by 5,000,000 shares.
Under cover of this registration
statement on Form S-8 is a combined reoffer prospectus prepared in
accordance with Part I of Form S-3 under the Securities Act of 1933
(in accordance with Section C of the General Instructions to Form
S-8). The reoffer prospectus may be used for reoffers and resales
of up to an aggregate of 7,925,000 "restricted securities" and/or
"control securities" (as such terms are defined in Form S-8) issued
or to be issued pursuant to our 2013 Equity Incentive Plan, our
2018 Stock Option Plan or our 2020 Equity Incentive Plan on a
continuous or delayed basis in the future. The combined reoffer
prospectus updates, among other things, certain information
regarding the ownership of our common stock by the selling
stockholders and the number of shares of our common stock available
for resale by each selling shareholder.
Part I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
Item 1. Plan
Information.*
Item 2. Registrant
Information and Employee Plan Annual Information.*
* The document(s) containing the
information specified in Part I of Form S-8 will be sent or given
to participants of our 2013 Equity Incentive Plan, 2018 Stock
Option Plan or 2020 Equity Incentive Plan as specified by Rule
428(b)(1) under the Securities Act of 1933. Such documents are not
being filed with the Securities and Exchange Commission, but
constitute, along with the documents incorporated by reference into
this registration statement, a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933.
Reoffer Prospectus
7,925,000
Shares
The Alkaline Water Company Inc.
Common Stock
_________________________________
The selling stockholders identified
in this reoffer prospectus may offer and sell up to 7,925,000
shares of our common stock issued or to be issued pursuant our 2013
Equity Incentive Plan, our 2018 Stock Option Plan or our 2020
Equity Incentive Plan.
The selling stockholders may sell
all or a portion of the shares being offered pursuant to this
reoffer prospectus at fixed prices, at prevailing market prices at
the time of sale, at varying prices or at negotiated prices.
The selling stockholders and any
brokers executing selling orders on their behalf may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933,
in which event commissions received by such brokers may be deemed
to be underwriting commissions under the Securities Act of
1933.
We will not receive any proceeds
from the sale of the shares of our common stock by the selling
stockholders. We may, however, receive proceeds upon exercise of
the stock options by the selling stockholders. We will pay for
expenses of this offering, except that the selling stockholders
will pay any broker discounts or commissions or equivalent expenses
and expenses of their legal counsel applicable to the sale of their
shares.
Our common stock is listed for
trading on the Nasdaq Capital Market and the Canadian Securities
Exchange under the symbol "WTER". On December 28, 2022, the last
reported sales prices of our common stock on the Nasdaq Capital
Market and the Canadian Securities Exchange were $0.1723 per share
and CDN$0.245 per share, respectively.
_________________________________
Investing in our common stock
involves risks. See "Risk Factors" beginning on page 9.
_________________________________
Neither the Securities and
Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this
reoffer prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
_________________________________
The date of this reoffer prospectus
is December 28, 2022.
As used in this reoffer prospectus,
the terms "we", "us" "our" and "Alkaline" refer to The Alkaline
Water Company Inc., a Nevada corporation, and its wholly-owned
subsidiary, Alkaline 88, LLC, an Arizona Limited Liability Company,
unless otherwise specified. All dollar amounts refer to U.S.
dollars unless otherwise indicated.
Prospectus Summary
Our Business
Overview
Founded in 2012, our company is
headquartered in Scottsdale, Arizona. Its flagship product,
Alkaline88®, is a leading premier alkaline water brand available in
bulk and single-serve sizes along with eco-friendly aluminum
packaging options. With its innovative, state-of-the-art
proprietary electrolysis process, Alkaline88® delivers perfect 8.8
pH balanced alkaline drinking water with trace minerals and
electrolytes and boasts our trademarked label 'Clean Beverage.'
Quickly being recognized as a growing lifestyle brand, we launched
our CBD water and Alkaline88® Sports Drinks. Our hemp-derived CBD
water products are produced and sold in compliance with the
Agriculture Improvement Act of 2018 (also known as the 2018 Farm
Bill, Public Law 115-334).
Our bottled alkaline water product
is presently available in over 75,000 stores in all 50 states, the
District of Columbia, the Caribbean and in Mexico and Canada. We
distribute our product through several channels. We sell through
large national distributors (UNFI, KeHE, C&S, and Core-Mark),
which together represent over 150,000 retail outlets. We also sell
our products directly to retail clients, including convenience
stores, natural food products stores, large ethnic markets and
national retailers and through Direct Store Distributors in
selected markets, including Columbia Distributing, Mahaska, Nevada
Beverage, and Hensley, covering Nevada, Arizona, Pacific Northwest
and Midwest region. Combined, they service over 25,000 customers in
eight states. Each one carries our full line of non-CBD waters.
Some examples of retail clients are: Walmart, CVS, Rite-Aid, Family
Dollar, Food Lion, Albertson's/Safeway, Kroger companies, Sam's
Club, Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas',
Stater Bros. Markets, Unified Grocers, Bristol Farms, Publix,
Vallarta, Superior Foods, Ingles, Shaw's, Raley's, Harris Teeter,
Festival Foods, HEB and Brookshire's. The majority of our sales to
retail clients are through brokers and distributors, however, sales
to our larger retail clients are often direct to the client's own
warehouse distribution network. Our full line of Alkaline88®
bottled water products and sports drinks are presently available
for purchase at www.alkaline88.com and www.thealkalinewaterco.com.
Our CBD water products are presently available for purchase on our
CBD E-commerce website, www.a88cbd.com, in addition to a growing
number of brick and mortar retail locations.
Our operating subsidiary, Alkaline
88, LLC, operates primarily as a marketing, distribution, and
manufacturing company for our alkaline bottled water products. It
has entered into co-packing agreements with nine different bottling
companies located in Virginia, Georgia, California, Texas,
Wisconsin, Nevada and Arizona to act as co-packers for our product.
Our current capacity at all plants exceeds approximately $14.0
million per month wholesale.
Our component materials are readily
available through multiple vendors. Our principal suppliers are Vav
Plastics Inc., Amcor Inc., Smurfit, and Goodpac.
Brand Extensions
During our fiscal year 2022 and in an
effort to meet what we believe is increasing consumer demand for a
variety of CBD infused beverage products, we began selling a line
of Alkaline88®CBD infused bottled water through ecommerce at
www.a88cbd.com. Currently, our Alkaline88®CBD infused bottled water
products are available for purchase on our E-commerce website,
www.a88cbd.com, various third party ecommerce sites, and a growing
number of brick and mortar retail locations throughout the United
States. As of the date of this reoffer prospectus, the FDA has not
made a determination that the use of hemp extract in food is safe.
The FDA has evaluated Generally Recognized as Safe (GRAS) notices
for four hemp seed-derived food ingredients and determined that the
agency has no questions that those ingredients are GRAS under their
intended conditions of use. We currently produce Alkaline88® CBD
infused bottled water as a low-calorie hemp extract-infused water
in five flavors and 5 functional formulas (Resistance, Rest, Relax,
Refresh, and Reenergize). We may change the composition of our
planned hemp-extract-infused product as necessary to comply with
federal, state or local laws, regulations or guidance.
Corporate Information
The principal offices of our
company are located at 8541 E. Anderson Drive, Suite 100, Arizona
85255. Our telephone number is (480) 656-2423. Our corporate
website address is www.thealkalinewaterco.com.
The information contained on, or
that may be accessed through, our corporate website and our
ecommerce website is not part of, and is not incorporated into,
this reoffer prospectus.
The Offering
The selling stockholders identified
in this reoffer prospectus may offer and sell up to 7,925,000
shares of our common stock issued or to be issued pursuant our 2013
Equity Incentive Plan, our 2018 Stock Option Plan or our 2020
Equity Incentive Plan.
The selling stockholders may sell
all or a portion of the shares being offered pursuant to this
reoffer prospectus at fixed prices, at prevailing market prices at
the time of sale, at varying prices or at negotiated prices.
Number of Shares
Outstanding
As of December 28, 2022, there were
147,930,459 shares of our common stock issued and outstanding.
Use of Proceeds
We will not receive any proceeds
from the sale of any shares of our common stock by the selling
stockholders. We may, however, receive proceeds upon exercise of
the stock options by the selling stockholders. If we receive
proceeds upon exercise of these stock options, we intend to use
these proceeds for working capital and general corporate
purposes.
Risk Factors
An investment in our common stock
involves a high degree of risk. The risks described below include
material risks to our company or to investors purchasing shares of
our common stock that are known to our company. If any of the
following risks actually occur, our business, financial condition
and results of operations could be materially harmed. As a result,
the trading price of our common stock could decline and you might
lose all or part of your investment. When determining whether to
buy our common stock, you should also refer to the other
information contained in or incorporated by reference in this
reoffer prospectus.
Risks Related to Our
Business
We may have difficulty
realizing consistent and meaningful revenues and achieving
profitability.
Our ability to successfully develop
our products and to realize consistent and meaningful revenues and
to achieve profitability cannot be assured. For us to realize
consistent, meaningful revenues and to achieve profitability, our
products must receive broad market acceptance by consumers. Without
this market acceptance, we will not be able to generate sufficient
revenue to continue our business operation. If our products are not
widely accepted by the market, our business may fail.
Our ability to achieve and maintain
profitability and positive cash flow is dependent upon our ability
to generate revenues, manage development costs and expenses, and
compete successfully with our direct and indirect competitors. We
anticipate operating losses in upcoming future periods. This will
occur because there are expenses associated with the development,
production, marketing, and sales of our products.
Our continued operating losses express substantial doubt
about our ability to continue as a going concern.
Our
financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to
a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. We
have not yet established an ongoing source of revenues sufficient
to cover our operating costs and to allow us to continue as a going
concern. As of September 30, 2022, we had an accumulated deficit of
$125,406,196. Our ability to continue as a going concern is
dependent on our company obtaining adequate capital to fund
operating losses until we become profitable. If we are unable to
obtain adequate capital, we could be forced to significantly
curtail or cease operations. Our management has concluded that our
historical recurring losses from operations and negative cash flows
from operations as well as our dependence on private equity and
financings raise substantial doubt about our ability to continue as
a going concern and our auditor has included an explanatory
paragraph relating to our ability to continue as a going concern in
its audit report for the fiscal year ended March 31, 2022.
Our disclosure controls and
procedures and internal control over financial reporting are not
effective, which may cause our financial reporting to be unreliable
and lead to misinformation being disseminated to the
public.
Our management evaluated our
disclosure controls and procedures as of September 30, 2022 and
concluded that as of that date, our disclosure controls and
procedures were not effective. In addition, our management
evaluated our internal control over financial reporting as of March
31, 2022 and concluded that that there were material weaknesses in
our internal control over financial reporting as of that date and
that our internal control over financial reporting was not
effective as of that date. A material weakness is a control
deficiency, or combination of control deficiencies, such that there
is a reasonable possibility that a material misstatement of the
financial statements will not be prevented or detected on a timely
basis.
Our management identified the
following material weaknesses in our internal control over
financial reporting: (1) We had inadequate segregation of duties
over both financial reporting and closing activities; (2) we had
inadequate resources in the accounting department and (3) delays in
the implementation of a new ERP accounting system which caused the
system to not function as intended and as a result led to delays in
our financial closing activities.
