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)
Nevada |
99-0367049 |
(State or other jurisdiction of incorporation or
organization) |
(I.R.S. Employer Identification No.)
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7730 E Greenway Road Ste. 203
Scottsdale, AZ
85260
(Address of Principal Executive Offices)(Zip Code)
2013 Equity Incentive Plan
(Full title of the
plan)
InCorp Services, Inc.
2360 Corporate Circle Ste.
400
Henderson, NV 89074-7722
(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, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange
Act.
Large accelerated filer [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ]
(Do not check if a smaller
reporting company) |
Smaller reporting company [X] |
CALCULATION OF REGISTRATION FEE
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Proposed |
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Proposed |
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maximum |
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maximum |
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Amount of |
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Title of securities to |
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Amount to be |
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offering price |
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aggregate
offering |
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registration |
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be registered |
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registered(1),(2) |
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per share(3) |
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price(3) |
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fee |
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Common Stock |
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15,000,000 |
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$ |
0.0845 |
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$ |
1,267,500 |
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$ |
147.28 |
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(1) |
An indeterminate number of additional shares of common
stock shall be issuable pursuant to Rule 416 under the Securities Act of
1933 to prevent dilution resulting from stock splits, stock dividends or
similar transactions and in such an event the number of shares registered
shall automatically be increased to cover the additional shares in
accordance with Rule 416. |
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(2) |
Consists of up to additional 15,000,000 shares of our
common stock issuable pursuant to our 2013 Equity Incentive. Our 2013
Equity Incentive Plan provides for the grant of awards covering a maximum
of 35,000,000 shares of our common stock, 20,000,000 of which have been
previously registered under a registration statement on Form S-8
(Registration No. 333-192601) filed on November 27, 2013. |
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(3) |
Estimated in accordance with Rule 457 (h) under the
Securities Act of 1933 solely for the purpose of computing the amount of
the registration fee, and based on the closing price per share ($0.0845)
for our common stock on December 4, 2014, as reported by OTC Markets
Groups OTCQB. |
EXPLANATORY NOTE
Effective as of October 31, 2014, our 2013 Equity Incentive
Plan was amended to increase the number of shares of common stock issuable under
the 2013 Equity Incentive Plan by 15,000,000 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 an additional 15,000,000 shares of our common stock that are
issuable pursuant to our 2013 Equity Incentive Plan. We have previously filed a
registration statement on Form S-8 (Registration No. 333-192601) to register
20,000,000 shares of our common stock that are issuable pursuant to our 2013
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. 333-192601) filed on
November 27, 2013, 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 2013 Equity Incentive Plan is to (a) enable
our company and any of our affiliates to attract and retain the types of
employees, consultants and directors who will contribute to our companys long
range success; (b) provide incentives that align the interests of employees,
consultants and directors with those of the stockholders of our company; and (c)
promote the success of our companys business. A total of 35,000,000 shares of
our stock are available for the grant of awards under the 2013 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 and performance compensation awards.
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. 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 combined Section 10(a) prospectus for our 2013 Equity Incentive Plan updates, among other things, certain information regarding our equity incentive plan, including the increase in the number of shares issuable under our equity incentive plan.
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 13,200,000 control securities (as such term is defined in Form S-8) issuable upon exercise of the stock options granted pursuant to our 2013 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.* |
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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 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
13,200,000 Shares
The Alkaline Water Company Inc.
Common Stock
_________________________________
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 13,200,000 shares of our common stock issuable upon
exercise of stock options. We granted the stock options to such selling
stockholders pursuant to our 2013 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 counsels applicable to the sale of their shares.
Our common stock is quoted on the OTC Markets Groups OTCQB
under the symbol WTER. On December 10, 2014, the closing price of our common
stock on the OTCQB was $0.066 per share.
_________________________________
Investing in our common stock involves risks. See Risk
Factors beginning on page 8.
_________________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
_________________________________
The date of this reoffer prospectus is December 10, 2014.
5
Table of Contents
6
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 Water Corp., and Alkaline Water
Corp.s wholly-owned subsidiary, Alkaline 88, LLC, unless otherwise specified.
All dollar amounts refer to U.S. dollars unless otherwise indicated.
Prospectus Summary
Our Business
Our company offers retail consumers bottled alkaline water in
three-liter and one-gallon and 700 ml volumes through our brand Alkaline88.
