OTC Pink Basic Disclosure Guidelines

Transcription

1 OTC Pink Basic Disclosure Guidelines

2 TABLE OF CONTENTS 1) Name of the issuer and its predecessors 2) Address of the issuer s principal executive offices 3) Securities Information 4) Issuance History 5) Financials 6) Issuer s Business, Products and Services 7) Issuer s Facilities 8) Officers, Directors, and Control Persons 9) Third Party Providers 10) Issuer Certification

3 1) Name of the issuer and its predecessors (if any) In answering this item, please also provide any names used by predecessor entities in the past five years and the dates of the name changes. Current Name of Issuer: Kona Gold Solutions, Inc. Past Names of Issuer: Formerly=Union Equity, Inc. until Formerly=PhaserTek Medical, Inc. until Formerly=Class-ique Talent Agency, Inc. until ) Address of the issuer s principal executive offices Company Headquarters 746 North Drive Suite A Melbourne, FL Phone: info@konagoldhemp.com Website: IR Contact 746 North Drive Suite A Melbourne, FL Phone: investorrelations@konagoldhemp.com 3) Securities Information Trading Symbol: KGKG Exact title and class of securities outstanding: Common Shares CUSIP: 50050L 107 Par Value: $ Common Shares Authorized: 1,000,000,000 (as of 09/30/2018) Common Shares Issued: 496,965,449 (as of 09/30/2018) Common Shares Outstanding: 496,965,449 (as of 09/30/2018) Float: 370,170,851 (as of 09/30/2018) Holders Qualified: 85 (as of 09/30/2018) Trading Symbol: KGKG

4 Exact title and class of securities outstanding: Preferred A CUSIP: 50050L 107 Par Value: $ Preferred A Authorized: 5,000,000 (as of 09/30/2018) Preferred A Outstanding: 4,000,000 (as of 09/30/2018) Trading Symbol: KGKG Exact title and class of securities outstanding: Preferred B CUSIP: 50050L 107 Par Value: $ Preferred B Authorized: 1,200,000 (as of 09/30/2018) Preferred B Outstanding: 1,138,000 (as of 09/30/2018) Trading Symbol: KGKG Exact title and class of securities outstanding: Preferred C CUSIP: 50050L 107 Par Value: $ Preferred C Authorized: 3,300,000 (as of 09/30/2018) Preferred C Outstanding: 316,000 (as of 09/30/2018) Trading Symbol: KGKG Exact title and class of securities outstanding: Preferred D CUSIP: 50050L 107 Par Value: $ Preferred D Authorized: 500,000 (as of 09/30/2018) Preferred D Outstanding: 500,000 (as of 09/30/2018) The name and address of the transfer agent: Action Stock Transfer 2469 E. Fort Union Blvd, Suite 214 Salt Lake City, UT (801) voice (801) fax Action Stock Transfer Corporation is registered under the Exchange Act. There are no restrictions on the transfer of security There were no trading suspension orders issued by the SEC in the past 12 months There were no stock splits, recapitalization, mergers, acquisitions, spin-offs, or reorganizations that occurred in the last 12 months. 4) Issuance History Third Quarter ,000,000 restricted common shares were issued to an investment firm per a convertible note at par value of on July 21 st 2016.

5 10,000,000 restricted common shares were issued to an accredited investor per a convertible note at par value of on July 25 th, ,000,000 restricted common shares were issued to Joseph Thornburg per a convertible note at par value of on August 1 st, An investment firm returned 30,000,000 shares of common stock to treasury at a cost basis of August 8 th, ,000,000 restricted common shares were issued to an investment firm per a convertible note at par value of on September 27 th, Fourth Quarter ,000,000 restricted common shares were issued to an investment firm per a convertible note at par value of on October 26 th, First Quarter ,000,000 Restricted Common Shares were issued to William Green per services rendered at par value of on January 27 th, ,000,000 restricted common shares were issued to an investment firm per a convertible note at par value of on March 15 th, ,000 Preferred Series C shares were issued to an accredited investor for an investment of $86, at a cost basis.001 through subscription agreement on March 27 th, Second Quarter ,000 Preferred Series C shares were issued to an accredited investor for an investment of $106, at a cost basis through subscription agreement on April 10 th, Third Quarter 2017 Stock Vest was hired as an investor relations company at a charge of 5,000,000 restricted common shares at par value of on July 5 th, ,000,000 Restricted Common Shares were issued per a convertible note to Joseph Thornburg at a cost basis of on July 10 th, ,000,000 Common Shares were issued to an accredited investor for an investment of $9, at a cost basis through subscription agreement on August 1 st, ,000 Restricted Common Shares were issued to Azaliya Latypova per employment agreement at par value of on August 14 th, 2017.