To address these material
weaknesses, management performed additional analyses and other
procedures to ensure that its financial statements fairly present,
in all material respects, our financial position, results of
operations and cash flows for the periods presented. Accordingly,
we believe that our financial statements fairly present, in all
material respects, our financial condition, results of operations
and cash flows for the periods presented. In response to the
material weaknesses discussed above, we are working on implementing
a new integrated ERP system and have hired additional accounting
personnel. Once the ERP system in implemented in the second quarter
of fiscal year 2023, we plan to engage a third-party consultant to
develop a comprehensive control framework using the ERP and to
document our internal controls based on the implementation of the
ERP system.
We have not yet remediated these
material weaknesses and we believe that our disclosure controls and
procedures and internal control over financial reporting continue
to be ineffective. Until these issues are corrected, our ability to
report financial results or other information required to be
disclosed on a timely and accurate basis may be adversely affected
and our financial reporting may continue to be unreliable, which
could result in additional misinformation being disseminated to the
public. Investors relying upon this misinformation may make an
uninformed investment decision.
We will need additional funds
to continue producing, marketing, and distributing our
products.
We will have to spend additional
funds to continue producing, marketing and distributing our
products. If we cannot raise sufficient capital, we may have to
cease operations. We will need additional funds to continue to
produce our products for distribution to our target market.
We will have to continue to spend
substantial funds on distribution, marketing and sales efforts
before we will know if we have commercially viable and
marketable/sellable products.
There is no guarantee that
sufficient sale levels will be achieved.
There is no guarantee that the
expenditure of money on distribution and marketing efforts will
translate into sufficient sales to cover our expenses and result in
profits. Consequently, there is a risk that you may lose all of
your investment.
Our development, marketing,
and sales activities are limited by our size.
Because of our relative size, we must limit
our product development, marketing, and sales activities to the
amount of capital we raise. As such, we may not be able to complete
our production and business development program in a manner that is
as thorough as we would like. We may not ever generate sufficient
revenues to cover our operating and expansion costs.
Changes in the non-alcoholic
beverage business environment and retail landscape could adversely
impact our financial results.
The non-alcoholic beverage business
environment is rapidly evolving as a result of, among other things,
changes in consumer preferences, including changes based on health
and nutrition considerations and obesity concerns; shifting
consumer tastes and needs; changes in consumer lifestyles; and
competitive product and pricing pressures. In addition, the
non-alcoholic beverage retail landscape is very dynamic and
constantly evolving, not only in emerging and developing markets,
where modern trade is growing at a faster pace than traditional
trade outlets, but also in developed markets, where discounters and
value stores, as well as the volume of transactions through
e-commerce, are growing at a rapid pace. If we are unable to
successfully adapt to the rapidly changing environment and retail
landscape, our share of sales, volume growth and overall financial
results could be negatively affected.
Intense competition and
increasing competition in the commercial beverage market could hurt
our business.
The commercial retail beverage
industry, and in particular its non-alcoholic beverage segment, is
highly competitive. Market participants are of various sizes, with
various market shares and geographical reach, some of whom have
access to substantially more sources of capital.
We compete generally with all
liquid refreshments, including bottled water and numerous specialty
beverages, such as: CORE® Hydration, SOBE®, Snapple®, AriZona® Iced
Tea, Vitaminwater®, Gatorade Perform®, and POWERADE®.
We compete indirectly with major
international beverage companies including but not limited to: The
Coca-Cola Company®, PepsiCo, Inc., The Nestlé Group, Dr Pepper
Snapple Group, Inc, Danone S.A., The Kraft Heinz Company, and
Unilever PLC. These companies have established market presence in
the United States and globally, and offer a variety of beverages
that are competitors to our products. We face potential direct
competition from such companies, because they have the financial
resources, and access to manufacturing and distribution channels to
rapidly enter the alkaline water market. We compete directly with
other alkaline water producers and brands focused on the emerging
alkaline beverage market including: Eternal Naturally Alkaline®
Spring Water, Essentia®, CORE® Hydration, Icelandic Glacial™, Real
Water®, AQUAhydrate®, Mount Valley Spring Water™, QURE Water®,
Penta® Water, and Alka Power™. These companies could bolster their
position in the alkaline water market through additional
expenditure and promotion.
As a result of both direct and
indirect competition, our ability to successfully distribute,
market and sell our products, and to gain sufficient market share
in the United States and around the world to realize profits may be
limited, greatly diminished, or totally diminished, which may lead
to partial or total loss of your investments in our company.
Alternative non-commercial
beverages or processes could hurt our business.
The availability of non-commercial
beverages, such as tap water, and machines capable of producing
alkaline water at the consumer's home or at store-fronts could hurt
our business, market share, and profitability.
Expansion of the alkaline
beverage market or sufficiency of consumer demand in that market
for operations to be profitable are not guaranteed.
The alkaline water market is an
emerging market and there is no guarantee that this market will
expand or that consumer demand will be sufficiently high enough to
allow our company to successfully market, distribute and sell our
products, or to successfully compete with current or future
competition, all of which may result in total loss of your
investment.
A failure to introduce new
products or product extensions into new marketplaces successfully
could prevent us from achieving long-term
profitability.
We compete in an industry characterized
by rapid changes in consumer preferences, so our ability to
continue developing new products to satisfy our consumers' changing
preferences will determine our long-term success. A failure to
introduce new products or product extensions into new marketplaces
successfully could prevent us from achieving long-term
profitability. In addition, customer preferences are also affected
by factors other than taste, such as the publicity. If we do not
adjust to respond to these and other changes in customer
preferences, our sales may be adversely affected. In addition, a
failure to obtain any required regulatory approvals for our
proposed products could have a material adverse effect on our
business, operating results and financial condition.
Our growth and profitability
depends on the performance of third-party brokers and distributors
and on our ongoing relationships with them.
Our distribution network and its success
depend on the performance of third parties. Any non-performance or
deficient performance by such parties may undermine our operations,
profitability, and result in total loss of your investment. To
distribute our products, we use a broker-distributor-retailer
network whereby brokers represent our products to distributors and
retailers who will in turn sell our products to consumers. The
success of this network will depend on the performance of the
brokers, distributors and retailers within this network. There is a
risk that a broker, distributor, or retailer may refuse to or cease
to market or carry our products. There is a risk that the mentioned
entities may not adequately perform their functions within the
network by, without limitation, failing to distribute to sufficient
retailers or positioning our products in localities that may not be
receptive to our products. Furthermore, such third-parties'
financial position or market share may deteriorate, which could
adversely affect our distribution, marketing and sale activities.
We also need to maintain good commercial relationships with
third-party brokers, distributors and retailers so that they will
promote and carry our products. Any adverse consequences resulting
from the performance of third-parties or our relationship with them
could undermine our operations, profitability and may result in
total loss of your investment.
The loss of one or more of
our major customers or a decline in demand from one or more of
these customers could harm our business.
We had 2 major customers that together
account for 22% (12% and 10%, respectively) of accounts receivable
at September 30, 2022, and 3 customers that together account for
39% (17%, 12% and 10%, respectively) of the total revenues earned
for the three months ended September 30, 2022. There can be no
assurance that such customers will continue to order our products
at the same level or at all. A reduction or delay in orders from
such customers, including reductions or delays due to market,
economic or competitive conditions, could have a material adverse
effect on our business, operating results and financial
condition.
Our dependence on a limited
number of vendors leaves us vulnerable to having an inadequate
supply of required products, price increases, late deliveries, and
poor product quality.
We had 1 vendor that accounted for 31% of
purchases for the three months ended September 30, 2022. Like other
companies in our industry, we occasionally experience shortages and
are unable to purchase our desired volume of products.
Increasingly, our vendors are combining and merging together,
leaving us with fewer alternative sources. If we are unable to
maintain an adequate supply of products, our revenue and gross
profit could suffer considerably. Finally, we cannot provide any
assurance that our products will be available in quantities
sufficient to meet customer demand. Any limits to product access
could materially and adversely affect our business and results
of operations.
Our business is sensitive to
public perception. If any product proves to be harmful to consumers
or if scientific studies provide unfavorable findings regarding
their safety or effectiveness, then our image in the marketplace
would be negatively impacted.
Our results of operations may be
significantly affected by the public's perception of our company
and similar companies. Our business could be adversely affected if
any of our products or similar products distributed by other
companies proves to be harmful to consumers or if scientific
studies provide unfavorable findings regarding the safety or
effectiveness of our products or any similar products. If our
products suffer from negative consumer perception, it is likely to
adversely affect our business and results of operations.
Consumers may have
preconceptions about the health benefits of alkaline water; such
health benefits are not guaranteed or proven.
Health benefits of alkaline water are not
guaranteed and have not been proven. Although we do not market our
products as having any potential health benefits, there is a
consumer perception that drinking alkaline water has beneficial
health effects. Consequently, negative changes in consumers'
perception of the benefits of alkaline water or negative publicity
surrounding alkaline water may result in loss of market share or
potential market share and hence, loss of your investment. We are
also prohibited from touting unconfirmed health benefits in our
advertising and promotional activities for the products, both
directly and indirectly through claims made by third-party
endorsers when those endorsers have a material connection to
our company.
Water scarcity and poor
quality could negatively impact our production costs and
capacity.
Water is the main ingredient in our
products. It is also a limited resource, facing unprecedented
challenges from overexploitation, increasing pollution, poor
management, and climate change. As demand for water continues to
increase, as water becomes scarcer, and as the quality of available
water deteriorates, we may incur increasing production costs or
face capacity constraints that could adversely affect our
profitability or net operating revenues in the long run.
Increase in the cost,
disruption of supply or shortage of ingredients, other raw
materials or packaging materials could harm our
business.
We and our bottlers will use water,
84 trace minerals from Himalayan salts and packaging materials for
bottles such as plastic and paper products. The prices for these
ingredients, other raw materials and packaging materials fluctuate
depending on market conditions. Substantial increases in the prices
of our or our bottlers' ingredients, other raw materials and
packaging materials, to the extent they cannot be recouped through
increases in the prices of finished beverage products, could
increase our operating costs and could reduce our profitability.
Increases in the prices of our finished products resulting from a
higher cost of ingredients, other raw materials and packaging
materials could affect the affordability of our products and reduce
sales.
An increase in the cost, a
sustained interruption in the supply, or a shortage of some of
these ingredients, other raw materials, or packaging materials and
containers that may be caused by a deterioration of our or our
bottlers' relationships with suppliers; by supplier quality and
reliability issues; or by events such as natural disasters, power
outages, labor strikes, political uncertainties or governmental
instability, or the like, could negatively impact our net revenues
and profits.
Unfavorable general economic
conditions in the United States could negatively impact our
financial performance.
Unfavorable general economic conditions, such as a
recession or economic slowdown, in the United States could
negatively affect the affordability of, and consumer demand for,
our products in the United States. Under difficult economic
conditions, consumers may seek to reduce discretionary spending by
forgoing purchases of our products or by shifting away from our
beverages to lower-priced products offered by other companies,
including non-alkaline water. Consumers may also cease purchasing
bottled water and consume tap water. Lower consumer demand for our
products in the United States could reduce our
profitability.
Adverse weather conditions
could reduce the demand for our products.
The sales of our products are influenced
to some extent by weather conditions in the markets in which we
operate. Unusually cold or rainy weather during the summer months
may have a temporary effect on the demand for our products and
contribute to lower sales, which could have an adverse effect on
our results of operations for such periods.
Our business could be
adversely affected by the effects of health epidemics, including
the global COVID-19 pandemic.