Our product is produced through an electrolysis process that uses specialized
electronic cells coated with a variety of rare earth minerals to produce our 8.8
pH drinking water without the use of any chemicals. Our product also
incorporates 84 trace Himalayan salts.
The main reason consumers drink our product is for the
perceived benefit that a proper pH balance helps fight disease and boosts the
immune system and the perception that alkaline water helps to maintain a proper
body pH and keeps cells young and hydrated.
Alkaline 88, LLC, our operating subsidiary, operates primarily
as a marketing and distribution company. Alkaline 88, LLC has entered into
exclusive arrangements with Water Engineering Solutions LLC, an entity that is
controlled and owned by our President, Chief Executive Officer, director and
major stockholder, Steven P. Nickolas, and our Vice-President, Secretary,
Treasurer and director, Richard A. Wright, for the manufacture and production of
our alkaline generating electrolysis system machines. Alkaline 88, LLC has
entered into one-year agreement(s) with, White Water, LLC, Brookshire's Grocery
Company and UNIX Packaging, Inc to act as our initial co-packers. Our branding
is being coordinated through 602 Design, LLC and our component materials are
readily available through multiple vendors. Our principal suppliers are
Plastipack Packaging and Polyplastics Co.
Sample production and testing of our product began in late
2012. We have currently established one contract manufacturing facility in
Phoenix, Arizona, one in Tyler, Texas and one in Montebello, California. We plan
to establish other key manufacturing facilities throughout the United States to
support the national distribution of our product.
Our product is currently at the introduction and expansion
phase of its lifecycle. In March 2012 Alkaline 88, LLC did market research on
the demand for a bulk alkaline product at the Natural Product Expo West in
Anaheim, California. In January 2013, we began the formal launching of our
product in Southern California and Arizona. Since then, we have begun to deliver
product through approximately 8,500 retail outlets throughout the United States.
We are presently in 49 States and the District of Columbia. Although over 40% of
our current sales are concentrated in the Southwest and Texas. We have
distribution agreements with large national distributors (UNFI, KeHe, Tree of
Life, Natures Best and C&S Distributors representing over 100,000 retail
establishments). Our current stores include convenience stores, natural food
products stores, large ethnic markets and national retailers. Currently, we sell
all of our products to our retailers through brokers and distributors. Our
larger retail clients bring the water in through their own warehouse
distribution network. Our current retail clients are made up of a variety of the
following; convenience stores, including 7-11s; large national retailers,
including Albertsons, Frys and Smiths (both Kroger companies), and regional
grocery chains such as Schnucks, Smart & Final and Jewel-Osco, Sprouts,
Bashas, Bristol Farms, Vallarta, Superior Foods, Brookshires and other
companies throughout the United States.
In April 2014 we entered into an exclusive territorial
distribution agreement with Kalil Bottling Co. on a new single serve 700ml
Bottle with a sport cap. This exclusivity is in Arizona and other areas in the
Southwestern United States. Kalil Bottling Co. is a direct to store distributor
(DSD) and we plan to expand the use of DSDs for our single serving packaging
through the remainder of 2014.
In order to continue our expansion, we anticipate that we will
be required, in most cases, to continue to give promotional deals throughout
2014 and in subsequent years on a quarterly basis ranging from a 5%-15% discount
similar to all other beverage company promotional programs. It has been our
experience that most of the retailers have requested some type of promotional
introductory program which has included either a $0.25 -$0.50 per unit discount
on an initial order; a buy one get one free program; or a free-fill program
which includes 1-2 cases of free product per store location. Slotting has only
been presented and negotiated in the larger national grocery chains and, in most
cases, is offset by product sales. Our slotting fees with our current national
retailers do not exceed $200,000 in the aggregate and are offset through product
sales. In addition we participate in promotional activities of our distributors,
these fees are not in excess of $200,000 and are offset through product
sales.
7
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, 2014, we had an accumulated deficit of $9,227,170.
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. In its report on our financial statements for the year
ended March 31, 2014, our independent registered public accounting firm included
an explanatory paragraph regarding substantial doubt about our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
The principal offices of our company are located at 7730 E
Greenway Road, Ste. 203, Scottsdale, AZ 85260. Our telephone number is (480)
656-2423.
The Offering
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 13,200,000 shares of our common stock issuable upon
exercise of stock options. We granted the stock options to such selling
stockholders pursuant to our 2013 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 10, 2014, there were 118,170,825 shares of our
common stock issued and outstanding and 20,000,000 shares of Series A Preferred
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
Because we have a limited operating history, our ability
to fully and successfully develop our business is unknown.
