As filed with the Securities and Exchange Commission on November 29, 2021

 

Registration No. 333-_______

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT
Under
The Securities Act of 1933

 

Iconic Brands, Inc.

(Exact name of Registrant as specified in its charter)

 

Nevada

 

5180

 

13-4362274

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(IRS Employer
Identification No.)

 

44 Seabro Avenue

Amityville, New York 11701

(631) 464-4050

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

Larry Romer

Chief Executive Officer

44 Seabro Avenue

Amityville, NY 11701

(631) 464-4050

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Please send copies of all communications to:

 

Eric M. Hellige, Esq.
Pryor Cashman LLP
7 Times Square
New York, NY 10036
(212) 421-4100

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

 

  

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered

 

Amount to be
Registered(1)

 

 

Proposed
Maximum
Offering
Price Per
Security(1)(2)

 

 

Proposed
Maximum
Aggregate
Offering Price

 

 

Amount of
Registration
Fee(2)

 

Common stock, $0.001 par value per share

 

 

128,995,031

 

 

$ 0.75

 

 

$ 96,746,273.25

 

 

$ 8,968.38

 

    

(1)

Represents the initial maximum number of shares offered by the selling stockholders named in this Registration Statement. Pursuant to Rule 416 under the Securities Act of 1933, as amended, this registration statement shall be deemed to cover additional securities of the same class as the securities covered by this registration statement issued or issuable prior to completion of the distribution of the securities covered by this registration statement as a result of a split of, or a stock dividend on, the registered securities.

 

(2)

Estimated solely for the purpose of computing the registration fee. Pursuant to Rule 457(c) under the Securities Act of 1933, as amended, the proposed maximum offering price per share is based on the average of the high and low sale prices of the registrant’s common stock on the OTCQB market on November 22, 2021.

   

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

 

 

 

 

The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION

 

DATED NOVEMBER 29, 2021

 

128,995,031 Shares of Common Stock underlying Warrants

 

ICNB_S1IMG1.JPG

 

Iconic Brands, Inc.

 

This prospectus relates to the resale, from time to time, by the selling stockholders named herein (the “Selling Stockholders”) of an aggregate of 128,995,031 shares of common stock, par value $0.001 per share, issuable upon exercise of certain outstanding warrants to purchase 87,643,130 shares of common stock and unissued warrants to purchase 41,351,901 shares of common stock  (collectively, the “Warrants”).

 

We are not selling any securities under this prospectus and we will not receive proceeds from the sale of the common stock by the Selling Stockholders. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current applicable exercise price with respect to all of the 128,995,031 shares of common stock, would result in gross proceeds to us of approximately $40,300,000.

 

We will pay the expenses of registering the shares of common stock offered by this prospectus, but all selling and other expenses incurred by the Selling Stockholders will be paid by the Selling Stockholders. The Selling Stockholders may sell our shares of common stock offered by this prospectus from time to time on terms to be determined at the time of sale through ordinary brokerage transactions or through any other means described in this prospectus under “Plan of Distribution.” The prices at which the Selling Stockholders may sell shares of common stock will be determined by the prevailing market price for our common stock or in negotiated transactions.

 

Our common stock is quoted on the OTCQB markets, under the symbol “ICNB.” On November 24, 2021, the last reported sale price for our common stock was $0.80.

  

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

 

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 prospectus is                        , 2021.

 

 

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS

1

 

 

PROSPECTUS SUMMARY

2

 

 

RISK FACTORS

8

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

18

 

 

USE OF PROCEEDS

20

 

 

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

20

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

21

 

 

BUSINESS

33

 

 

DIRECTORS AND EXECUTIVE OFFICERS

41

 

 

EXECUTIVE COMPENSATION

43

 

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

46

 

 

ISSUANCE OF SECURITIES TO SELLING STOCKHOLDERS

47

 

 

PRINCIPAL STOCKHOLDERS

48

 

 

DESCRIPTION OF SECURITIES

49

 

 

SELLING STOCKHOLDERS

52

 

 

PLAN OF DISTRIBUTION

56

 

 

LEGAL MATTERS

57

 

 

EXPERTS

57

 

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION

58

   

 
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ABOUT THIS PROSPECTUS

 

The registration statement of which this prospectus forms a part that we have filed with the Securities and Exchange Commission, or SEC, includes exhibits that provide more detail of the matters discussed in this prospectus.

 

You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the heading “Where You Can Find Additional Information.”

 

You should rely only on the information contained in this prospectus. Neither we nor the Selling Stockholders have authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus. This prospectus is an offer to sell only the securities offered hereby but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. Our business, financial condition, results of operations and prospects may have changed since that date.

 

The Selling Stockholders are not offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. Neither we nor the Selling Stockholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the jurisdiction of the United States who come into possession of this prospectus are required to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus applicable to that jurisdiction.