Our business could be materially
and adversely affected by the risks, or the public perception of
the risks, related to the outbreak of COVID-19. Although retailers
which carry our products may be considered essential businesses and
therefore be allowed to remain operational, they may experience
significantly reduced demand. The risk of a pandemic, or public
perception of the risk, could cause customers to avoid public
places, including retail properties, and could cause temporary or
long-term disruptions in our supply chains and/or delays in the
delivery of our inventory to our customers. Further, such risks
could also adversely affect retail customers' financial condition,
resulting in reduced spending on our products, which are marketed
as premium products. "Shelter-in-place" or other such orders by
governmental entities could also disrupt our operations, if our
employees or the employees of our sourcing partners who cannot
perform their responsibilities from home, are not able to report to
work. Risks related to an epidemic, pandemic or other health
crisis, such as COVID-19, could also lead to the complete or
partial closure of one or more of our co-packing facilities or
operations of our sourcing partners.
The spread of COVID-19, which has
caused a broad impact globally, may materially affect us
economically. While the potential economic impact brought by, and
the duration of, COVID-19 may be difficult to assess or predict, a
widespread pandemic could result in significant disruption of
global financial markets, reducing our ability to access capital,
which could in the future negatively affect our liquidity. In
addition, a recession or market correction resulting from the
spread of COVID-19 could materially affect our business and the
value of our common stock.
The global outbreak of COVID-19
continues to rapidly evolve. The extent to which COVID-19 may
impact our business, operations and financial performance will
depend on future developments, including the duration of the
outbreak, travel restrictions and social distancing in the United
States and other countries, changes to the regulatory regimes under
which we operate, the effectiveness of actions taken in United
States and other countries to contain and treat the disease and
whether the United States and additional countries are required to
move to complete lock-down status. The ultimate long-term impact of
COVID-19 is highly uncertain and cannot be predicted with
confidence.
We rely on third parties to
produce and bottle our products, which creates additional
risk.
We do not own or operate bottling or
co-packing facilities used for the production of the various water
products in our portfolio. We rely on those third parties to ensure
the quality, safety and integrity of our products. If the third
parties that we engage to produce and bottle our products fail to
meet our demands or are found by government agencies to be out of
compliance with applicable regulatory requirements, our supplies of
those products and our future profit margins could be
adversely affected.
Product contamination or
tampering or issues or concerns with respect to product quality,
safety and integrity could adversely affect our business,
reputation, financial condition or results of
operations.
Product contamination or tampering, the
failure to maintain high standards for product quality, safety and
integrity, including with respect to raw materials and ingredients
obtained from suppliers, or allegations (whether or not valid) of
product quality issues, mislabeling, misbranding, spoilage,
allergens, adulteration or contamination with respect to products
in our portfolio may reduce demand for such products, and cause
production and delivery disruptions or increase costs, each of
which could adversely affect our business, reputation, financial
condition or results of operations. If any of the products in our
portfolio are mislabeled or become unfit for consumption or cause
injury, illness or death, or if appropriate resources are not
devoted to product quality and safety (particularly as we expand
our portfolio into new categories) or to comply with changing food
safety requirements, we could decide to, or be required to, recall
products or withdraw from the marketplace and/or we may be subject
to liability or government action, which could result in payment of
damages or fines, cause certain products in our portfolio to be
unavailable for a period of time, result in destruction of product
inventory, or result in adverse publicity (whether or not valid),
which could reduce consumer demand and brand equity. Moreover, even
if allegations of product contamination or tampering or suggestions
that our products were not fit for consumption are meritless, the
negative publicity surrounding assertions against us or products in
our portfolio or processes could adversely affect our reputation or
brands. Our business could also be adversely affected if consumers
lose confidence in product quality, safety and integrity generally,
even if such loss of confidence is unrelated to products in our
portfolio. Any of the foregoing could adversely affect our
business, reputation, financial condition or results of operations.
In addition, if we do not have adequate insurance, if we do not
have enforceable indemnification from suppliers, bottlers,
distributors or other third parties or if indemnification is not
available, the liability relating to such product claims or
disruption as a result of recall efforts could materially adversely
affect our business, financial condition or results of
operations.
Our products are considered
premium beverages; we cannot provide any assurances as to
consumers' continued market acceptance of our current and future
products.
We will compete directly with other alkaline
water producers and brands focused on the emerging alkaline
beverage market including Eternal, Essentia, Core, Icelandic, Real
Water, AQUAHydrate, Mountain Valley, Qure, Penta, and Alka Power.
Products offered by our direct competitors are sold in various
volumes and prices with prices ranging from approximately $0.99 for
a half-liter bottle to $4.99 for a one-gallon bottle, and volumes
ranging from half-liter bottles to one-gallon bottles. We currently
offer our product in a one-gallon bottle for a suggested resale
price or an SRP of a $4.99, three-liter bottle for an SRP of $3.99,
2-liter at an SRP of $2.99, 1.5 liter at an SRP of $2.49, 1 liter
at an SRP of $1.99, 700 milliliter single serving at an SRP of
$1.19, and a 500 milliliter at an SRP of $0.99. Our competitors may
introduce larger sizes and offer them at an SRP that is lower than
our products. We can provide no assurances that consumers will
continue to purchase our products or that they will not prefer to
purchase a competitive product.
We are subject to periodic
claims and litigation that could result in unexpected expenses and
could ultimately be resolved against us.
From time to time, we are involved
in litigation and other proceedings, including matters related to
product liability claims, stockholder class action and derivative
claims, commercial disputes and intellectual property, as well as
trade, regulatory, employment, and other claims related to our
business. Any of these proceedings could result in significant
settlement amounts, damages, fines or other penalties, divert
financial and management resources, and result in significant legal
fees.
An unfavorable outcome of any
particular proceeding could exceed the limits of our insurance
policies or the carriers may decline to fund such final settlements
and/or judgments and could have an adverse impact on our business,
financial condition, and results of operations. In addition, any
proceeding could negatively impact our reputation among our guests
and our brand/image.
We regularly evaluate
potential expansion into international markets, and any expansion
into such international operations could subject us to risks and
expenses that could adversely impact our business, financial
condition and results of operations.
We have recently expanded into the
Caribbean, Canada and Mexico. We have also evaluated, and continue
to evaluate, potential expansion into certain other international
markets. Our international sales and operations would be subject to
a variety of risks, including fluctuations in currency exchange
rates, tariffs, import restrictions and other trade barriers,
unexpected changes in legal and regulatory requirements, longer
accounts receivable payment cycles, potentially adverse tax
consequences, and difficulty in complying with foreign laws and
regulations, as well as U.S. laws and regulations that govern
foreign activities. Economic uncertainty in some of the geographic
regions in which we might operate could result in the disruption of
commerce and negatively impact our operations in those areas. Also,
if we choose to pursue international expansion efforts, it may be
necessary or desirable to contract with third parties, and we may
not be able to enter into such agreements on commercially
acceptable terms or at all. Further, such arrangements may not
perform to our expectations, and we may be exposed to various risks
as a result of the activities of our partners.
We rely on key executive
officers who have extensive knowledge of our business and the
industry in which we operate; the loss of any of these key
executive officers would be difficult to replace and may adversely
affect our business.
We are highly dependent on two executive
officers, Frank Lazaran and David A. Guarino, who have extensive
knowledge of our business and the industry in which we operate. We
do not have "key person" life insurance policies for either of
these officers. The loss of Frank Lazaran and/or David A. Guarino
could result in delays in product development, loss of any future
customers and sales and diversion of management resources, which
could adversely affect our operating results.
If we are unable to protect
our information systems against service interruption,
misappropriation of data or breaches of security, our operations
could be disrupted, we may suffer financial losses and our
reputation may be damaged.
We rely on networks and information
systems and other technology ("information systems"), including the
Internet and third-party hosted services, to support a variety of
business processes and activities, including procurement and supply
chain, manufacturing, distribution, invoicing and collection of
payments, employee processes and consumer marketing. We use
information systems to process financial information and results of
operations for internal reporting purposes and to comply with
regulatory financial reporting and legal and tax requirements. In
addition, we depend on information systems for digital marketing
activities and electronic communications between our company and
our bottlers and other customers, suppliers and consumers. Because
information systems are critical to many of our operating
activities, our business may be impacted by system shutdowns,
service disruptions or security breaches. These incidents may be
caused by failures during routine operations such as system
upgrades or by user errors, as well as network or hardware
failures, malicious or disruptive software, unintentional or
malicious actions of employees or contractors, cyberattacks by
common hackers, criminal groups or nation-state organizations or
social-activist (hacktivist) organizations, geopolitical events,
natural disasters, failures or impairments of telecommunications
networks, or other catastrophic events. In addition, such incidents
could result in unauthorized or accidental disclosure of material
confidential information or regulated individual personal data. If
our information systems suffer severe damage, disruption or
shutdown and our business continuity plans do not effectively
resolve the issues in a timely manner, we could experience delays
in reporting our financial results, and we may lose revenue and
profits as a result of our inability to timely manufacture,
distribute, invoice and collect payments for concentrate or
finished products. Unauthorized or accidental access to, or
destruction, loss, alteration, disclosure, falsification or
unavailability of, information could result in violations of data
privacy laws and regulations, damage to the reputation and
credibility of our company and, therefore, could have a negative
impact on net operating revenues. In addition, we may suffer
financial and reputational damage because of lost or
misappropriated confidential information belonging to us, our
current or former employees, our bottling partners, other customers
or suppliers, or consumers or other data subjects, and may become
exposed to legal action and increased regulatory oversight. We
could also be required to spend significant financial and other
resources to remedy the damage caused by a security breach or to
repair or replace networks and information systems.
In addition, third-party providers
of data hosting or cloud services, as well as our bottling
partners, distributors, retailers or suppliers, may experience
cybersecurity incidents that may involve data we share with them.
Although we have taken steps to prevent cybersecurity incidents,
there can be no assurance that such steps will be adequate. In
order to address risks to our information systems, we continue to
make investments in personnel, technologies and training of our
personnel.
Risks Related to Regulations
Applicable to Our Industry
Changes in laws and
regulations relating to beverage containers and packaging could
increase our costs and reduce our net operating revenues or
profitability.
We and our bottlers offer our products in
non-refillable, recyclable containers in the United States.
Regulations have been enacted in various jurisdictions in the
United States requiring that deposits or certain eco-taxes or fees
be charged for the sale, marketing and use of certain
non-refillable beverage containers. Other proposals relating to
beverage container deposits, recycling, eco-tax and/or product
stewardship have been introduced in various jurisdictions in the
United States and overseas, and we anticipate that similar
legislation or regulations may be proposed in the future at local,
state and federal levels in the United States. Consumers' increased
concerns and changing attitudes about solid waste streams and
environmental responsibility and the related publicity could result
in the adoption of such legislation or regulations. Current
regulations or the adoption of future regulations in the
geographical regions in which we currently operate or intend to
operate could adversely affect our costs or require changes in our
distribution model, which could reduce our net operating revenues
or profitability.
Significant additional
labeling or warning requirements or limitations on the availability
of our products may inhibit sales of affected products.
Various jurisdictions may seek to adopt
significant additional product labeling or warning requirements or
limitations on the availability of our products relating to the
content or perceived adverse health consequences of our products.
Federal laws may pre-empt some or all of these attempts by state or
localities to impose additional labeling or warning requirements.