We were incorporated in June 6, 2011, and we have only recently
begun producing and distributing alkaline bottled water, and we have a limited
operating history from which investors can evaluate our business. Our ability to
successfully develop our products, and to realize consistent, meaningful
revenues and profit has not been established and cannot be assured. We have not
generated any significant revenues and do not expect to do so in the near
future. For us to achieve success, 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.
8
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 product. As a result, we may not
generate significant revenues in the future. Failure to generate significant
revenues in the near future may cause us to suspend or cease activities.
Our independent registered public accounting firm has
expressed 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, 2014, we had an
accumulated deficit of $9,227,170. 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. In its report on
the financial statements for the year ended March 31, 2014, our independent
registered public accounting firm included an explanatory paragraph regarding
substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
We will need additional funds to produce, market, and
distribute our product.
We will have to spend additional funds to produce, market and
distribute our product. If we cannot raise sufficient capital, we may have to
cease operations and you could lose your investment. We will need additional
funds to produce our product for distribution to our target market. Even after
we have produced our product, we will have 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 we are small and do not have much capital, we must
limit our product development, marketing, and sales activities. 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 and you may, therefore, lose
your entire investment.
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.
9
We compete generally with all liquid refreshments, including
bottled water and numerous specialty beverages, such as: SoBe; Snapple; Arizona;
Vitamin Water; Gatorade; and Powerade.
We compete indirectly with major international beverage
companies including but not limited to: the Coca-Cola Company; PepsiCo, Inc.;
Nestlé; Dr Pepper Snapple Group; Groupe Danone; Kraft Foods Group, Inc.; and
Unilever. These companies have established market presence in the United States,
and offer a variety of beverages that are substitutes to our product. 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;
Essentia; Icelandic; Real Water; Aqua Hydrate; Mountain Valley; Qure; Penta; 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 product, and to gain
sufficient market share in the United States 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 consumers 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 to allow our company to successfully market, distribute and
sell our product, or to successfully compete with current or future competition,
all of which may result in total loss of your investment.
Our growth and profitability depends on the performance
of third-parties and our relationship 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 to your investment. To distribute our product, we use a
broker-distributor-retailer network whereby brokers represent our products to
distributors and retailers who will in turn sell our product to consumers. The
success of this network will depend on the performance of the brokers,
distributors and retailers of this network. There is a risk that a broker,
distributor, or retailer may refuse to or cease to market or carry our product.
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 product in localities that may not be
receptive to our product. 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 product. 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 have 4 major customers that together account for 58% (17%,
16%, 13% and 12%, respectively) of accounts receivable at September 30, 2014,
and 3 customers that together account for 39% (15%, 13% and 11%, respectively)
of the total revenues earned for the six month period ended September 30, 2014.
There can be no assurance that such customers will continue to order our
products in 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.
10
Health benefits of alkaline water is not guaranteed or
proven, rather it is perceived by consumers.
Health benefits of alkaline water are not guaranteed and have
not been proven. 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.
Water scarcity and poor quality could negatively impact
our production costs and capacity.
Water is the main ingredient in our product. 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 Himalayan salts,
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, would 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 product 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.
Changes in laws and regulations relating to beverage
containers and packaging could increase our costs and reduce demand for our
products.
We and our bottlers intend to offer our product in
nonrefillable, recyclable containers in the United States. Legal requirements
have been enacted in various jurisdictions in the United States requiring that
deposits or certain ecotaxes or fees be charged for the sale, marketing and use
of certain nonrefillable beverage containers. Other proposals relating to
beverage container deposits, recycling, ecotax 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. If these types of requirements are
adopted and implemented on a large scale in the geographical regions in which we
operate or intend to operate, they could 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 product 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 product relating to the content or perceived adverse health consequences of
our product. If these types of requirements become applicable to our product
under current or future environmental or health laws or regulations, they may
inhibit sales of our product.
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 product 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 product in the United States
could reduce our profitability.
11
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 product and contribute to lower sales, which could have an adverse effect on
our results of operations for such periods.