 

This prospectus is part of a registration statement on Form S-1 that we filed with the SEC under which the Selling Stockholders may offer from time to time up to an aggregate of 128,995,031 shares of common stock in one or more offerings. If required, each time the Selling Stockholders offer shares of Common Stock, we will provide you with, in addition to this prospectus, a prospectus supplement that will contain specific information about the terms of that offering. We may also use a prospectus supplement to add, update or change any of the information contained in this prospectus. This prospectus, together with any applicable prospectus supplements, includes all material information relating to this offering. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. Please carefully read both this prospectus and any prospectus supplement before buying any of the shares of common stock offered.

 

Unless the context otherwise requires, the terms “ our company,” “Company, ”“we,” “us” and “our” refer to Iconic Brands, Inc. and its subsidiaries.

 

All service marks, trademarks and trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ®, © and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

 

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

 

 
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PROSPECTUS SUMMARY

 

This summary highlights principal features of this offering and certain information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. You should read this entire prospectus carefully, including the information incorporated by reference herein, before making an investment decision.

 

Our Company

 

Overview

 

We are a lifestyle branding company with expertise in developing, from inception to completion, and branding alcoholic beverages for ourselves and third parties. We market and place products into national distribution through long-standing industry relationships. We believe we are a leader in “Celebrity Branding” of beverages in which we procure superior and unique products from around the world and brand such products with internationally-recognized celebrities. We currently market and sell the following products:

 

 

 

 

·

Bellissima Prosecco – these products comprise a line of all-natural and Vegan Prosecco and Sparkling Wine made with organic grapes, including a Zero Sugar, Zero Carb option, a DOC Brut and a Sparkling Rose. The Bellissima line of Prosecco and Sparkling Wines includes two new flavor profiles, a Zero Sugar/Zero Carb Sparkling Rose and a Rose Prosecco; and

 

 

 

 

·

Bella Sprizz Apertifs - these products comprise a line of aperitifs consisting of three different expressions, a classic Italian aperitif, an all-natural elderflower aperitif and a classic Italian bitter.

 

 

 

In addition, we also develop and market private label spirits for established domestic and international chains.

  

As a result of our July 2021 acquisition of 100% of the equity of TopPop LLC (“TopPop”), we now have a fully, vertically-integrated company for alcohol brands. TopPop is a premier product development, contract manufacturing and packaging company that specializes in flexible packaging applications in the food, beverage and health categories. TopPop has the federal and state licenses necessary to manufacture and blend malt, wine and spirits-based products and, in June 2020, it opened a 27,000-square-foot FDA-approved manufacturing facility in Marlton, New Jersey with a Safe Quality Food certification. In September 2021, TopPop leased an additional 65,000 square feet for manufacturing in Pennsauken, New Jersey. Construction is currently ongoing, and the facility is expected to be operational by January 1, 2022. The facility will include approximately $4 million of high-speed packaging equipment and is expected to increase our production capacity by three times.

   

For its first product line, TopPop identified the single serve, ready-to-drink (“RTD”) and ready-to-freeze (“RTF”) segments as ripe for product and packaging innovation. TopPop introduced an alcohol-infused ice pop in June 2020, and successfully marketed the concept to major alcohol companies. In addition, it developed its own product line trademarked under the name BoozyPopz® which will be sold through e-commerce platforms and directly to sports and entertainment venues. Despite launching during the COVID-19 pandemic, TopPop manufactured approximately 10 million ice pops from the launch in June through December 31, 2020. It has produced approximately 36 million ice pops during the nine-month period ending September 30, 2021. TopPop has also developed a robust pipeline in the single serve, RTD alcohol cocktail market and anticipates launching a line of products in this market in 2022. TopPop designs and markets flexible packaging for its RTD and RTF products with formulations that are low calorie and contain healthy and natural ingredients. With the opening of TopPop’s new facility expected in January 2022, we expect to have the capacity to manufacture over 150 million units in 2022.

 

We believe TopPop brings to us additional synergies and opportunities for cross-promoting new and existing products to a broader customer base and positions our company, including our wholly owned subsidiary TopPop, as a company that establishes and supports brands, innovates, produces, licenses, packages and sells alcohol and non-alcohol beverages and creates sustainable packaging solutions to the consumable goods market. Our focus on lifestyle branding and the rising “Better-for-You”, “Better-for-Planet” consumer category has made us a leader in developing celebrity brands worldwide such as our Bellissima Prosecco by Christie Brinkley. TopPop is a pioneer in flexible packaging. The company’s creative solutions from inception to full scale production, like its RTF alcohol ice pops, make it a harbinger in the “pouch market”, one of the fastest growing segments of the beverage industry. TopPop’s proprietary and visionary applications has made the company a leader in providing these increasingly desirable products and services, from “design through delivery”, to some of the largest Fortune 500 and multinational alcohol beverage companies and brands today.