If these types of requirements become applicable to our products
under current or future environmental or health laws or
regulations, they may inhibit sales of our products. Moreover, if
we fail to meet compliance deadlines for any such new requirements,
our products may be deemed misbranded or mislabeled and could be
subject to enforcement action, or we could be exposed to private
lawsuits alleging misleading labels or product
promotion.
Changes in, or failure to
comply with, the laws and regulations applicable to our products or
our business operations could increase our costs or reduce our net
operating revenues.
The advertising, distribution,
labeling, production, safety, sale, and transportation in the
United States of our currently marketed products are subject to:
the Federal Food, Drug, and Cosmetic Act; the Federal Trade
Commission Act; the Lanham Act; state food and drug laws; state
consumer protection laws; competition laws; federal, state, and
local workplace health and safety laws, such as the Occupational
Safety and Health Act; various federal, state and local
environmental protection laws; and various other federal, state,
and local statutes and regulations. Changes to such laws and
regulations could increase our costs or reduce our net operating
revenues.
In addition, failure to comply with
environmental, health or safety requirements and other applicable
laws or regulations could result in the assessment of damages, the
imposition of penalties, suspension of production, changes to
equipment or processes, or a cessation of operations at our or our
bottlers' facilities, as well as damage to our image and
reputation, all of which could harm our profitability.
If we fail to comply with
personal data protection laws, we could be subject to adverse
publicity, government enforcement actions and/or private
litigation, which could negatively affect our business and
operating results.
In the ordinary course of our business,
we receive, process, transmit and store information relating to
identifiable individuals ("personal data"), primarily
employees and former employees. As a result, we are subject to
various U.S. federal and state and foreign laws and regulations
relating to personal data. These laws have been subject to frequent
changes, and new legislation in this area may be enacted in other
jurisdictions at any time. There is no assurance that our security
controls over personal data, the training of employees and vendors
on data privacy and data security, and the policies, procedures and
practices we implemented or may implement in the future will
prevent the improper disclosure of personal data. Improper
disclosure of personal data in violation of applicable personal
data protection laws could harm our reputation, cause loss of
consumer confidence, subject us to government enforcement actions
(including fines), or result in private litigation against us,
which could result in loss of revenue, increased costs, liability
for monetary damages, fines and/or criminal prosecution, all of
which could negatively affect our business and operating
results.
Because we produce, market and/or sell
beverages infused with hemp, as defined under the Agriculture
Improvement Act of 2018, we are subject to a myriad of different
laws and regulations governing the use of hemp in food and
beverages and if we are unable to comply with such laws in a
cost-effective manner, our business could be adversely
affected.
The production of a beverage
infused with hemp, as "hemp" is defined in the Agriculture
Improvement Act of 2018 (also known as the 2018 Farm Bill, Public
Law 115-334), is contingent on U.S. Food and Drug Administration,
or the FDA, and state laws, regulations, and guidance. While the
Agriculture Improvement Act of 2018 removed hemp from Schedule I of
the Controlled Substances Act, the law did not change the FDA's
authorities with respect to food or drugs. As of the date of this
reoffer prospectus, the FDA has not made a determination that the
use of hemp in food is safe. The FDA has evaluated Generally
Recognized as Safe or GRAS notices for three hemp seed-derived food
ingredients and determined that the agency has no questions that
those ingredients are GRAS under their intended conditions of
use.
Laws and regulations governing the
use of hemp in food and beverages in the United States are broad in
scope; subject to evolving interpretations; and subject to
enforcement by a myriad of regulatory agencies and law enforcement
entities. Under the Agriculture Improvement Act of 2018, a state or
Indian tribe that desires to have primary regulatory authority over
the production of hemp in the state or territory of the Indian
tribe must submit a plan to monitor and regulate hemp production to
the Secretary of the United States Department of Agriculture or
USDA. The Secretary must then approve the state or tribal plan
after determining if the plan complies with the requirements set
forth in the Agriculture Improvement Act of 2018. The Secretary may
also audit the state or Indian tribe's compliance with the
federally-approved plan. If the Secretary does not approve the
state or Indian tribe's plan, then the production of hemp in that
state or territory of that Indian tribe will be subject to a plan
established by USDA. USDA has not yet established such a plan. We
anticipate that many states will seek to have primary regulatory
authority over the production of hemp. States that seek such
authority may create new laws and regulations that permit the use
of hemp in food and beverages.
Federal and state laws and
regulations on hemp may address production, monitoring,
manufacturing, distribution, and laboratory testing to ensure that
that the hemp has a delta-9 tetrahydrocannabinol concentration of
not more than 0.3 percent on a dry weight basis. Federal laws and
regulations may also address the transportation or shipment of hemp
or hemp products, as the Agriculture Improvement Act of 2018
prohibits states and Indian tribes from prohibiting the
transportation or shipment of hemp or hemp products produced in
accordance with that law through the state or territory of the
Indian tribe, as applicable. Because we rely on a nationwide
broker-distributor-retailer network whereby brokers represent our
products to distributors and retailers in turn sell our product to
consumers in the fifty states and the District of Columbia, we may
be subject to many different state-based regulatory regimens for
hemp, all of which could require us to incur substantial costs
associated with compliance requirements. In addition, violations of
these laws, or allegations of such violations, could disrupt our
business and result in a material adverse effect on our operations,
as well as adverse publicity and potential harm to our reputation.
We and our suppliers and vendors must take significant enterprise
risk management steps to ensure that there is no commingling of
hemp and marihuana, as "marihuana" is defined in the federal
Controlled Substances Act. Marihuana remains subject to the
Controlled Substances Act and related regulations.
Furthermore, if we decide to
produce, market and sell beverages infused with hemp outside of the
United States, we will be subject to applicable laws and
regulations in those non-U.S. jurisdictions, which would require us
to expend significant costs associated with compliance.
In addition, it is possible that
additional regulations may be enacted in the future in the United
States and globally that will be directly applicable to our current
and proposed product offerings infused with hemp. We cannot predict
the nature of any future laws, regulations, interpretations, or
applications, nor can we determine what effect additional
governmental regulations or administrative policies and procedures,
when and if promulgated, could have on our business.
FDA's current position is
that the sale of food and beverages that contain hemp-derived
cannabidiol or CBD is prohibited under the Federal Food, Drug, and
Cosmetic Act; therefore, we may be subject to federal enforcement
actions which could adversely affect our business and harm our
reputation and brand.
The FDA has jurisdiction over drugs
and foods that contain CBD, including CBD derived from hemp. Under
the Federal Food, Drug and Cosmetic Act or the FDCA, it is a
prohibited act to introduce or deliver for introduction into
interstate commerce any food (which the FDCA defines to include
beverages) that is adulterated. The FDCA therefore prohibits the
introduction or delivery for introduction of a food that contains
CBD, because the FDCA deems a food to be adulterated if it bears or
contains any food additive that is unsafe and CBD is presently an
unsafe food additive under the FDCA and FDA regulations. The FDCA
also states that it is a prohibited act to introduce or deliver for
introduction into interstate commerce any food to which an
FDA-approved drug has been added, unless certain exceptions are
met. The FDA has approved a drug in which CBD is an active
ingredient, and the agency has stated that based on available
evidence, none of the exceptions apply to CBD. One of the
exceptions addresses whether the drug was marketed in food before
the FDA approved the drug and before the institution of any
substantial clinical investigations involving the drug. The FDA has
stated that interested parties may present the agency with evidence
that has bearing on the issue of whether CBD was marketed in food
before the FDA approved the CBD drug in 2018 or before the
institution of substantial clinical investigations involving the
CBD drug. FDA's current position is that this provision of the FDCA
also prohibits the introduction or delivery for introduction into
interstate commerce of a food to which CBD has been added.
Congress may decide to amend the
FDCA to permit the use of hemp-derived CBD in food. The FDA may
also decide to issue regulations or guidance that address the use
of hemp-derived CBD in food or use its enforcement discretion with
respect to hemp-derived CBD products. On May 31, 2019, the FDA held
a public hearing, as well as providing a broader opportunity for
written public comment, for stakeholders to share their experiences
and challenges with CBD products, including information and views
related to product safety. Based on this hearing, any legislative
or regulatory action could take years to implement or finalize and
may not include provisions that would enable our company to
produce, market and/or sell hemp beverages that contain
hemp-derived CBD. We risk becoming subject to adverse publicity and
costly federal enforcement actions should we decide to produce,
market and/or sell beverages infused with hemp-derived CBD in the
United States. We may be required to expend significant resources
in defending our company from such actions which could adversely
affect our business and results of operations and divert the
attention of management. We may also incur the risk of sustaining
considerable damage to our reputation and brand should we become
party to federal enforcement actions resulting from the production,
marketing or sale of hemp-derived CBD infused beverages.
Accordingly, if Congress amended
federal laws or FDA issued regulations or guidance permitting the
use of hemp-derived CBD in food or announcing the agency's decision
to use its enforcement discretion with respect to hemp-derived CBD
products, we and our suppliers and vendors would be required to
implement significant enterprise risk management measures to ensure
that there is no commingling of CBD derived from marihuana, as
"marihuana" is defined in the federal Controlled Substances Act,
with any future commercial supply of hemp-derived CBD that is used
to produce our products.
The FDA could force the
removal of our products from the U.S. market.
The FDA has broad authority over the
regulation of our products. The FDA could, among other things,
force us to remove our products from the U.S. market, levy fines or
change their regulations on advertising. Any adverse action by the
FDA could have a material adverse impact on our
business.
Government reviews,
inquiries, investigations, and actions could harm our business or
reputation.
As our product portfolio evolves,
the regulatory environment with regard to our business is also
evolving. Government officials often exercise broad discretion in
deciding how to interpret and apply applicable laws or regulations.
We may in the future receive formal and informal inquiries from
various governmental regulatory authorities, as well as
self-regulatory organizations or consumer protection watchdog
groups, about our business and compliance with local laws,
regulations, or standards. Any determination that our products,
operations or activities, or the activities of our employees,
contractors or agents, are not in compliance with existing laws,
regulations or standards, could adversely affect our business in a
number of ways. Even if such an inquiry does not result in the
imposition of fines, interruptions to our business, loss of
suppliers or other third-party relationships, terminations of
necessary licenses and permits, or similar direct results, the
existence of the inquiry alone could potentially create negative
publicity that could harm our business and/or reputation.
Risks Related to Our
Intellectual Property
It is difficult and costly to
protect our intellectual property.
Our commercial success will depend in part
on obtaining and maintaining trademark protection and trade
secret/know-how protection of our products and brands, as well as
successfully defending that intellectual property against
third-party challenges. We will only be able to protect our
intellectual property related to our trademarks and brands to the
extent that we have rights under valid and enforceable trademarks,
know-how or trade secrets that cover our products and brands.
Changes in either the trademark laws or in interpretations of
trademark and laws in the U.S. and other countries may diminish the
value of our intellectual property. Accordingly, we cannot predict
the breadth of claims that may be allowed or enforced in our issued
trademarks. The degree of future protection for our proprietary
rights is uncertain because legal means afford only limited
protection and may not adequately protect our rights or permit us
to gain or keep our competitive advantage.
We may face intellectual
property infringement claims that could be time-consuming and
costly to defend, and could result in our loss of significant
rights and the assessment of treble damages.