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 product will be subject to:
the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the
Lanham Act; 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. Legal
requirements also apply in many jurisdictions in the United States requiring
that deposits or certain ecotaxes or fees be charged for the sale, marketing,
and use of certain non-refillable beverage containers. The precise requirements
imposed by these measures vary. Other types of statutes and regulations relating
to beverage container deposits, recycling, ecotaxes and/or product stewardship
also apply in various jurisdictions in the United States. We anticipate that
additional, similar legal requirements may be proposed or enacted in the future
at the local, state and federal levels in the United States. 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.
Our products are considered premium and healthy beverages
and are being sold at premium prices compared to our competitors; 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, Icelandic, Real Water, Aqua Hydrate, 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 $1.39 for a half-liter
bottle to approximately $2.99 for a one-liter bottle, and volumes ranging from
half-liter bottles to one-and-a half liter bottles. We currently offer our
product in a three-liter bottle for a suggested retail price (SRP) of $3.99 and
one-gallon bottle for an SRP of $4.99. Our competitors may introduce larger
sizes and offer them at an SRP that is lower than our product. We can provide no
assurances that consumers will continue to purchase our product or that they
will not prefer to purchase a competitive product.
We rely on key executive officers, and their knowledge of
our business would be difficult to replace.
We are highly dependent on our two executive officers, Steven
P. Nickolas and Richard A. Wright. We do not have key person life insurance
policies for any of our officers. The loss of management and industry expertise
of any of our key executive officers 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.
Our executive officers are not subject to supervision or
review by an independent board or audit committee.
Our board of directors consists of Steven P. Nickolas and
Richard A. Wright, our executive officers. Accordingly, we do not have any
independent directors. Also we do not have an independent audit committee. As a
result, the activities of our executive officers are not subject to the review
and scrutiny of an independent board of directors or audit committee.
12
Risk Related to Our Stock
Because Steven P. Nickolas controls a large percentage of
our voting stock, he has the ability to influence matters affecting our
stockholders.
Steven P. Nickolas, our President, Chief Executive Officer and
director, exercises voting and dispositive power with respect to 43,000,000
shares of our common stock, which are beneficially owned by WiN Investments, LLC
and Lifewater Industries, LLC, and owns 10,000,000 shares of Series A Preferred
Stock, which has 10 votes per share upon any matter submitted to our
stockholders for a vote. Accordingly, he controls a large percentage of the
votes attached to our outstanding voting securities. As a result, he has the
ability to influence matters affecting our stockholders, including the election
of our directors, the acquisition or disposition of our assets, and the future
issuance of our securities. Because he controls such large percentage of votes,
investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by Mr. Nickolas
could result in management making decisions that are in the best interest of Mr.
Nickolas and not in the best interest of the investors, you may lose some or all
of the value of your investment in our common 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 1,125,000,000 shares of common
stock and 100,000,000 shares of preferred stock, of which 118,170,825 shares of
common stock are issued and outstanding and 20,000,000 shares of Series A
Preferred Stock are issued and outstanding as of December 10, 2014. Our board of
directors has the authority to cause us to issue additional shares of 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 OTCQB may be volatile and sporadic, 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 quoted on the OTC Markets Groups OTCQB.
Trading in stock quoted on the OTCQB is often thin and characterized by 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.
Moreover, the OTCQB is not a stock exchange, and trading of securities on the
OTCQB is often more sporadic than the trading of securities listed on a national
securities exchange like the NASDAQ or the NYSE. Accordingly, stockholders may
have difficulty reselling any of our shares.
A decline in the price of our common stock could affect
our ability to raise further working capital, it may adversely impact our
ability to continue operations and we may go out of business.
A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. 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 our common stock could be
detrimental to our liquidity and our operations because the decline may cause
investors not to choose to invest in our stock. If we are unable to raise the
funds we require for all our planned operations, 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
not be successful and we may go out of business. We also might not be able to
meet our financial obligations if we cannot raise enough funds through the sale
of our equity securities and we may be forced to go out of business.
Because we do not intend to pay any cash dividends on our
shares of 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 the 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.
13
Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations, which may limit a stockholders
ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange
Commission (SEC) has adopted Rule 15g-9 which generally defines penny
stock to be any equity security that has a market price (as defined in Rule
15g-9) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC, which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules; the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.
In addition to the penny stock rules promulgated by the SEC,
the Financial Industry Regulatory Authority (FINRA) has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock.
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 companys or our industrys 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.
14
The Offering
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 13,200,000 shares of our common stock issuable upon
exercise of stock options. We granted the stock options to such selling
stockholders pursuant to our 2013 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 issuable upon exercise of the stock
options granted pursuant to our 2013 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 stockholders 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.