 

Our mission is to be an industry leader in the brand development, marketing and sales of alcoholic beverages and related products by capitalizing on our ability to procure products from around the world and to develop unique and innovative packaging to create brand and product line extensions. We plan to leverage our relationships with internationally-recognized celebrities and social media influencers to add value to products and create brand awareness in unbranded niche categories.

      

 
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Recent Developments

 

COVID-19

 

As a result of COVID-19, we have seen a shift away from the traditional brick-and-mortar business to a direct-to-consumer business. Although we expect brick-and-mortar to rebound, we also expect the director-to-consumer model to stay post-COVID-19, as consumers embrace the convenience of having their alcoholic beverages delivered to their doorstep. As we expand our relationship with QVC and our own direct-to-consumer platform through our website, we believe we are well positioned to execute on this opportunity.

 

TopPop Acquisition

 

On July 26, 2021, we completed the acquisition of TopPop. In connection with such acquisition, the former TopPop members received, in the aggregate: (a) $3,995,551 in cash by transfer of immediately available funds, (b) 26,009,600 shares of our common stock,which shares were valued in the aggregate at $8,128,000, or $0.3125 per share, (c) $4,900,000.00 aggregate principal amount of our promissory notes and (d) future additional cash payments as earnout consideration. The earn-out payments, if any, will be made (i) following the 12-month period commencing on August 1, 2021, in an aggregate amount equal to the excess, if any, of: (A) 1.96 times TopPop’s EBITDA for the period over (B) the aggregate amount of the closing promissory notes repaid in cash during period; provided, however, no such amount shall be payable if (i)(A) does not exceed (i)(B); and (ii) following the 12-month period commencing on August 1, 2022, in an aggregate amount equal to the excess, if any, of: (A) 1.96 times TopPop’s EBITDA for such period over (B) the aggregate amount of the closing promissory notes repaid in cash during the period; provided, however, no such amount shall be payable if (ii)(A) does not exceed (ii)(B). The earn-out payments will be made, at the election of each former TopPop member, in cash or in shares of our common stock or a combination thereof, less any reserve for possible indemnification payments, provided that not less than 45% of the value of each earn-out payment shall be paid in common stock. If paid in shares of common stock, such shares shall be valued at the then-prevailing market rate.

 

Series A-2 Convertible Preferred Stock Financing

 

On July 26, 2021, we entered into securities purchase agreements dated as of July 26, 2021 with certain accredited investors for the sale of an aggregate of 32,303.11 shares of our newly-created Series A-2 Convertible Preferred Stock, par value $0.001 per share (the “Series A-2 Preferred Stock”), an aggregate of 11,320,201 shares of common stock, and warrants (the “Warrants”) to purchase an aggregate of 114,690,150 shares of common stock, for gross proceeds of $35,840,672, before deducting placement agent and other offering expenses. Pursuant to the purchase agreements, the shares of Series A-2 Preferred Stock, common stock and Warrants were sold in two tranches, the first of which closed on July 26, 2021 for gross proceeds of $22,918,203 for the sale of an aggregate of 20,724.70 shares of Series A-2 Preferred Stock, an aggregate of 7,019,196 shares of common stock, and Warrants to purchase an aggregate of 73,338,203 shares of common stock. Of the $22,918,203 gross proceeds we received upon the closing of the first tranche, $18,147,354 was paid in cash, $676,708 was paid by assignment to us of $676,708 aggregate principal amount, and accrued interest, of our outstanding original issue discount promissory notes and $3,762,000 was paid by assignment to us of $3,762,000 aggregate principal amount of TopPop’s outstanding original issue discount promissory notes, all of which notes were cancelled by us. A $332,141 discount was applied to the cash component of the purchase price received upon the closing of the first tranche.

 

Pursuant to the purchase agreements, the closing of the second tranche, which will include the sale of an additional 11,578.40 shares of Series A Preferred Stock, 4,301,005 shares of common stock, and Warrants to purchase an additional 41,351,901 shares of common stock for gross proceeds of $12,690,901, all of which will be paid in cash, will occur within five trading days of the date of this prospectus. The closing of the transactions contemplated by the purchase agreements were subject to the satisfaction of certain closing conditions, including the execution of the Registration Rights Agreement (as defined below), and the consummation of the transactions contemplated by the TopPop acquisition agreement, the Exchange Agreement (as defined below), and the United Purchase Agreement (as defined below).

  

 
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The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.3125 per share. The Warrants may be exercised on a cashless basis if the shares of common stock underlying the Warrants are not then registered for resale pursuant to an effective registration statement under the Securities Act, including the registration statement of which this prospectus forms a part.