From time to time we may face
intellectual property claims from third parties. Some of these
claims may lead to litigation. The outcome of any such litigation
can never be guaranteed, and an adverse outcome could affect us
negatively. For example, were a third party to succeed on an
infringement claim against us, we may be required to pay
substantial damages (including up to treble damages if such
infringement were found to be willful). In addition, we could face
an injunction, barring us from conducting the allegedly infringing
activity. The outcome of the litigation could require us to enter
into a license agreement which may not be under acceptable,
commercially reasonable, or practical terms or we may be precluded
from obtaining a license at all. It is also possible that an
adverse finding of infringement against us may require us to
dedicate substantial resources and time in developing
non-infringing alternatives, which may or may not be possible.
Finally, we may initiate claims to
assert or defend our own intellectual property against third
parties. Any intellectual property litigation, irrespective of
whether we are the plaintiff or the defendant, and regardless of
the outcome, is expensive and time-consuming, and could divert our
management's attention from our business and negatively affect our
operating results or financial condition.
We may be subject to claims
by third parties asserting that our employees or our company has
misappropriated their intellectual property, or claiming ownership
of what we regard as our own intellectual property.
Although we try to ensure that our
company, our employees, and independent contractors
(suppliers/vendors/distributors) do not use the proprietary
information or know-how of others in their work for us, we may be
subject to claims that our company, our employees, or independent
contractors (suppliers/vendors/distributors) have used or disclosed
intellectual property in violation of others' rights. These claims
may cover a range of matters, such as challenges to our trademarks,
as well as claims that our employees or independent contractors are
using trade secrets or other proprietary information of any such
employee's former employer or independent contractors. As a result,
we may be forced to bring claims against third parties, or defend
claims they may bring against us, to determine the ownership of
what we regard as our intellectual property. If we fail in
prosecuting or defending any such claims, in addition to paying
monetary damages, we may lose valuable intellectual property rights
or personnel. Even if we are successful in prosecuting or defending
against such claims, litigation could result in substantial costs
and be a distraction to management.
Risks Related to Our
Stock
Because we can issue
additional shares of common stock, our stockholders may experience
dilution in the future.
We are authorized to issue up to 200,000,000
shares of our common stock and 100,000,000 shares of our preferred
stock, of which 147,930,459 shares of our common stock are issued
and outstanding as of December 28, 2022. Our board of directors has
the authority to cause us to issue additional shares of our common
stock and preferred stock, and to determine the rights, preferences
and privileges of shares of our preferred stock, without consent of
our stockholders. Consequently, the stockholders may experience
more dilution in their ownership of our stock in the
future.
Trading on the Nasdaq Capital
Market or Canadian Securities Exchange may be volatile, which could
depress the market price of our common stock and make it difficult
for our stockholders to resell their shares.
Our common stock is listed on the
Nasdaq Capital Market and the Canadian Securities Exchange. Trading
of our common stock may experience wide fluctuations in trading
prices, due to many factors that may have little to do with our
operations or business prospects. This volatility could depress the
market price of our common stock for reasons unrelated to operating
performance.
A prolonged and substantial
decline in the price of our common stock could affect our ability
to raise further working capital, thereby adversely impacting our
ability to continue operations.
A prolonged and substantial decline
in the price of the shares of our common stock could result in a
reduction in the liquidity of the shares of our common stock and a
reduction in our ability to raise capital, or a delisting from a
stock exchange on which our common stock trades. Because we plan to
acquire a significant portion of the funds we need in order to
conduct our planned operations through the sale of equity
securities, a decline in the price of the shares of our common
stock could be detrimental to our liquidity and our operations
because the decline may cause investors not to choose to invest in
shares of our common stock. If we are unable to raise the funds we
require for all our planned operations and to meet our existing and
future financial obligations, we may be forced to reallocate funds
from other planned uses and may suffer a significant negative
effect on our business plan and operations, including our ability
to develop new products and continue our current operations. As a
result, our business may suffer, and we may go out of business.
On May 10, 2022, we received a
deficiency letter from the Listing Qualifications Department of the
Nasdaq Stock Market (the "Staff"), notifying us that, for
the last 30 consecutive business days, the closing bid price of our
common stock had not been maintained at the minimum required
closing bid price of at least $1.00 per share as required for
continued listing on the Nasdaq Capital Market pursuant to Listing
Rule 5550(a)(2) ("Minimum Bid Price Rule"). In accordance
with Nasdaq Listing Rules, we were given 180 calendar days, or
until November 7, 2022, to regain compliance with the Minimum Bid
Price Rule.
On November 8, 2022, we received a
determination letter (the "Letter") from the Staff stating
that we have not regained compliance with the Minimum Bid Price
Rule and we were not eligible for a second 180 day period as we did
not comply with the $5,000,000 minimum stockholders' equity initial
listing requirement for the Nasdaq Capital Market. The Letter
stated that, unless we request an appeal of this determination no
later than 4:00 p.m. (Eastern time) on November 15, 2022, the Staff
determined that our common stock will be scheduled for delisting
from the Nasdaq Capital Market and will be suspended at the opening
of business on November 17, 2022, and a Form 25-NSE will be filed
with the Securities and Exchange Commission which will remove our
common stock from listing and registration on the Nasdaq Stock
Market.
On November 10, 2022, we requested
a hearing before the Nasdaq Hearings Panel (the "Panel") to
appeal the Letter. The Letter stated that we will be asked to
provide the Panel with a plan to regain compliance and,
accordingly, we may wish to consider presenting a plan that
includes a discussion of the events that we believe will enable our
company to regain compliance in the required time frame and
commitment to effect a reverse stock split, if necessary.
On December 20, 2022, we received a
decision from the Panel granting our request to continue our
listing on the Nasdaq Capital Market. Our continued listing on the
Nasdaq Capital Market is subject to our evidencing compliance with
the Minimum Bid Price Rule by May 8, 2023 by evidencing a closing
bid price of $1 or more per share for a minimum of ten consecutive
trading sessions and adhering to certain other conditions and
requirements.
We are working to satisfy the
requirements of the Nasdaq Capital Market in a timely manner.
However, there can be no assurance that we will regain compliance
with the Minimum Bid Price Rule or maintain the listing of our
common stock on the Nasdaq Capital Market.
Because we do not intend to
pay any cash dividends on our common stock in the near future, our
stockholders will not be able to receive a return on their shares
unless they sell them.
We intend to retain any future
earnings to finance the development and expansion of our business.
We do not anticipate paying any cash dividends on our common stock
in the near future. The declaration, payment and amount of any
future dividends will be made at the discretion of our board of
directors, and will depend upon, among other things, the results of
operations, cash flows and financial condition, operating and
capital requirements, and other factors as the board of directors
considers relevant. There is no assurance that future dividends
will be paid, and if dividends are paid, there is no assurance with
respect to the amount of any such dividend. Unless we pay
dividends, our stockholders will not be able to receive a return on
their shares unless they sell them.
Forward-Looking
Statements
This reoffer prospectus contains
forward-looking statements. Forward-looking statements are
projections in respect of future events or our future financial
performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "intend",
"expect", "plan", "anticipate", "believe", "estimate", "predict",
"potential", or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and
involve known and unknown risks, including the risks in the section
entitled "Risk Factors", uncertainties and other factors, which may
cause our company's or our industry's actual results, levels of
activity or performance to be materially different from any future
results, levels of activity or performance expressed or implied by
these forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity
or performance. Except as required by applicable law, including the
securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements
to actual results.
The Offering
The selling stockholders identified
in this reoffer prospectus may offer and sell up to 7,925,000
shares of our common stock issued or to be issued pursuant our 2013
Equity Incentive Plan, our 2018 Stock Option Plan or our 2020
Equity Incentive Plan.
Use of Proceeds
We will not receive any proceeds
from the sale of the shares of our common stock by the selling
stockholders. We may, however, receive proceeds upon exercise of
the stock options granted to the selling stockholders. If we
receive proceeds upon exercise of stock options, we intend to use
these proceeds for working capital and general corporate
purposes.
Determination of Offering
Price
The selling stockholders may sell
all or a portion of the shares being offered pursuant to this
reoffer prospectus at fixed prices, at prevailing market prices at
the time of sale, at varying prices or at negotiated prices.
Selling Stockholders
The selling stockholders may offer
and sell, from time to time, any or all of shares of our common
stock issued or to be issued pursuant to our 2013 Equity Incentive
Plan, our 2018 Stock Option Plan or our 2020 Equity Incentive
Plan.
The following table identifies the
selling stockholders and indicates (i) the nature of any material
relationship that such selling stockholder has had with us for the
past three years, (ii) the number of shares of our common stock
held by the selling stockholders, (iii) the amount to be offered
for each of the selling stockholder's account, and (iv) the number
of shares of our common stock and percentage of outstanding shares
of our common stock to be owned by each selling stockholder after
the sale of the shares of our common stock offered by them pursuant
to this offering. The selling stockholders are not obligated to
sell the shares offered in this reoffer prospectus and may choose
not to sell any of the shares or only a part of the shares that
they receive.
The information provided in the
following table with respect to the selling stockholders has been
obtained from each of the selling stockholders. Because the selling
stockholders may offer and sell all or only some portion of the
shares of our common stock being offered pursuant to this reoffer
prospectus, the numbers in the table below representing the amount
and percentage of these shares of our common stock that will be
held by the selling stockholders upon termination of the offering
are only estimates based on the assumption that each selling
stockholder will sell all of his or her shares of our common stock
being offered in the offering. In addition, the selling
stockholders may have sold, transferred or otherwise disposed of,
or may sell, transfer or otherwise dispose of, at any time or from
time to time since the date on which he or she provided the
information regarding the shares of common stock beneficially owned
by them, all or some portion of the shares of common stock
beneficially owned by them in transactions exempt from the
registration requirements of the Securities Act of 1933.
None of the selling stockholders is
a broker-dealer or an affiliate of a broker-dealer. We may require
the selling stockholders to suspend the sales of the shares of our
common stock being offered pursuant to this reoffer prospectus upon
the occurrence of any event that makes any statement in this
reoffer prospectus or the related registration statement untrue in
any material respect or that requires the changing of statements in
those documents in order to make statements in those documents not
misleading.
|
Name of
Selling Stockholder
|
Shares Owned
by the
Selling
Stockholder
before the
Offering(1)
|
Total
Shares
Offered
in the Offering
|
Number of Shares to Be Owned
by Selling Stockholder and Percent
of Total Issued and Outstanding
Shares After the Offering (1)
|
|
#
of
Shares(2)
|
%
of
Class(2),(3)
|
|
Frank Lazaran(4)
|
1,078,332(5)
|
2,440,000(6)
|
130,000
|
*
|
|
David A. Guarino(7)
|
2,884,300(8)
|
2,060,000(9)
|
1,299,300
|
*
|
|
Aaron Keay(10)
|
3,975,000(11)
|
2,350,000(12)
|
2,000,000
|
1.34%
|
|
Brian Sudano(13)
|
275,000(14)
|
450,000(15)
|
nil
|
nil
|
|
David Rauch(16)
|
680,000(17)
|
200,000(18)
|
680,000
|
*
|
|
Frank Chessman(19)
|
1,296,000(20)
|
250,000(21)
|
1,046,000
|
*
|
|
Rick Chessman(22)
|
92,500(23)
|
12,500(24)
|
80,000
|
*
|
|
Ryan Chessman(25)
|
39,166(26)
|
12,500(27)
|
26,666
|
*
|
|
Brandon Yates(28)
|
65,000(29)
|
25,000(30)
|
40,000
|
*
|
|
Jeff Wright(31)
|
42,500(32)
|
12,500(33)
|
30,000
|
*
|
|
Michael Reagan(34)
|
3,530,000(35)
|
75,000(36)
|
3,455,000
|
2.29%
|
|
Greg Ritter(37)
|
143,400(38)
|
12,500(39)
|
130,900
|
*
|
|
Jason Schrier(40)
|
147,500(41)
|
12,500(42)
|
135,000
|
*
|
|
James Venia(43)
|
87,500(44)
|
12,500(45)
|
75,000
|
*
|
|
Total
|
|
7,925,000
|
|
|
Notes
|
(1)
|
Beneficial ownership is determined in accordance with Securities
and Exchange Commission rules and generally includes voting or
investment power with respect to shares of common stock. Shares of
common stock subject to options, warrants and convertible preferred
stock currently exercisable or convertible, or exercisable or
convertible within 60 days, are counted as outstanding for
computing the percentage of the person holding such options,
warrants or convertible preferred stock but are not counted as
outstanding for computing the percentage of any other person. We
believe that the selling stockholders have sole voting and
investment powers over their shares.