15
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) |
Steven P. Nickolas(4) |
48,400,000(5) |
6,600,000(6) |
41,800,000(7) |
33.5% |
Richard A. Wright(8) |
6,600,000(9) |
6,600,000(10) |
Nil |
* |
Totals |
55,000,000 |
13,200,000 |
41,800,000 |
33.5%
|
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 118,170,825 shares of our common stock issued
and outstanding as of December 10, 2014. 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) |
Effective as of May 31, 2013, Steven P. Nickolas was
appointed as chairman, president, chief executive officer, secretary and a
director of our company. On August 7, 2013, our board of directors
replaced Mr. Nickolas as secretary of our company with Richard A.
Wright. |
|
|
(5) |
Consists of 6,600,000 shares of our common stock subject
to vested stock options exercisable within 60 days, 21,500,000 shares of
our common stock owned by WiN Investments, LLC and 20,300,000 shares of
our common stock owned by Lifewater Industries, LLC. Steven P. Nickolas
exercises voting and dispositive power with respect to the shares of our
common stock that are beneficially owned by WiN Investments, LLC and
Lifewater Industries, LLC. Does not include 10,000,000 shares of Series A
Preferred Stock. The Series A Preferred Stock has 10 votes per share and
is not convertible into shares of our common stock. |
|
|
(6) |
Consists of 3,000,000 shares of our common stock issuable
at an exercise price of $0.15 per share until October 9, 2023 upon
exercise of the stock options granted pursuant to the stock option
agreement dated October 9, 2013 as amended October 31, 2014, 600,000
shares of our common stock issuable at an exercise price of $0.165 per
share until May 12, 2019 upon exercise of the stock options granted
pursuant to the stock option agreement dated May 12, 2014, and 3,000,000
shares of our common stock issuable at an exercise price of $0.1455 per
share until May 21, 2024 upon exercise of the stock options granted
pursuant to the stock option agreement dated May 21, 2014. We granted
these stock options pursuant to our 2013 Equity Incentive
Plan. |
16
(7) |
Consists of 21,500,000 shares of our common stock owned
by WiN Investments, LLC and 20,300,000 shares of our common stock owned by
Lifewater Industries, LLC. Steven P. Nickolas exercises voting and
dispositive power with respect to the shares of our common stock that are
beneficially owned by WiN Investments, LLC and Lifewater Industries, LLC.
Does not include 10,000,000 shares of Series A Preferred Stock. The Series
A Preferred Stock has 10 votes per share and is not convertible into
shares of our common stock. |
|
|
(8) |
Effective as of May 31, 2013, Richard A. Wright was
appointed as vice-president, treasurer and a director of our company. On
August 7, 2013, our board of directors appointed Mr. Wright as secretary
of our company. |
|
|
(9) |
Consists of 6,600,000 shares of our common stock subject
to vested stock options exercisable within 60 days. Does not include
10,000,000 shares of Series A Preferred Stock. The Series A Preferred
Stock has 10 votes per share and is not convertible into shares of our
common stock. |
|
|
(10) |
Consists of 3,000,000 shares of our common stock issuable
at an exercise price of $0.15 per share until October 9, 2023 upon
exercise of the stock options granted pursuant to the stock option
agreement dated October 9, 2013 as amended October 31, 2014, 600,000
shares of our common stock issuable at an exercise price of $0.165 per
share until May 12, 2019 upon exercise of the stock options granted
pursuant to the stock option agreement dated May 12, 2014, and 3,000,000
shares of our common stock issuable at an exercise price of $0.1455 per
share until May 21, 2024 upon exercise of the stock options granted
pursuant to the stock option agreement dated May 21, 2014. We granted
these stock options pursuant to our 2013 Equity Incentive
Plan. |
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 OTC Markets Groups OTCQB), 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:
1. |
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; |
|
|
2. |
purchases by broker or dealer as principal and resale by
the broker or dealer for its account pursuant to this reoffer
prospectus; |
|
|
3. |
an exchange distribution in accordance with the rules of
the applicable exchange or quotation system; |
|
|
4. |
ordinary brokerage transactions and transactions in which
the broker solicits purchasers; |
|
|
5. |
privately negotiated transactions; |
|
|
6. |
market sales (both long and short to the extent permitted
under the federal securities laws); |
|
|
7. |
at the market to or through market makers or into an
existing market for the shares; |
|
|
8. |
through transactions in options, swaps or other
derivatives (whether exchange listed or otherwise); |
|
|
9. |
a combination of any aforementioned methods of sale;
and |
|
|
10. |
Any other method permitted pursuant to applicable
law. |
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.