6 Nancy Holloway returned 20,000,000 shares of common stock to treasury at a cost basis of on August 16 th, Fourth Quarter ,000 Preferred Series C shares were issued to an accredited investor for an investment of $110, at a cost basis.001 through subscription agreement on December 22 nd, Robert Clark was issued 2,700,000 Series A Preferred share per his employment agreement at par value of December 29 th, First Quarter 2018 Robert Clark was issued 500,000 Series D Preferred shares per his employment agreement at par value of on January 24 th, Warren Thornburg returned 8,000,000 shares of common stock to treasury at a cost basis of on February 1 st, ,000,000 Common Shares were issued to an accredited investor for an investment of $44, at a cost basis.0008 through subscription agreement March 6 th, ,000,000 restricted common shares were issued to Joseph Thornburg per a convertible note at par value of.01 on March 14 th, Second Quarter ,000,000 restricted common shares were returned to treasury at a cost basis of by Gone Green Inc. on April 19 th, ,000,000 restricted common shares were returned to treasury at a cost basis of by Robert Clark on April 19 th, Third Quarter ,000,000 Restricted Common Shares were issued to Christopher Selinger per employment agreement at par value of on September 7, ,000 Restricted Common Shares were issued to Matthew Crystal per board member agreement at par value of on September 7, ) Financials Listed in the Statement of Stockholders is Kona Gold Solution, Inc. s ownership of 2,476,722 shares of Elev8 Brands, Inc. Preferred Series D shares valued at $5,944,133 as of 09/30/2018.

7 Kona Gold Solutions, Inc. Income Statement Quarter Ending September 30, 2018 September 30,2018 June 30,2018 March 31, 2018 Revenue Sales 31,783 28,594 10,731 Shipping and Delivery Income 723 Total Income 32,506 28,594 10,731 Cost of Goods Sold Cost of Goods Sold 21,728 20,922 6,136 Freight and Shipping Costs 6,980 Total COGS 28,708 20,922 6,136 Gross Income 3,798 7,672 4,596 Expenses Automobile Expense 219 Advertising and Promotion 3,415 1,479 1,726 Bank Service Charges Depreciation Expense 1,138 Dues and Subscriptions Insurance 1,727 Legal 2,150 1,787 Management Fees 5,000 31,000 35,250 Meals and Entertainment Office Supplies 1, Product Development and Design 500 1,205 Professional Fees 7,687 1,120 6,924 Public Company Fees ,384 Rent Expense 12,797 7,930 2,087 Repairs and Maintenance Sales and Use Tax Shipping Expense 3,975 3,095 Shipping Supplies 77 Travel Expense 1, Utilities 1, Web Development and Hosting Total Expenses 37, , , Net Income (Loss) (34,016) (52,828) (52,099)

8 Kona Gold Solutions, Inc. Balance Sheet Quarter Ending September 30, 2018 ASSETS September 30, 2018 Current Assets Wells Fargo 38,640 Accounts Receivable 15,898 Other Receivables 826 Due from Shareholder Total Current Assets 55,364 Other Assets Inventory Asset 6,249 Prepaid Expenses 15,000 Prepaid Rent 34,125 Total Other Assets 55,374 Fixed Assets Accumulated Depreciation (2,262) Furniture and Equipment 32,135 Total Fixed Assets 29,873 Total Assets $ 140,611 LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts Payable Shipping Cost Payable Sales Tax Payable 3 Total Current Liabilities 3 Total Liabilities 3 Stockholder's Equity (Defecit) Preferred Stock Common Stock Common Stock ( 25,000,000 Common Stock) Retained Earnings (380,977) Additional Paid in Capital Net Income (144,693) Capital Investment 666,218 Opening Balance 60 Deficit Total Equity 140,608 Total Liabilities and Stockholder's Equity 140,611