|
|
|
|
|
(2)
|
We have assumed that the selling stockholders will sell all of
the shares being offered in this offering.
|
|
|
|
|
(3)
|
Based on 147,930,459 shares of our common stock issued and
outstanding as of December 28, 2022. Shares of our common stock
being offered pursuant to this reoffer prospectus by a selling
stockholder are counted as outstanding for computing the percentage
of that particular selling stockholder but are not counted as
outstanding for computing the percentage of any other person.
|
|
|
|
|
(4)
|
On October 8, 2020, Mr. Lazaran was appointed as a director of
our company and on June 2, 2022, Mr. Lazaran was appointed as the
chief executive officer and president of our company.
|
|
|
|
|
(5)
|
Includes (i) 91,666 shares of our common stock underlying 91,666
stock options that are vested or will be vested within 60 days of
December 28, 2022, (ii) 50,000 shares of our common stock
underlying 50,000 warrants. Does not include 1,233,334 shares of
our common stock underlying 1,233,334 unvested stock options which
are being offered under this reoffer prospectus. Also does not
include unvested 258,334 shares of common stock which we intend to
issue as restricted awards pursuant to our 2020 Equity Incentive
Plan which are being offered under this reoffer prospectus.
|
|
|
|
|
(6)
|
Consists of (i) 100,000 shares of our common stock issuable at
an exercise price of $0.53 per share until April 2, 2030 upon
exercise of the stock options granted pursuant to the stock option
agreement dated April 3, 2020, which were granted pursuant to our
2018 Stock Option Plan, (ii) 50,000 shares of our common stock
issuable at an exercise price of $1.09 per share until March 31,
2031 upon exercise of the stock options granted pursuant to the
stock option agreement dated March 31, 2021, which were granted
pursuant to our 2020 Equity Incentive Plan, (iii) 1,000,000 shares
of our common stock issuable at an exercise price of $0.428 per
share until July 29, 2032 upon exercise of the stock options
granted pursuant to the stock option agreement dated July 29, 2022,
(iv) 175,000 shares of our common stock issuable at an exercise
price of $0.25 per share until November 16, 2022 upon exercise of
the stock options granted pursuant to the stock option agreement
dated November 16, 2022, and (v) 856,666 shares of common stock
issued as restricted awards pursuant to our 2020 Equity Incentive
Plan. Also consists of unvested 258,334 shares of common stock
which we intend to issue as restricted awards pursuant to our 2020
Equity Incentive Plan.
|
|
|
|
|
(7)
|
On April 28, 2017, our board of directors appointed Mr. Guarino
as the chief financial officer, secretary and treasurer and a
director of our company.
|
|
|
|
|
(8)
|
Includes (i) 350,000 shares of our common stock underlying
350,000 stock options that are vested or will be vested within 60
days of December 28, 2022. Does not include 350,000 shares of our
common stock underlying 350,000 unvested stock options which are
being offered under this reoffer prospectus. Also does not include
unvested 125,000 shares of common stock which we intend to issue as
restricted awards pursuant to our 2020 Equity Incentive Plan which
are being offered under this reoffer prospectus.
|
|
|
|
|
(9)
|
Consists of (i) 150,000 shares of our common stock issuable at
an exercise price of $0.53 per share until April 2, 2030 upon
exercise of the stock options granted pursuant to the stock option
agreement dated April 3, 2020, which were granted pursuant to our
2018 Stock Option Plan, (ii) 200,000 shares of our common stock
issuable at an exercise price of $1.09 per share until March 31,
2031 upon exercise of the stock options granted pursuant to the
stock option agreement dated March 31, 2021, which were granted
pursuant to our 2020 Equity Incentive Plan, (iii) 250,000 shares of
our common stock issuable at an exercise price of $0.51 per share
until August 23, 2032 upon exercise of the stock options granted
pursuant to the stock option agreement dated August 23, 2022, which
were granted pursuant to our 2020 Equity Incentive Plan, (iv)
100,000 shares of our common stock issuable at an exercise price of
$0.25 per share until November 16, 2032 upon exercise of the stock
options granted pursuant to the stock option agreement dated
November 16, 2022, which were granted pursuant to our 2020 Equity
Incentive Plan, (v) 625,000 shares of common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan, and
(vi) 610,000 shares of common stock issued as restricted awards
pursuant to our 2013 Equity Incentive Plan. Also consists of
unvested 125,000 shares of common stock which we intend to issue as
restricted awards pursuant to our 2020 Equity Incentive Plan.
|
|
(10)
|
On July 22, 2016, Mr. Keay was appointed as a director of our
company and on August 17, 2017, Mr. Keay was appointed as the
chairman of the board.
|
|
|
|
|
(11)
|
Consists of (i) 1,125,000 shares of our common stock held
directly, (ii) 2,000,000 shares of our common stock held by Klutch
Financial Corp., and (iii) 850,000 shares of our common stock
underlying 850,000 stock options that are vested or will be vested
within 60 days of December 28, 2022. Mr. Keay exercises voting and
dispositive power with respect to the shares of our common stock
that are beneficially owned by Klutch Financial Corp. Does not
include unvested 375,000 shares of common stock which we intend to
issue as restricted awards pursuant to our 2020 Equity Incentive
Plan which are being offered under this reoffer prospectus.
|
|
|
|
|
(12)
|
Consists of (i) 350,000 shares of our common stock issuable at
an exercise price of $1.29 per share until April 28, 2027 upon
exercise of the stock options granted pursuant to the stock option
agreement dated April 28, 2017, which were granted pursuant to our
2013 Equity Incentive Plan, (ii) 250,000 shares of our common stock
issuable at an exercise price of $0.53 per share until April 2,
2030 upon exercise of the stock options granted pursuant to the
stock option agreement dated April 3, 2020, which were granted
pursuant to our 2018 Stock Option Plan, (iii) 250,000 shares of our
common stock issuable at an exercise price of $1.09 per share until
March 31, 2031 upon exercise of the stock options granted pursuant
to the stock option agreement dated March 31, 2021, which were
granted pursuant to our 2020 Equity Incentive Plan, and (iv)
1,125,000 shares of common stock issued as restricted awards
pursuant to our 2020 Equity Incentive Plan. Also consists of
unvested 375,000 shares of common stock which we intend to issue as
restricted awards pursuant to our 2020 Equity Incentive Plan
|
|
|
|
|
(13)
|
On September 14, 2018, Mr. Sudano was appointed as a director of
our company.
|
|
|
|
|
(14)
|
Includes (i) 125,000 shares of our common stock underlying
125,000 stock options that are vested or will be vested within 60
days of December 28, 2022. Does not include 125,000 shares of our
common stock underlying 125,000 unvested stock options which are
being offered under this reoffer prospectus. Also does not include
unvested 50,000 shares of common stock which we intend to issue as
restricted awards pursuant to our 2020 Equity Incentive Plan which
are being offered under this reoffer prospectus.
|
|
|
|
|
(15)
|
Consists of (i) 100,000 shares of our common stock issuable at
an exercise price of $0.53 per share until April 2, 2030 upon
exercise of the stock options granted pursuant to the stock option
agreement dated April 3, 2020, which were granted pursuant to our
2018 Stock Option Plan, (ii) 50,000 shares of our common stock
issuable at an exercise price of $1.09 per share until March 31,
2031 upon exercise of the stock options granted pursuant to the
stock option agreement dated March 31, 2021, which were granted
pursuant to our 2020 Equity Incentive Plan, (iii) 100,000 shares of
our common stock issuable at an exercise price of $0.51 per share
until August 23, 2032 upon exercise of the stock options granted
pursuant to the stock option agreement dated August 23, 2022, which
were granted pursuant to our 2020 Equity Incentive Plan, and (iv)
150,000 shares of common stock issued as restricted awards pursuant
to our 2020 Equity Incentive Plan. Also consists of unvested 50,000
shares of common stock which we intend to issue as restricted
awards pursuant to our 2020 Equity Incentive Plan
|
|
|
|
|
(16)
|
On November 16, 2022, Mr. Rauch was appointed as a director of
our company.
|
|
|
|
|
(17)
|
Includes (i) 80,000 shares of our common stock held by David and
Julie Rauch Trust, and (ii) 600,000 shares of our common stock
underlying 100,000 shares of our Series E Preferred Stock held by
David and Julie Rauch Trust. Each share of our Series E Preferred
Stock is convertible, after November 23, 2023, at the option of our
company, into that number of units of our company determined by
dividing the stated value ($1.00 per share) of such share by $0.25.
Each unit will consist of one share of our common stock and
one-half of one common stock purchase warrant with each whole
common stock purchase warrant entitling the holder to acquire one
share of our common stock at an exercise price of $0.3125 for three
years following conversion. A holder may, at its option, after
January 31, 2023, convert all, but no less than all, of shares of
our Series E Preferred Stock held by such holder into that number
of units determined by dividing the stated value of such shares by
$0.25. Each share of our Series E Preferred Stock will also
automatically convert, upon the occurrence of a certain fundamental
transaction, into that number of units determined by dividing the
stated value of such share by $0.25. David Rauch and Julie Rauch
are the only trustees and the only beneficiaries of the David and
Julie Rauch Trust. Julie Rauch is the spouse of David Rauch. Does
not include 100,000 shares of our common stock underlying 100,000
unvested stock options which are being offered under this reoffer
prospectus. Also does not include unvested 100,000 shares of common
stock which we intend to issue as restricted awards pursuant to our
2020 Equity Incentive Plan which are being offered under this
reoffer prospectus.
|
|
(18)
|
Consists of (i) 100,000 shares of our common stock issuable at
an exercise price of $0.25 per share until November 16, 2032 upon
exercise of the stock options granted pursuant to our 2020 Equity
Incentive Plan and (ii) 50,000 shares of common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan. Also
consists of unvested 50,000 shares of common stock which we intend
to issue as restricted awards pursuant to our 2020 Equity Incentive
Plan.
|
|
|
|
|
(19)
|
Frank Chessman has been an employee of our company since May
2012.
|
|
|
|
|
(20)
|
Includes 746,000 shares of our common stock underlying 746,000
stock options that are vested or will be vested within 60 days of
December 28, 2022.
|
|
|
|
|
(21)
|
Consists of 250,000 shares of our common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan.
|
|
|
|
|
(22)
|
Rick Chessman has been an employee of our company since January
2016.