17
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 and Counsel
Our consolidated financial statements for the years ended March
31, 2014 and 2013 and for the period from inception on June 19, 2012 through
March 31, 2014 have been incorporated by reference in this reoffer prospectus
from our annual report on Form 10-K for the year ended March 31, 2014 filed with
the Securities and Exchange Commission on June 30, 2014 in reliance on the
report of Seale and Beers, CPAs, an independent registered public accounting
firm, which has also been incorporated by reference in this reoffer prospectus,
given on the authority of said firm as experts in auditing and accounting.
18
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, 2014 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 June 30,
2014; |
|
|
2. |
our quarterly reports on Form 10-Q filed on August 13,
2014 and November 14, 2014; |
|
|
3. |
our current reports on Form 8-K filed on May 6, 2014, May
14, 2014, May 23, 2014, June 6, 2014, July 1, 2014, August 21, 2014,
October 9, 2014, October 10, 2014 and November 4, 2014; and |
|
|
4. |
the description of our common stock contained in our
registration statement on Form 8-A filed on October 25, 2013, 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., 7730 E Greenway Road Ste. 203, Scottsdale, Arizona 85260,
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.
19
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
Commissions website at http://www.sec.gov. The public may also read and copy
any materials we file with the Securities and Exchange Commission at its public
reference room at 100 F Street, N.E. Washington, D.C. 20549. The public may
obtain information on the operation of the public reference room by calling the
Securities and Exchange Commission at 1-800-SEC-0330.
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.
20
13,200,000 Shares
The Alkaline Water Company Inc.
Common Stock
_________________________________
Reoffer Prospectus
_________________________________
December 10, 2014
21
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 June 30,
2014; |
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2. |
our quarterly reports on Form 10-Q filed on August 13,
2014 and November 14, 2014; |
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3. |
our current reports on Form 8-K filed on May 6, 2014, May
14, 2014, May 23, 2014, June 6, 2014, July 1, 2014, August 21, 2014,
October 9, 2014, October 10, 2014 and November 4, 2014; and |
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4. |
the description of our common stock contained in our
registration statement on Form 8-A filed on October 25, 2013, 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.
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Not applicable.
Item 5. |
Interests of Named Experts and Counsel.
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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 or she acted in good
faith and in a manner which he or she 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 or
her conduct was unlawful; |
22
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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 or she 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 or her in
connection with the defense or settlement of the action or suit if he or
she acted in good faith and in a manner which he or she 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 or her against
expenses, including attorneys fees, actually and reasonably incurred by
him or her 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 not purchased such insurance.
Item 7. |
Exemption from Registration Claimed.
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Not applicable.
23
Exhibit |
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Number |
Description |
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(4) |
Instruments Defining the Rights of Security Holders,
including Indentures |
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4.1 |
Articles of Incorporation (incorporated by reference from
our Form S-1 Registration Statement, filed on October 28, 2011) |
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4.2 |
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 |
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 |
Certificate of Amendment (incorporated by reference from
our Current Report on Form 8-K, filed on October 11, 2013) |
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4.5 |
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 |
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 |
Amended and Restated Bylaws (incorporated by reference
from our Current Report on Form 8-K, filed on March 15, 2013) |
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4.8 |
2013 Equity Incentive Plan (incorporated by reference
from our Current Report on Form 8-K, filed on November 4, 2014) |
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4.9 |
Stock Option Agreement dated October 9, 2013 with Steven
P. Nickolas (incorporated by reference from our Quarterly Report on Form
10-Q, filed on November 13, 2013) |
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4.10 |
Stock Option Agreement dated October 9, 2013 with Richard
A. Wright (incorporated by reference from our Quarterly Report on Form
10-Q, filed on November 13, 2013) |
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4.11 |
Stock Option Agreement dated May 12, 2014 with Steven P.
Nickolas (incorporated by reference from our Current Report on Form 8-K,
filed on May 14, 2014) |
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4.12 |
Stock Option Agreement dated May 12, 2014 with Richard A.
Wright (incorporated by reference from our Current Report on Form 8-K,
filed on May 14, 2014) |
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4.13 |
Stock Option Agreement dated May 21, 2014 with Steven P.