 

In connection with this offering, we entered into a Placement Agency Agreement with Dawson James Securities, Inc. (the “Placement Agent”), pursuant to which at the closing of the first tranche under the purchase agreements we paid to the Placement Agent a cash fee in the amount of $2,350,000 and we agreed to pay to the Placement Agent in connection with the closing of the second tranche under the purchase agreements a cash fee in the amount of $1,150,000. In addition, we agreed to pay to the Placement Agent a fee in connection with any cash exercise of any of the Warrants in an amount equal to 10% of the cash amount received by us upon any such exercise. Pursuant to the Placement Agency Agreement, as additional consideration for the services of the Placement Agent, we also issued to the Placement Agent or its designees in connection with the closing of the first tranche under the purchase agreements 2,194 shares of Series A-2 Preferred Stock and agreed to issue to the Placement Agent or its designees in connection with the closing of the second tranche under the purchase agreements an additional 1,096 shares of Series A-2 Preferred Stock.

 

Exchange of Issued and Outstanding Series E, F and G Convertible Preferred Stock and Series E, F and G Common Stock Purchase Warrants

 

On July 26, 2021, we entered into securities exchange agreements with the holders of our outstanding (a) Series E Convertible Preferred Stock, Series F Convertible Preferred Stock and Series G Convertible Preferred Stock (the “Existing Preferred Stock”), and (b) Series E Common Stock Purchase Warrants, Series F Common Stock Purchase Warrants and Series G Common Stock Purchase Warrants (the “Existing Warrants” and together with the Existing Preferred Stock, collectively, the “Existing Securities”), pursuant to which such holders exchanged (i) all Existing Preferred Stock held by each holder for shares of Series A-2 Preferred Stock and Warrants, and (ii) all Existing Warrants held by each holder for shares of common stock. In connection with such exchange, the holders exchanged all of their Existing Securities for an aggregate of 3,704.80 shares of Series A-2 Preferred Stock, Warrants to purchase an aggregate of 14,304,880 shares of common stock, and 2,449,517 shares of common stock. Upon such exchange, the Existing Securities were cancelled and all contractual (or similar) rights, preferences and obligations relating to such Existing Securities became null and void and of no further effect whatsoever.

 

Redemption of Series F Convertible Preferred Stock

 

On July 26, 2021, we entered into redemption agreements with the former holders of our Series F Convertible Preferred Stock, pursuant to which we redeemed all outstanding shares of our Series F Convertible Preferred Stock for an aggregate purchase price of $225,000 in accordance with the terms of such redemption agreements.

 

Exchange of Issued and Outstanding Series A Preferred Stock

 

On July 26, 2021, we entered into a securities exchange agreement dated as of July 26, 2021 with Richard DeCicco, who, at the time of execution and delivery of such agreement, was our Chief Executive Officer, Chief Financial Officer, chairman of our board of directors and the holder of our one issued and outstanding share of Series A Preferred Stock, and is currently our Chairman of the Board and President. Pursuant to such agreement, Mr. DeCicco exchanged his one share of Series A Preferred Stock for 25,600,000 shares of our common stock. Upon such exchange, the Series A Preferred Stock, which previously gave Mr. DeCicco two votes for every one vote of our outstanding voting securities, was cancelled and all contractual (or similar) rights, preferences and obligations relating to such Series A Preferred Stock became null and void and of no further effect whatsoever.

  

 
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Purchase of all Issued and Outstanding Capital Stock of United Spirits, Inc.

 

On July 26, 2021, we entered into a securities purchase agreement with Mr. DeCicco pursuant to which we purchased from Mr. DeCicco all of the issued and outstanding capital stock of United Spirits, Inc., a New York corporation (“United”). Pursuant to such purchase agreement, Mr. DeCicco transferred to us 100% of the issued and outstanding capital stock of United in exchange for a purchase price of $1,000,000. The purchase agreement contains customary representations, warranties and covenants of the parties thereto, and the closing of the transactions contemplated by such purchase agreement was subject to the satisfaction of certain closing conditions, including, without limitation, certain approvals from various state liquor authorities. Prior to the closing of such transaction, we marketed and sold our wine and spirts products pursuant to an exclusive marketing and distribution agreement between United and us.

 

Amended and Restated LLC Agreements of Bellissima Spirits LLC and BiVi LLC

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Rosanne Faltings, our vice president of sales and a member of the Board, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of Bellissima. Such agreement provides that the manager of Bellissima, currently Mr. DeCicco, may cause Bellissima to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause Bellissima to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in Bellissima are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Ms. Faltings, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of BiVi. Such agreement provides that the manager of BiVi, currently Mr. DeCicco, may cause BiVi to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause BiVi to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in BiVi are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

 

Risks Associated With Our Business

 

Our ability to execute our business strategy is subject to numerous risks, as more fully described in the section captioned “Risk Factors” immediately following this prospectus summary. You should read these risks before you invest in our common stock. In particular, risks associated with our business include, but are not limited to, the following:

 

 

 

 

·

We face significant risks relating to our recent acquisition of TopPop.

 

 

 

 

·

We have a history of losses, and may not achieve or maintain profitability in the future.

 

 

 

 

·

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

 

 
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·

If we fail to obtain the capital necessary to fund our operations, we will be unable to continue our operations and you will likely lose your entire investment.

 

 

 

 

·

Any additional funding that we raise may be on terms that are dilutive to you.