9 Kona Gold Solutions, Inc. Cash Flow Quarter Ending September 30, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Cash Flows From Operating Activities Net Income (Loss) (34,016) (52,828) (52,099) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities Depreciation Expense Forgiveness of Debt Prepaid Expenses (15,000) Accounts Receivable (7,750) (4,876) (2,016) Other Receivables 1,782 Inventory 20,438 20,922 6,136 Accounts Payable Tax Payable (17) 9 Deposits Stock Issued to Repay Debt Common Stock Issued for Services Net Cash Used by Operation Activities (34,546) (36,799) (47,971) Cash Flow from Investing Activities Prepaid Rent 12,797 4,266 (51,187) Increase Due to Related Party FFE Accumulated Depreciation 1,138 Purchase of FFE (760) (25,097) (1,989) Net Cash Provided by Investing Activitie 13,175 (20,832) (53,176) Cash Flows from Financing Activities Opening Balance Equity Proceeds from Issuance of Common Stock Proceeds from Issuance of Preferred Stock Convertible Notes Payable Notes Payable Members Equity Stockholder Contributions Capital Investment 35,000 57,470 92,000 Net Cash Provided by Financing Activitie 35,000 57,470 92,000 Net Change in Cash Cash in Beginning of Period 25,010 25,172 34,349 Net cash increase for period 13,629 (162) (9,147) Opening Balance Equity Cash at End of Period $ 38,640 $ 25,010 $ 25,202 Supplemental Cash Flow Information Cash Paid During the Period for: Interest Income Taxes

10 Kona Gold Solutions, Inc. Statement of Stockholder's (Defecit) Quarter Ending September 30, 2018 Total Common Stock Preferred Stock Elev8 Brands, Inc. Preferred Stock Additional Paid Accumulated Stockholder Shares Amount Shares Amount Shares Amount in Capital Defecit Defecit Total Balance March 31, ,465,449 $ 6,465 5,693,000 $ 57 2,476,722 $ 9,139, ,383 (401,611) 142,772 Common Shares Preferred Stock Series A Preferred Stock Series B Preferred Stock Series C Preferred Stock Series D Retired Shares (160,000,000) (1,600) Balance June 30, ,465,449 $ 4,865 5,693,000 $ 57 2,476,722 $ 8,470, ,853 (454,441) 147,413 Common Shares 10,500, Preferred Stock Series A Preferred Stock Series B Preferred Stock Series C Preferred Stock Series D Retired Shares Balance September 30, ,965,449 $ 4,970 5,693,000 $ 57 2,476,722 $ 5,944, ,218 (525,610) 140,608

11 1. Organization & Description of Business Kona Gold Solutions, Inc. Notes to Financials Quarter Ending September 30, 2018 A. Kona Gold Solutions, Inc. is a premier lifestyle company that specializes in developing hemp and CBD products in the functional beverage and fitness markets. Focusing on the hemp energy drink, CBD energy water, and CBD water markets, Kona Gold Solutions, Inc. has positioned itself as a premium lifestyle brand. B. Kona Gold LLC is a wholly-owned subsidiary of Kona Gold Solutions, Inc. which focuses on creating great tasting and healthy hemp infused energy drinks in the functional beverage market for those who lead an active lifestyle. C. HighDrate LLC is a wholly-owned subsidiary of Kona Gold Solutions, Inc. which focuses on the development and marketing of CBD infused energy waters available in a variety of great tasting flavors. HighDrate LLC has single handedly created a new product niche with its healthy CBD energy waters geared towards the fitness and wellness markets. 2. Summary of Significant Accounting Policies Fiscal Year End and Effective Reporting Date The board of directors of the Company, as provided by the Company s bylaws, and in accordance with generally accepted accounting principles, has established a fiscal year end for accounting purposes for the Company. A fiscal year end of December 31 was designated by the board in its initial board meeting, and remains unchanged. Use of Estimates Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. Accounts Receivable The Company considers accounts receivable to be fully collectible. Accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible they will be charged to operations when that determination is made.