Nickolas (incorporated by reference from our Current Report on Form 8-K,
filed on May 23, 2014) |
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4.14 |
Stock Option Agreement dated May 21, 2014 with Richard A.
Wright (incorporated by reference from our Current Report on Form 8-K,
filed on May 23, 2014) |
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4.15 |
Form of Amending Agreement to Stock Option Agreement
(incorporated by reference from our Current Report on Form 8-K, filed on
May 23, 2014) |
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(5) |
Opinion regarding Legality |
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5.1* |
Opinion of Clark Wilson LLP regarding the legality of the securities being registered |
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(23) |
Consents of Experts and Counsel
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24
*Filed herewith.
25
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 registrants 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 plans 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.
26
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 10, 2014.
The Alkaline Water Company Inc.
By:
/s/ Steven P. Nickolas
Steven P. Nickolas
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/ Steven P. Nickolas
Steven P. Nickolas
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: December 10, 2014
/s/ Richard A. Wright
Richard A. Wright
Vice-President, Secretary, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer)
Date: December 10, 2014
27
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Clark Wilson LLP |
Barristers & Solicitors |
Patent & Trade-mark Agents |
Our File No. |
40610-0001 / CW7447831.1 |
900-885 W Georgia Street |
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Vancouver, BC V6C 3H1 |
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Tel.
604.687.5700 |
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Fax
604.687.6314 |
December 10, 2014
The Alkaline Water Company Inc.
7730 E Greenway Road Ste. 203
Scottsdale, AZ 85260
U.S.A.
Dear Sirs:
Re: |
The Alkaline Water Company Inc. –
Registration Statement on Form S-8 |
We are counsel to The Alkaline Water Company Inc. (the “Company”), a corporation incorporated under the laws of the State of Nevada. In such capacity, we have assisted in the preparation of the Company’s registration statement on Form S-8 (the “Registration Statement”) in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 15,000,000 shares (the “Registered Shares”) of common stock of the Company issuable pursuant to the Company’s 2013 Equity Incentive Plan (the “Plan”).
We have examined originals or copies, certified or otherwise identified to our satisfaction of the resolutions of the directors of the Company with respect to the matters herein. We have also examined such statutes and public and corporate records of the Company, and have considered such questions of law as we have deemed relevant and necessary as a basis for the opinion expressed herein. We have, for the purposes of this opinion, assumed the genuineness of all signatures examined by us, the authenticity of all documents and records submitted to us as originals and the conformity to all original documents of all documents submitted to us as certified, photostatic or facsimile copies. As to all questions of fact material to this opinion which have not been independently established, we have relied upon the statements or a certificate of an officer of the Company.
Based upon the foregoing and the examination of such legal authorities as we have deemed relevant, and subject to the qualifications and further assumptions set forth herein, we are of the opinion that the Registered Shares will be, when issued pursuant to the terms of the Plan and any award agreement entered into pursuant to the Plan, duly and validly authorized and issued as fully paid and non-assessable shares in the capital of the Company.
This opinion letter is opining upon and is limited to the current federal laws of the United States and Nevada law including the statutory provisions, all applicable provisions of the Nevada constitution and reported judicial decisions interpreting those laws, as such laws presently exist and to the facts as they presently exist. We express no opinion with respect to the effect or applicability of the laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion letter should the laws of such jurisdiction be changed after the date hereof by legislative action, judicial decision or otherwise.
www.cwilson.com
- 2 -
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or rules and regulations of the Securities and Exchange Commission.
Yours truly,
/s/ Clark Wilson LLP
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference, in this registration statement on Form S-8 of The Alkaline Water Company Inc., of our report dated June 30, 2014 on our audit of the financial statements of The Alkaline Water Company Inc. as of March 31, 2014, and the related statements of operations, stockholders’ equity and cash flows for the year ended March 31, 2014 and from inception on June 19, 2012 through March 31, 2014, which appears in the annual report on Form 10-K of The Alkaline Water Company Inc. for the fiscal year ended March 31, 2014 and the reference to us under the caption “Experts and Counsel.”
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
December 10, 2014
Seale and Beers, CPAs |
PCAOB & CPAB Registered Auditors |
50 S. Jones Blvd, Suite 201 - Las Vegas, NV 89107 |
Phone: (888)727-8251 Fax: (888)782-2351 |
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