 

 

 

 

·

Widespread health developments, including the recent global COVID-19 pandemic, could materially and adversely affect our business, financial condition and results of operations.

 

 

 

 

·

We face risks related to our inventory, and if we fail to accurately predict demand for products, we may face write-downs or other charges.

 

 

 

 

·

Disruptions in our supply chain could have a substantial adverse impact on our ability to produce our wines and the cost of our raw materials.

 

 

 

 

·

Contamination and degradation of product quality from diseases, pests and weather conditions may have a material adverse effect on our business and results of operation.

 

 

 

 

·

Climate change and environmental regulatory compliance may have an adverse effect on our operations.

 

 

 

 

·

A potential decline in the consumption of the products we sell could have a material adverse effect on our business.

 

 

 

 

·

We face significant competition which could adversely affect our business.

 

 

 

 

·

Our business depends on the effectiveness of our advertising and marketing programs, including the strength of our social media presence, to attract and retain members and subscribers.

 

 

 

 

·

The loss of one or more of our current customers could adversely affect our results of operations.

 

 

 

 

·

Any changes to our relation with QVC or retail outlets may have a material adverse effect on our business.

 

 

 

 

·

We may engage in strategic transactions that fail to enhance shareholder value.

 

 

 

 

·

We may not be successful in hiring and retaining key employees, including executive officers.

 

 

 

 

·

Our operations may be adversely affected by our failure to maintain or renegotiate distribution, supply, manufacturing or license agreements on favorable terms.

 

 

 

 

·

Class action or other litigation relating to alcohol abuse or the misuse of alcohol could adversely affect our business.

 

 

 

 

·

Regulatory decisions and changes in the legal, and regulatory environment could increase our costs and liabilities or limit our business activities.

 

 

 

 

·

We are subject to cybersecurity risks.

 

 

 

Corporate Information

 

Our corporate headquarters are located in Amityville, NY. Our mailing address is 44 Seabro Avenue, Amityville, NY 11701, and our telephone number is (631) 464-4050. We file electronically with the SEC our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We make available on our website at www.iconicbrandsusa.com., free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC. Information contained on our website is not incorporated into, and does not constitute any part of, this prospectus. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

       

 
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The Offering

 

 

 

 

 

 

Securities offered by the Selling Stockholders:

 

128,995,031 shares of common stock issuable upon the exercise of warrants to purchase shares of Common Stock (the “Warrants”).

 

 

 

 

 

 

Common stock outstanding prior the offering:

 

89,032,764 shares (as of September 30, 2021)

 

 

 

 

 

 

Common stock to be outstanding after the offering assuming exercise of all Warrants:

 

222,508,799 shares

 

 

 

 

 

 

Use of Proceeds:

 

We will not receive any proceeds from the sale by the Selling Stockholders of the shares of common stock being offered by this prospectus.

 

 

 

 

 

 

Risk Factors:

 

Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section on page 8 before deciding to invest in our securities.

 

 

 

 

 

Trading Symbol:

 

Our common stock is currently quoted on OTCQB market under the trading symbol “ICNB”.

 

 

 

 

 

 

The 222,508,799 shares of common stock to be outstanding after this offering is based on 89,032,764 shares of common stock outstanding as of September 30, 2021, 4,481,004 additional shares that have been issued since September 30, 2021 or will be issued to the Selling Stockholders at the closing of the second tranche under the purchase agreements, which will occur within five days of the date of this prospectus, and the shares of common stock issuable upon exercise of the Warrants, including the Warrants to be issued upon the closing of the second tranche under the purchase agreements.

  

The 222,508,799 shares of common stock to be outstanding after this offering excludes an aggregate of up to approximately 140,706,10 shares of common stock based upon the following:

 

 

 

 

 

 

 

 

 

·

An aggregate of 125,753,312 shares of common stock issuable upon the conversion of Series A-2 Preferred Stock, including shares of Series A-2 Preferred Stock issued to the Selling Stockholders upon the closing of the second tranche under the purchase agreements;

 

 

 

 

 

 

 

 

 

·

An aggregate of 7,408,200 shares of common stock issuable upon the exercise of options with exercise prices of $0.45 and $0.57 per share granted under our 2021 Long-Term Incentive Plan; and

 

 

 

 

 

 

 

·

An aggregate of 7,545,198 shares of common stock issuable to the holders of our Series A-2 Preferred Stock, as a one-time dividend payment equal to $1,000 per share of the outstanding Series A-2 Preferred Stock, in cash or, at our option, in shares of common stock, or a combination thereof, subject to the potential adjustment in the event that the average of the volume weighted average price per share of our common stock for each of the 15 consecutive trading days ending on the trading day immediately prior to July 1, 2022 is less than the conversion price then in effect.

 

 

 

 

 

 

 

            

 
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RISK FACTORS

 

An investment in our common stock involves a number of risks. Before deciding to invest in our common stock, you should carefully consider the risks described below, and in any prospectus supplement that we have authorized for use in connection with this offering. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. The risks described in the documents referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business.