|
|
|
|
|
(23)
|
Includes 80,000 shares of our common stock underlying 80,000
stock options that are vested or will be vested within 60 days of
December 28, 2022.
|
|
|
|
|
(24)
|
Consists of 12,500 shares of our common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan.
|
|
|
|
|
(25)
|
Ryan Chessman has been an employee of our company since January
2019.
|
|
|
|
|
(26)
|
Includes 26,666 shares of our common stock underlying 26,666
stock options that are vested or will be vested within 60 days of
December 28, 2022.
|
|
|
|
|
(27)
|
Consists of 12,500 shares of our common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan.
|
|
|
|
|
(28)
|
Brandon Yates has been an employee of our company since January
2021.
|
|
|
|
|
(29)
|
Includes 40,000 shares of our common stock underlying 40,000
stock options that are vested or will be vested within 60 days of
December 28, 2022.
|
|
|
|
|
(30)
|
Consists of 25,000 shares of our common stock issued as
restricted awards pursuant to our 2020 Equity Incentive Plan.
|
|
|
|
|
(31)
|
Jeff Wright has been an employee of our company since April
2021.
|
|
|
|
|
(32)
|
Includes 30,000 shares of our common stock underlying 30,000
stock options that are vested or will be vested within 60 days of
December 28, 2022.
|
|
(33)
|
Consists of 12,500 shares of our
common stock issued as restricted awards pursuant to our 2020
Equity Incentive Plan.
|
|
|
|
|
(34)
|
Michael Reagan has been our legal
counsel since April 2017.
|
|
|
|
|
(35)
|
Includes (i) 55,000 shares of our
common stock underlying 55,000 stock options that are vested or
will be vested within 60 days of December 28, 2022 and (ii)
3,000,000 shares of our common stock underlying 500,000 shares of
our Series E Preferred Stock. Each share of our Series E Preferred
Stock is convertible, after November 23, 2023, at the option of our
company, into that number of units of our company determined by
dividing the stated value ($1.00 per share) of such share by $0.25.
Each unit will consist of one share of our common stock and
one-half of one common stock purchase warrant with each whole
common stock purchase warrant entitling the holder to acquire one
share of our common stock at an exercise price of $0.3125 for three
years following conversion. A holder may, at its option, after
January 31, 2023, convert all, but no less than all, of shares of
our Series E Preferred Stock held by such holder into that number
of units determined by dividing the stated value of such shares by
$0.25. Each share of our Series E Preferred Stock will also
automatically convert, upon the occurrence of a certain fundamental
transaction, into that number of units determined by dividing the
stated value of such share by $0.25.
|
|
|
|
|
(36)
|
Consists of 75,000 shares of our
common stock issued as restricted awards pursuant to our 2020
Equity Incentive Plan.
|
|
|
|
|
(37)
|
Greg Ritter has been an employee of
our company since February 2017.
|
|
|
|
|
(38)
|
Includes 130,900 shares of our
common stock underlying 130,900 stock options that are vested or
will be vested within 60 days of December 28, 2022.
|
|
|
|
|
(39)
|
Consists of 12,500 shares of our
common stock issued as restricted awards pursuant to our 2020
Equity Incentive Plan.
|
|
|
|
|
(40)
|
Jason Schrier has been an employee
of our company since January 2017.
|
|
|
|
|
(41)
|
Includes 135,000 shares of our
common stock underlying 135,000 stock options that are vested or
will be vested within 60 days of December 28, 2022.
|
|
|
|
|
(42)
|
Consists of 12,500 shares of our
common stock issued as restricted awards pursuant to our 2020
Equity Incentive Plan.
|
|
|
|
|
(43)
|
James Venia has been an employee of
our company since January 2020.
|
|
|
|
|
(44)
|
Includes 75,000 shares of our
common stock underlying 75,000 stock options that are vested or
will be vested within 60 days of December 28, 2022.
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(45)
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Consists of 12,500 shares of our
common stock issued as restricted awards pursuant to our 2020
Equity Incentive Plan.
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Plan of Distribution
The selling stockholders may, from
time to time, sell all or a portion of the shares of our common
stock on any market upon which our common stock may be listed or
quoted (currently the Nasdaq Capital Market and the Canadian
Securities Exchange), in privately negotiated transactions or
otherwise. Such sales may be at fixed prices prevailing at the time
of sale, at prices related to the market prices or at negotiated
prices. The shares of our common stock being offered for resale
pursuant to this reoffer prospectus may be sold by the selling
stockholders by one or more of the following methods, without
limitation:
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1.
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block
trades in which the broker or dealer so engaged will attempt to
sell the shares of our common stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
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2.
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purchases by broker or dealer as principal and resale by the broker
or dealer for its account pursuant to this reoffer prospectus;
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3.
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an
exchange distribution in accordance with the rules of the
applicable exchange or quotation system;
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4.
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ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
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5.
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privately negotiated transactions;
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6.
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market
sales (both long and short to the extent permitted under the
federal securities laws);
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7.
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at the
market to or through market makers or into an existing market for
the shares;
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8.
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through
transactions in options, swaps or other derivatives (whether
exchange listed or otherwise);
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9.
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a
combination of any aforementioned methods of sale; and
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10.
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any
other method permitted pursuant to applicable law.
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In effecting sales, brokers and
dealers engaged by the selling stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers may receive
commissions or discounts from a selling stockholder or, if any of
the broker-dealers act as an agent for the purchaser of such
shares, from a purchaser in amounts to be negotiated which are not
expected to exceed those customary in the types of transactions
involved. Broker-dealers may agree with a selling stockholder to
sell a specified number of the shares of our common stock at a
stipulated price per share. Such an agreement may also require the
broker-dealer to purchase as principal any unsold shares of our
common stock at the price required to fulfill the broker-dealer
commitment to the selling stockholder if such broker-dealer is
unable to sell the shares on behalf of the selling stockholder.
Broker-dealers who acquire shares of our common stock as principal
may thereafter resell the shares of our common stock from time to
time in transactions which may involve block transactions and sales
to and through other broker-dealers, including transactions of the
nature described above. Such sales by a broker-dealer could be at
prices and on terms then prevailing at the time of sale, at prices
related to the then-current market price or in negotiated
transactions. In connection with such resale, the broker-dealer may
pay to or receive from the purchasers of the shares commissions as
described above.
The selling stockholders and any
broker-dealers or agents that participate with the selling
stockholders in the sale of the shares of our common stock may be
deemed to be "underwriters" within the meaning of the Securities
Act of 1933 in connection with these sales. In that event, any
commissions received by the broker-dealers or agents and any profit
on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the
Securities Act of 1933.
From time to time, any of the
selling stockholders may pledge shares of our common stock pursuant
to the margin provisions of customer agreements with brokers. Upon
a default by a selling stockholder, his or her broker may offer and
sell the pledged shares of our common stock from time to time. Upon
a sale of the shares of our common stock, we believe that the
selling stockholders will satisfy the prospectus delivery
requirements under the Securities Act of 1933. We intend to file
any amendments or other necessary documents in compliance with the
Securities Act of 1933 which may be required in the event any of
the selling stockholders defaults under any customer agreement with
brokers.
To the extent required under the
Securities Act of 1933, a post-effective amendment to the
registration statement of which this reoffer prospectus forms a
part will be filed disclosing the name of any broker-dealers, the
number of shares of our common stock involved, the price at which
our common stock is to be sold, the commissions paid or discounts
or concessions allowed to such broker-dealers, where applicable,
that such broker-dealers did not conduct any investigation to
verify the information set out or incorporated by reference in this
reoffer prospectus and other facts material to the transaction.
We and the selling stockholders
will be subject to applicable provisions of the Securities Exchange
Act of 1934 and the rules and regulations under it, including,
without limitation, Rule 10b-5 and, insofar as a selling
stockholder is a distribution participant and we, under certain
circumstances, may be a distribution participant, under Regulation
M. All of the foregoing may affect the marketability of our common
stock.
All expenses for this reoffer
prospectus and related registration statement including legal,
accounting, printing and mailing fees are and will be borne by us.
Any commissions, discounts or other fees payable to brokers or
dealers in connection with any sale of the shares of common stock
will be borne by the selling stockholders, the purchasers
participating in such transaction, or both.
Any shares of our common stock
being offered pursuant to this reoffer prospectus which qualify for
sale pursuant to Rule 144 under the Securities Act of 1933, may be
sold under Rule 144 rather than pursuant to this reoffer
prospectus.
Under the Securities Exchange Act
of 1934, any person engaged in a distribution of the shares offered
by this reoffer prospectus may not simultaneously engage in market
making activities with respect to our common shares during the
applicable "cooling off" periods prior to the commencement of such
distribution. In addition, and without limiting the
foregoing, the selling stockholders will be subject to applicable
provisions of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, which provisions may limit the timing of
purchases and sales of the shares by the selling stockholders.
Experts
The consolidated financial
statements incorporated in this reoffer prospectus by reference
from our annual report on Form 10-K for the year ended March 31,
2022 have been audited by Prager Metis CPA, LLC, an independent
registered public accounting firm, as stated in their report (which
report expresses an unqualified opinion and includes an explanatory
paragraph related to The Alkaline Water Company Inc.'s ability to
continue as a going concern), which is incorporated herein by
reference. Such financial statements have been so incorporated in
reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
Counsel
Clark Wilson LLP, of Suite 900 -
885 West Georgia Street, Vancouver, British Columbia, Canada has
provided an opinion on the validity of the shares of our common
stock being offered pursuant to this reoffer prospectus.
Interest of Named Experts and
Counsel
No expert named in the registration
statement of which this reoffer prospectus forms a part as having
prepared or certified any part thereof (or is named as having
prepared or certified a report or valuation for use in connection
with such registration statement) or counsel named in this reoffer
prospectus as having given an opinion upon the validity of the
securities being offered pursuant to this reoffer prospectus or
upon other legal matters in connection with the registration or
offering such securities was employed for such purpose on a
contingency basis. Also, at the time of such preparation,
certification or opinion or at any time thereafter, through the
date of effectiveness of such registration statement or that part
of such registration statement to which such preparation,
certification or opinion relates, no such person had, or is to
receive, in connection with the offering, a substantial interest,
direct or indirect, in our company or any of its parents or
subsidiaries. Nor was any such person connected with our
company or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director,
officer or employee.
Material Changes
There have been no material changes
to the affairs of our company since March 31, 2022 which have not
previously been described in a report on Form 10-K, Form 10-Q or
Form 8-K filed with the Securities and Exchange Commission.
Incorporation of Certain
Information by Reference
The following documents filed by
our company with the Securities and Exchange Commission are
incorporated into this reoffer prospectus by reference:
1. our
annual report on Form 10-K filed on July 14, 2022;
2. our
quarterly reports on Form 10-Q filed on
August 15, 2022 and
November 14, 2022;
3. our
notice of annual meeting of stockholders and proxy statement on
Schedule 14A filed on August 4, 2022;
4. our
current reports on Form 8-K filed on
April 29, 2022,
May 4, 2022,
May 6, 2022,
May 9, 2022,
May 13, 2022,
June 3, 2022,
June 16, 2022,
June 24, 2022,
July 28, 2022,
August 26, 2022,
September 1, 2022,
September 9, 2022,
September 30, 2022,
November 10, 2022,
November 17, 2022,
November 23, 2022 and
December 23, 2022 (except, with respect to each of the
foregoing, for the portions of such reports which were deemed to be
furnished and not filed); and
5. the
description of our common stock contained in
our Form 8-A filed on December 4, 2018, which refers to
the description of our securities contained in
the post-effective amendment no. 2 to our registration statement
on Form S-1 (File No. 333-209124) filed on November 24,
2017, including any amendments or reports filed for the
purpose of updating such description.