12 Fair Value of Financial Instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. Inventories Inventories consist of hemp energy drinks, CBD Energy Waters, and Apparel. The shelf life of all beverage inventory is two years. The company cycles through all inventory on a consistent basis. With the cost associated with the products not changing the Company recognized all inventory and cost of goods sold at purchased cost. Revenue Recognition The Company recognizes revenue from product sales or services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. The Company sales consist of natural hemp infused products as well as CBD based products which are purchased from outside vendors. These purchases are done prior to orders so we have on hand. 3. Going Concern Competition in the hemp and CBD market is high however Kona Gold Hemp Energy Drinks and HighDrate CBD Energy Waters have gained quick traction and market share in their respective markets. The Company has yet to see any real competitors in the CBD Energy Water market and continue to grow market share in the hemp energy drink segment. Kona Gold Hemp Energy Drinks have the highest level of competition being in the energy drink sector with competitors being of very large corporations in the non-hemp energy drink market. Kona Gold Hemp Energy Drinks bring premium quality product with premium ingredients to the market. Plans to expand market share require putting capital into marketing and advertising as well as bring on additions sales representatives and distributors. Management plans to increase liquidity and continue to increase funding for operations. 4. Stock Preferred Stock Preferred Series A Stock shall be convertible to share of the Corporation s common stock at a 1 to 1 ratio. Preferred Series B Stock shall be convertible to share of the Corporation s common stock at a 1 to 1 ratio. Preferred Series C Stock shall be convertible to 1,000 shares of common stock. Preferred Series D Stock shall be convertible to 1,000 shares of common stock and shall have the right to one vote per each share of Series D Preferred Stock that they hold. Preferred stock consists of 10,000,000 shares authorized at $ par value. At September 30, 2018 there were 4,000,000 Preferred A shares issued and outstanding, 1,138,000 Preferred B shares issued

13 and outstanding, 316,000 Preferred C shares issued and outstanding, and 500,000 Preferred D shares issued and outstanding. Common Stock Common Stock consists of 1,000,000,000 shares authorized at $ par value. At September 30, 2018 there were 496,965,449 issued and outstanding. 5. Commitments and Contingencies The Company has no commitments and contingencies. 6. Vendors Stock Vest was hired as an investor relations company at a charge of 5,000,000 restricted common stock at a par value of Employees Robert Clark was issued 120,000,000 restricted common shares of Kona Gold Solutions, Inc. at a cost basis value of.00001, 2,700,000 Series Preferred A issued at.00001, 650,000 Series Preferred B issued at.00001, and 500,000 Series Preferred D issued at This was issued per his employment agreement. Ryan Medico was issued 20,000,000 restricted common shares per his employment agreement with the Company at par value of Azaliya Latypova was issued 500,000 restricted common shares per his employment agreement with the Company at par value of Christopher Selinger was issued 10,000,000 restricted common shares per his employment agreement with the Company at par value of Convertible Notes Payable The Company has no Convertible Notes. 9. Shipping and Handling We bill our customers for shipping and handling charges, which are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales. 10. Facilities Kona Gold leases a new state of the art corporate office that is located at 746 North Drive Suite A in the beautiful city of Melbourne, located on the east coast of central Florida. The Company s new corporate headquarters is 4,500 square feet of office and warehouse space allowing for personnel and product scaling as the company continues to grow.

14 6) Issuer s Business, Products and Services A. Kona Gold Solutions, Inc. is a premier lifestyle company that specializes in developing hemp and CBD products in the functional beverage and fitness markets. Focusing on the hemp energy drink, CBD energy water, and CBD water markets, Kona Gold Solutions, Inc. has positioned itself as a premium lifestyle brand. Kona Gold LLC is a wholly-owned subsidiary of Kona Gold Solutions, Inc. which focuses on creating great tasting and healthy hemp infused energy drinks in the functional beverage market for those who lead an active lifestyle. HighDrate LLC is a wholly-owned subsidiary of Kona Gold Solutions, Inc. which focuses on the development and marketing of CBD infused energy waters available in a variety of great tasting flavors. HighDrate LLC has single handedly created a new product niche with its healthy CBD energy waters geared towards the fitness and wellness markets. B. In 1997, Class-ique Talent Agency, Inc., a publicly traded company, was incorporated in the State of Nevada. Class-ique Talent Agency, Inc. operating a modeling and talent agency. In 2002, PhaserTeck Medical, Inc was incorporated and developed a proprietary Phaser- Liquefaction Technology. In 2005, Union Equity, Inc. was incorporated which operating a truck leasing company. In 2015, the entity changed its name to Kona Gold Solutions, Inc. C. The Company s primary SIC code is 2086 D. The Company s fiscal year end is December 31. E. All products are developed and marketed for the functional beverage markets. The Company is founded on the basis of creating products with high-quality ingredients for the consumer that leads an active lifestyle. 7) Issuer s Facilities Kona Gold leases a new state of the art corporate office that is located at 746 North Drive Suite A in the beautiful city of Melbourne, located on the east coast of central Florida. The Company s new corporate headquarters is 4,500 square feet of office and warehouse space allowing for personnel and product scaling as the company continues to grow. 8) Officers, Directors, and Control Persons A. Names of Officers, Directors, and Control Persons.