 

Risk Factors Related to the Business of the Company

 

We face significant risks relating to our recent acquisition.

 

Our recent acquisition of TopPop involves a number of significant risks and uncertainties that may adversely affect us, including the following:

 

 

·

our inability to realize anticipated synergies or other expected benefits or cost savings;

 

 

 

 

·

the diversion of financial resources to the new operations or acquired businesses;

 

 

 

 

·

our failure to successfully integrate acquired systems, business processes, policies and procedures;

 

 

 

 

·

our exposure to unknown liabilities and unforeseen costs that were not discovered during due diligence;

 

 

 

 

·

the potential loss of key employees, suppliers or customers;

 

 

 

·

potential delays in the opening of the new TopPop manufacturing facility due to regulatory and equipment factors, such as late issuance by the State of New Jersey of alcohol manufacturing and licensing approvals or supply chain delays in the delivery of new capital equipment; and

 

 

 

 

·

other challenges associated with managing the larger, more complex and integrated combined businesses.

 

If one or more of these risks and uncertainties were to materialize, we could experience reduced sales, higher costs, lower profitability and other adverse impacts to our operations and businesses.

 

We have a history of losses, and may not achieve or maintain profitability in the future.

 

We have a history of losses and have historically raised capital to meet our needs. Our net losses for the nine-month periods ended September 30, 2021 and 2020 and the years ended December 31, 2020 and 2019 were $6,000,537, $2,608,729, $3,571,602 and $3,953,911, respectively, and our accumulated deficit as of September 30, 2021 was $32,497,887. We may sustain losses in the future as we continue to implement our business plan, and there can be no assurance that we will ever generate sufficient revenues to maintain profitability in the future.

  

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

 

Our financial statements as of and for the year ended December 31, 2020 have been prepared under the assumption that we will continue as a going concern for the next twelve months. Our independent registered public accounting firm included in its opinion for the year ended December 31, 2020 an explanatory paragraph referring to our recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, reduce expenditures and to generate significant revenue. Our financial statements as of and for the year ended December 31, 2020 did not include any adjustments that might result from the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by our auditors, and our potential inability to continue as a going concern, in future years could materially adversely affect our share price and our ability to raise new capital or enter into strategic alliances. Furthermore, we also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us.

 

 
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If we fail to obtain the capital necessary to fund our operations, we will be unable to continue our operations and you will likely lose your entire investment.

 

We will need to continue to seek capital from time to time to continue to execute our business plan. Our business or operations may change in a manner that would consume available funds more rapidly than anticipated and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products, acquire complementary products, business or technologies or otherwise respond to competitive pressures and opportunities. In addition, we may need to accelerate the growth of our sales capabilities and distribution beyond what is currently envisioned, and this would require additional capital. However, we may not be able to secure funding when we need it or on favorable terms. If we cannot raise adequate funds to satisfy our capital requirements, we will have to curtail or cease our operations.

 

Even if we can raise additional funding, we may be required to do so on terms that are dilutive to you.

 

The capital markets have been unpredictable in the recent past. The amount of capital that a company such as ours is able to raise often depends on variables that are beyond our control. As a result, we may not be able to secure financing on terms attractive to us, or at all. If we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs. If adequate funds are not available on acceptable terms, or at all, our business, including our results of operations, financial condition and our continued viability will be materially adversely affected.

 

Widespread health developments, including the recent global COVID-19 pandemic, could materially and adversely affect our business, financial condition and results of operations.

 

Our business has been, and may continue to be, impacted by the fear of exposure to or actual effects of the COVID-19 pandemic in countries where we operate or our customers are located, such as recommendations or mandates from governmental authorities to close businesses, limit travel, avoid large gatherings or to self-quarantine, as well as temporary closures or decreased operations of the facilities of our customers, distributors or suppliers. These impacts include, but are not limited to:

 

 

·

Significant reductions in demand or significant volatility in demand for one or more of our products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, quarantine or other restrictions, store or restaurant closures, or financial hardship, shifts in demand away from one or more of our higher priced products to lower priced products, or stockpiling or similar activity, reduced options for marketing and promotion of products or other restrictions in connection with the COVID-19 pandemic; if prolonged, such impacts can further increase the difficulty of operating our business, including accurately planning and forecasting;

 

 

 

 

·

Our inability to meet our consumers' and customers' needs and achieve costs targets due to disruptions in our manufacturing and supply arrangements caused by the loss or disruption of essential manufacturing and supply elements such as raw materials or purchased finished goods, logistics, reduction or loss of workforce due to the insufficiency or failure of our safety protocols, or other manufacturing and supply capability;

 

 

 

 

·

Failure of third parties on which we rely, including our suppliers, bottlers, distributors, contract manufacturers, contractors, commercial banks and external business partners, to meet their obligations to us or to timely meet those obligations, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties; or

 

 
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·

Significant changes in the conditions of the markets in which we manufacture, sell or distribute our products, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close our operating and manufacturing facilities, restrict our employees' ability to perform necessary business functions, restrict or prevent consumers from having access to our products, or otherwise prevent our third-party bottlers, distributors, partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products.