In addition to the foregoing, all
documents that we subsequently file pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment indicating that all of
the securities offered pursuant to the registration statement of
which this reoffer prospectus forms a part have been sold or
deregistering all securities then remaining unsold, will be deemed
to be incorporated by reference into this reoffer prospectus and to
be part hereof from the date of filing of such documents. Any
statement contained in a document incorporated by reference in this
reoffer prospectus will be deemed to be modified or superseded for
purposes of this reoffer prospectus to the extent that a statement
contained in this reoffer prospectus or in any subsequently filed
document that is also incorporated by reference in this reoffer
prospectus modifies or supersedes such statement. Any
statement so modified or superseded will not be deemed, except as
so modified or superseded, to constitute a part of this reoffer
prospectus.
Where You Can Find More
Information
We will provide to each person,
including any beneficial owner, to whom this reoffer prospectus is
delivered, at no cost, upon written or oral request, a copy of any
or all of the information that has been incorporated by reference
in this reoffer prospectus but not delivered with this reoffer
prospectus. Requests for documents should be directed to The
Alkaline Water Company Inc., 8541 E Anderson Drive, Suite 100,
Scottsdale, Arizona 85255, Attention: President, telephone number
(480) 656-2423. Exhibits to these filings will not be sent unless
those exhibits have been specifically incorporated by reference in
such filings.
We file annual, quarterly and
current reports, proxy statements and other information with the
Securities and Exchange Commission. Such filings are available to
the public over the internet at the Securities and Exchange
Commission's website at http://www.sec.gov.
We have filed with the Securities
and Exchange Commission a registration statement on Form S-8 under
the Securities Act of 1933 with respect to the securities offered
under this reoffer prospectus. This reoffer prospectus, which forms
a part of that registration statement, does not contain all
information included in the registration statement. Certain
information is omitted and you should refer to the registration
statement and its exhibits.
You should only rely on the
information incorporated by reference or provided in this reoffer
prospectus or any supplement. We have not authorized anyone else to
provide you with different information. This reoffer prospectus
does not constitute an offer to sell or a solicitation of an offer
to buy any of the securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make
such offer or solicitation. You should not assume that the
information in this reoffer prospectus or any supplement is
accurate as of any date other than the date of this reoffer
prospectus.
7,925,000
Shares
The Alkaline Water Company Inc.
Common Stock
_________________________________
Reoffer Prospectus
_________________________________
December 28, 2022
Part II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation
of Documents by Reference.
The following documents filed by
our company with the Securities and Exchange Commission are
incorporated into this registration statement by reference:
1. our
annual report on Form 10-K filed on July 14, 2022;
2. our
quarterly reports on Form 10-Q filed on
August 15, 2022 and
November 14, 2022;
3. our
notice of annual meeting of stockholders and proxy statement on
Schedule 14A filed on August 4, 2022;
4. our
current reports on Form 8-K filed on
April 29, 2022,
May 4, 2022,
May 6, 2022,
May 9, 2022,
May 13, 2022,
June 3, 2022,
June 16, 2022,
June 24, 2022,
July 28, 2022,
August 26, 2022,
September 1, 2022,
September 9, 2022,
September 30, 2022,
November 10, 2022,
November 17, 2022,
November 23, 2022 and
December 23, 2022 (except, with respect to each of the
foregoing, for the portions of such reports which were deemed to be
furnished and not filed); and
5. the
description of our common stock contained in
our Form 8-A filed on December 4, 2018, which refers to
the description of our securities contained in
the post-effective amendment no. 2 to our registration statement
on Form S-1 (File No. 333-209124) filed on November 24,
2017, including any amendments or reports filed for the
purpose of updating such description.
In addition to the foregoing, all
documents that we subsequently file pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment indicating that all of
the securities offered pursuant to this registration statement have
been sold or deregistering all securities then remaining unsold,
will be deemed to be incorporated by reference into this
registration statement and to be part hereof from the date of
filing of such documents. Any statement contained in a document
incorporated by reference in this registration statement will be
deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained in
this registration statement or in any subsequently filed document
that is also incorporated by reference in this registration
statement modifies or supersedes such statement. Any statement so
modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this registration
statement.
Item 4. Description
of Securities.
Not applicable.
Item 5. Interests
of Named Experts and Counsel.
No expert named in this
registration statement as having prepared or certified any part
thereof (or is named as having prepared or certified a report or
valuation for use in connection with this registration statement)
or counsel named in this registration statement as having given an
opinion upon the validity of the securities being offered pursuant
to this registration statement or upon other legal matters in
connection with the registration or offering such securities was
employed for such purpose on a contingency basis. Also, at the time
of such preparation, certification or opinion or at any time
thereafter, through the date of effectiveness of such registration
statement or that part of such registration statement to which such
preparation, certification or opinion relates, no such person had,
or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in our company or any of its parents
or subsidiaries. Nor was any such person connected with our company
or any of its parents or subsidiaries as a promoter, managing or
principal underwriter, voting trustee, director, officer or
employee.
Item 6. Indemnification
of Directors and Officers.
The Nevada Revised Statutes provide
that:
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a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and
in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful;
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a corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses,
including amounts paid in settlement and attorneys' fees actually
and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a
manner which he reasonably believed to be in or not opposed to the
best interests of the corporation. Indemnification may not be made
for any claim, issue or matter as to which such a person has been
adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to
the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the
person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper; and
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to the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding, or in defense of any
claim, issue or matter therein, the corporation must indemnify him
against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense.
The Nevada Revised Statutes provide
that we may make any discretionary indemnification only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is
proper in the circumstances. The determination must be made:
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by our stockholders;
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by our board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or
proceeding;
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if a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion;
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if a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion; or
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by court order.
Our bylaws provide for the
mandatory indemnification of our directors and officers to the
fullest extent legally permissible under the Nevada Revised
Statutes from time to time against all expenses, liability and loss
reasonably incurred or suffered by such person in connection with
he or she having been or being a party to, threatening to be made a
party to, or involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he or she is or was a director or an officer of
the company. Advance payment of expenses by the company to such
director or officer, as these expenses are incurred in defending a
civil or criminal action, suit or proceeding, are subject to an
undertaking by or on behalf of the director or officer to repay the
amount of such payment if it is ultimately determined by a court of
competent jurisdiction that he or she is not entitled to be
indemnified by our company. The right of indemnification under our
bylaws is not exclusive of any other right to indemnification a
director or an officer may have.
Our bylaws allow us to purchase and
maintain insurance on behalf of any person who is or was a director
or officer of our company against any liability asserted against
such person and incurred in any such capacity or arising out of
such status, whether or not we would have the power to indemnify
such person.
We have directors and officers
liability insurance under which our directors or officers are
insured against liability which they may incur in their capacities
as such.
Item 7. Exemption
from Registration Claimed.
15,000 shares of our common stock
issued under our 2020 Equity Incentive Plan were issued to Frank
Lazaran, who was a director of our company at the time, and in
issuing these shares we relied on the registration exemption
provided for in Section 4(a)(2) of the Securities Act of 1933.
1,225,000 shares of our common
stock issued under our 2020 Equity Incentive Plan were issued to
certain directors,
officers and employees of our company, and in issuing these
shares we relied on the registration exemption provided for in
Section 4(a)(2) of the Securities Act of 1933.
Item 8. Exhibits.
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Exhibit
Number
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Description
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(4)
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Instruments Defining the Rights
of Security Holders, including Indentures
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4.1
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Articles of Incorporation (incorporated by reference from our
Form S-1 Registration Statement, filed on October 28,
2011)
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4.2
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Certificate of Change (incorporated by reference from our
Quarterly Report on Form 10-Q, filed on August 13,
2013)
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4.3
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Articles of Merger (incorporated by reference from our Quarterly
Report on Form 10-Q, filed on August 13, 2013)
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4.4
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Certificate of Amendment to Articles of Incorporation
(incorporated by reference from our Current Report on Form 8-K,
filed on October 11, 2013)
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4.5
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on October 11, 2013)
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4.6
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on November 12, 2013)
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4.7
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Certificate of Change (incorporated by reference from our
Current Report on Form 8-K, filed on December 30, 2015)
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4.8
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Certificate of Amendment to Articles of Incorporation
(incorporated by reference from our Current Report on Form 8-K,
filed on January 25, 2016)
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4.9
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Certificate of Amendment to Certificate of Designation
(incorporated by reference from our Current Report on Form 8-K,
filed on January 25, 2016)
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4.10
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on April 5, 2016)
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4.11
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Certificate of Withdrawal of Certificate of Designation
(incorporated by reference from our Current Report on Form 8-K,
filed on April 4, 2017)
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4.12
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on May 4, 2017)
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4.13
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Certificate of Amendment to Certificate of Designation
(incorporated by reference from our Current Report on Form 8-K,
filed on November 6, 2017)
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4.14
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Certificate of Withdrawal of Certificate of Designation
(incorporated by reference from our Quarterly Report on Form 10-Q,
filed on November 20, 2017)
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4.15
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on May 19, 2021)
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4.16
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Certificate of Designation (incorporated by reference from our
Current Report on Form 8-K, filed on November 23, 2022)
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4.17
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Amended and Restated Bylaws (incorporated by reference from our
Current Report on Form 8-K, filed on October 15, 2018)
|
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4.18
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2013 Equity Incentive Plan (incorporated by reference from our
Current Report on Form 8-K, filed on January 25, 2016)
|
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4.19
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2018 Stock Option Plan (incorporated by reference from our
Current Report on Form 8-K, filed on April 25, 2018)
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4.20*
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2020
Equity Incentive Plan
|
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(5)
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Opinion regarding
Legality
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5.1*
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Opinion
of Clark Wilson LLP regarding the legality of the securities being
registered
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(23)
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Consents of Experts and
Counsel
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23.1*
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Consent
of Prager Metis CPAs, LLC
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23.2*
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Consent
of Clark Wilson LLP (included in Exhibit 5.1)
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(107)
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Filing Fee Table
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107*
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Filing Fee Table
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*Filed herewith.
Item 9. Undertakings.
The undersigned registrant hereby
undertakes:
1. to file,
during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. to
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii. to reflect in
the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
iii. to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement;
provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished
to the Securities and Exchange Commission by the registrant
pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement;
2. that, for the
purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
3. to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby
undertakes that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Scottsdale, State of Arizona on
December 28, 2022.
The Alkaline Water Company
Inc.
By:
/s/ Frank
Lazaran
Frank
Lazaran
President, Chief Executive Officer and Director
(Principal
Executive Officer)
Pursuant to the requirements of the
Securities Act of 1933, this registration statement has been signed
by the following persons in the capacities and on the dates
indicated.
/s/ Frank
Lazaran
Frank
Lazaran
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: December 28,
2022
/s/ David
A. Guarino
David
A. Guarino
Chief Financial Officer, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer)
Date: December 28,
2022
/s/ Aaron
Keay
Aaron
Keay
Director
Date: December 28,
2022
/s/ Brian
Sudano
Brian
Sudano
Director
Date: December 28,
2022
/s/ David
Rauch
David Rauch
Director
Date: December 28, 2022
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