15 Robert Clark, CEO Robert Clark is the Chief Executive Office at Kona Gold Solutions, Inc., a publicly traded company focused on developing and marketing premium hemp and CBD products in the health, wellness, and fitness markets. Robert has held several leadership roles prior to taking over the CEO role of Kona Gold Solutions, Inc. Robert s background in product development and design, along with 12+ years of management experience allows him to have a great understanding of all levels within a company and successfully bring new products to market. Christopher Selinger, Vice President of Sales Christopher Selinger comes to Kona Gold with over 25 years of proven success in business operations and sales, with over 10 of those years being in the beverage industry. Mr. Selinger s most remarkable achievement was signing over 88 new distributors for a national beverage brand in the Southeast region in 36 months, which increased yearly territory case sales from 70,000 cases to over 1.1 million cases. B. Legal/Disciplinary History. Please identify whether any of the foregoing persons have, in the last five years, been the subject of: 1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses); N/A 2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person s involvement in any type of business, securities, commodities, or banking activities; N/A 3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or N/A 4. The entry of an order by a self-regulatory organization that permanently or temporarily barred suspended or otherwise limited such person s involvement in any type of business or securities activities. N/A C. Beneficial Shareholders. Persons owning more than ten percent (10%) of the issuer s securities as of the date issued: Robert Clark: 70,000,000 Restricted Common Shares

16 Robert Clark: 2,700,000 Preferred Series A Jason Ryan Fetzer: 1,300,000 Preferred Series A Robert Clark: 650,000 Preferred Series B Robert Clark: 500,000 Preferred Series D 9) Third Party Providers Legal Counsel Name: Firm: Address: Matthew McMurdo, Esq. McMurdo Law Group, LLC 1185 Avenue of the Americas 3rd Floor New York, NY Phone: (917) matt@nannaronelaw.com Accountant or Auditor Name: Firm: Address: Ben Borgers BF Borgers CPA PC 5400 West Cedar Avenue Lakewood, CO Phone: (303) ben@bfbcpa.us Management Discussion and Analysis On July 24, 2018 The Company announced its move into the state of Massachusetts by securing a new distribution partner in Marston Mills. The Marston Mills distributor will be distributing the Company s Kona Gold Hemp Energy Drinks and HighDrate CBD Energy Waters. This announcement comes on the heels of the Company s announcement of its new distribution partner in San Diego, California, who has pushed Kona Gold Hemp Energy Drinks into more than 30 retailers within their first 30 days of receiving product. On September 7, 2018 The Company announced the hiring of its new Vice President of Sales, Chris Selinger. Kona Gold s focus has been to build a top tier sales team and they have begun the process with bringing Mr. Selinger aboard to lead the Company s national sales efforts. Mr. Selinger comes to Kona Gold with over 25 years of proven success in business operations and sales, with over 10 of those years being in the beverage industry. Mr. Selinger s most remarkable achievement was signing over 88

17 new distributors for a national beverage brand in the Southeast region in 36 months, which increased yearly territory case sales from 70,000 cases to over 1.1 million cases On September 28, 2018 The Company announced it has entered into a distribution agreement with Southeast Beverage, Inc. Southeast Beverage is the first distribution partnered signed under Kona Gold s new V.P. of Sales, Chris Selinger, a strategic hire by the Company last month. Kona Gold is currently in negotiations with several additional distributors in the southeast United States and has additional meetings set in October with distribution partners in new key markets for the Company. Southeast Beverage, Inc is headquartered in Salisbury NC, with an additional distribution center located in Spartanburg SC. Southeast Beverage services over 1100 accounts in 25 counties throughout North and South Carolina. 10) Issuer Certification The issuer shall include certifications by the chief executive officer and chief financial officer of the issuer (or any other persons with different titles, but having the same responsibilities). The certifications shall follow the format below: I, Robert Clark certify that: 1. I have reviewed this Quarterly Disclosure Statement ending September 30, 2018 of Kona Gold Solutions, Inc.; 2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and 3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement. November 1, 2018 Robert Clark Chief Executive Officer Kona Gold Solutions, Inc.