   

All of these impacts could place limitations on our ability to execute on our business plan and materially and adversely affect our business, financial condition and results of operations. We continue to monitor the situation, have actively implemented policies and procedures to address the situation, and may adjust our current policies and procedures as more information and guidance become available to address the evolving situation. The impact of COVID-19 may also exacerbate other risks discussed in this Report, any of which could have a material effect on us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently.

 

We face risks related to our inventory, and if we fail to accurately predict demand for our products, we may face write-downs or other charges.

 

We are exposed to inventory risks that may adversely affect our operating results as a result of new product launches, changes in product cycles and pricing, limited shelf-life of certain of our products, changes in consumer demand, and other factors. Demand for our products can change significantly between the time of production and the date of sale. If we are unable to accurately predict the demand for our products, we may face write-downs or other charges, which could have a material adverse effect on our business or operations.

 

Disruptions in our supply chain could have a substantial adverse impact on our ability to produce our products and the cost of our raw materials.

 

We are exposed to production risks, especially in the case of Bellissima Prosecco and Sparking Wines, due to weather conditions. The growing and harvesting of the grapes that we need to make our wines are directly affected by the weather conditions. Adverse weather conditions may decrease the availability of grapes thereby increasing the cost of grapes which would have a material adverse effect on our business and operations.

 

In addition, we produce our wines at two production facilities located in Sicily, Italy and Treviso, Italy. A disruption from fire or other catastrophic event at either of these facilities could halt production and have a material adverse effect on our financial condition.

 

Contamination and degradation of product quality from diseases, pests and weather conditions may have a material adverse effect on our business and results of operation.

 

Our success depends upon the positive image that consumers have of our brands and of the safety and quality of our products. Contamination, whether arising accidentally or through deliberate third-party action, or other events that harm the integrity or consumer support for our brands, could adversely affect their sales. Various diseases, pests, fungi, viruses, drought, frosts and certain other weather conditions could affect the quality and quantity of grapes and other agricultural raw materials available, decreasing the supply and quality of our products. We cannot guarantee that our grape suppliers or our suppliers of other agricultural raw materials will succeed in preventing contamination in existing vineyards or fields or that we will succeed in preventing contamination in our existing vineyards or future vineyards we may acquire. Future government restrictions regarding the use of certain materials used in growing grapes or other agricultural raw materials may increase vineyard costs and/or reduce production of grapes or other crops. It is also possible that a supplier may not provide materials or product components which meet our required standards or may falsify documentation associated with the fulfillment of those requirements.

 

 
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Product contamination or tampering or the failure to maintain our standards for product quality, safety and integrity, including with respect to raw materials, naturally occurring compounds, packaging materials or product components obtained from suppliers, may also reduce demand for our products or cause production and delivery disruptions. Contaminants or other defects in raw materials, packaging materials or product components purchased from third parties and used in the production of our wine or spirits products could lead to low beverage quality as well as illness among, or injury to, consumers of our products and may result in reduced sales of the affected brand or all our brands.

 

If any of our products become unsafe or unfit for consumption, are misbranded, or cause injury, we may have to engage in a product recall and/or be subject to liability and incur additional costs. A widespread product recall, multiple product recalls, or a significant product liability judgment could cause our products to be unavailable for a period, which could further reduce consumer demand and brand equity thereby adversely affecting our business and results of operations.

 

Climate change and environmental regulatory compliance may have an adverse effect on our operations.

 

Our business depends upon agricultural activity and natural resources. There has been much public discussion related to concerns that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters. Decreased availability of our raw materials may increase the cost of goods for our products. Severe weather events or changes in the frequency or intensity of weather events can also disrupt our supply chain, which may affect production operations, insurance cost and coverage, as well as delivery of our products to wholesalers, retailers and consumers. Natural disasters such as floods and earthquakes may also negatively impact the ability of consumers to purchase our products.

 

We may experience significant future increases in the costs associated with environmental regulatory compliance, including fees, licenses, and the cost of capital improvements for our operating facilities to meet environmental regulatory requirements. In addition, we may be party to various environmental remediation obligations arising in the normal course of our business or relating to historical activities of businesses we acquire. Due to regulatory complexities, uncertainties inherent in litigation and the risk of unidentified contaminants in our current and former properties, the potential exists for remediation, liability and indemnification costs to differ materially from the costs that we have estimated. We may incur costs associated with environmental compliance arising from events we cannot control, such as unusually severe floods, hurricanes, earthquakes or fires. We cannot assure you that our costs in relation to these matters will not exceed our projections or otherwise have a material adverse effect upon our business, liquidity, financial condition or results of operations.

 

A potential decline in the consumption of the products we sell could have a material adverse effect on our business.

 

Our business depends upon consumers’ consumption of our wine and spirits brands. Consumer preferences and tastes may shift due to, among other reasons, changing taste preferences, demographics or perceived value. Consequently, any material shift in consumer preferences and taste away from our, wine and spirits brands could have a negative impact on our business, liquidity, financial condition and/or results of operations. Consumer preferences may shift due to a variety of factors, including changes in demographic or social trends, public health policies, and changes in leisure, dining and beverage consumption patterns. A limited or general decline in consumption of our products could occur in the future due to a variety of factors, including:

 

 

·

a general decline in economic or geopolitical conditions;

 

 

 

 

·

concern about the health consequences of consuming beverage alcohol products and about drinking and driving;

 

 

 

 

·

a general decline in the consumption of beverage alcohol products in on-premise establishments, such as may result from stricter laws relating to driving while under the influence of alcohol;

 

 
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·

the increased activity of anti-alcohol groups;

 

 

 

 

·

increased federal, state, provincial and foreign excise or other taxes on beverage alcohol products and possible restrictions on beverage alcohol advertising and marketing;

 

 

 

 

·

inflation; and

 

 

 

 

·

wars, pandemics, weather and natural or man-made disasters.

 

Our wine products face significant competition which could adversely affect our business.

 

The wine industry is highly competitive. Our wines compete in several super-premium and ultra-premium wine market segments with many other domestic and foreign wines. Our wines also compete with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus by independent distributors, many of which carry extensive brand portfolios. In addition, the wine industry has experienced significant consolidation. Many competitors have greater financial, technical, marketing and public relations resources.

 

Our sales could be negatively affected by numerous factors including:

 

 

·

our inability to maintain or increase prices;

 

 

 

 

·

new entrants in our market or categories;

 

 

 

 

·

the decision of wholesalers, retailers or consumers to purchase competitors’ products instead of ours; or

 

 

 

 

·

a general decline in beverage alcohol consumption due to consumer dietary preference changes or consumers substituting legalized marijuana or other similar products in lieu of beverage alcohol.

  

Furthermore, sales could also be affected by pricing, purchasing, financing, operational, advertising or promotional decisions made by wholesalers, state and other local agencies, and retailers which could affect their supply of, or consumer demand for, our products. We could also experience higher than expected selling, general and administrative expenses if we find it necessary to increase the number of our personnel or our advertising or marketing expenditures to maintain our competitive position or for other reasons. We cannot guarantee that we will be able to increase our prices to pass along to our customers any increased costs we incur. Our sales may be harmed to the extent we are not able to compete successfully against wine or alternative beverage producers.

 

Our business depends on the effectiveness of our advertising and marketing programs, including the strength of our social media presence, to attract and retain members and subscribers.

 

Our business success depends on our ability to attract and retain consumers which depends significantly on the effectiveness of our advertising and marketing practices. In addition, from time-to-time, we use brand ambassadors, spokespersons and social media influencers in our advertising and marketing programs to communicate with consumers. Actions taken by these individuals that harm their personal reputation or image, or include the cessation of using our products, could have an adverse impact on the advertising and marketing campaigns in which they are featured. We and our brand ambassadors, spokespersons and social media influencers also use social media channels as a means of communicating with consumers. Unauthorized or inappropriate use of these channels could result in harmful publicity or negative consumer experiences, which could have an adverse impact on the effectiveness of our marketing in these channels. In addition, substantial negative commentary by others on social media platforms could have an adverse impact on our reputation and ability to attract and retain members and subscribers. If our advertising and marketing campaigns do not generate a sufficient number of consumers, our business, financial condition and results of operations could be adversely affected.

 

 
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The loss of one or more of our current customers could adversely affect our results of operations.

 

Our business is dependent not only on securing new customers but also on maintaining current customers. We had one customer, QVC, Inc., that accounted for approximately 68% of our sales for the year ended December 31, 2020. At December 31, 2020, one customer, QVC, Inc., accounted for an aggregate of approximately 60% of our accounts receivable. Unless we are able to retain our existing customers, or secure new customers if we lose one or more of our significant customers, our revenue and results of operations would be adversely affected. In addition, the default on payments by one or more of these significant customers may negatively impact our cash flow and current assets.

 

Any changes to our relation with QVC or retail outlets may have a material adverse effect on our business.

 

For the nine-month period ended September 30, 2021 and the year ended December 31, 2020, we had direct response sales of approximately $1.9 million and $2.0 million, respectively, which represented almost all of our direct to consumer sales for the year. These sales were made pursuant to the Marketing Agreement between United and QVC, which currently extends through December 4, 2021. Our agreements with other direct retail partners are informal and therefore subject to change. If the Marketing Agreement is terminated, one or more of the direct retail partners chose to purchase fewer products, or we are forced to reduce the prices at which we currently sell our products, our sales and profits would be reduced and the business would be harmed.

 

We may engage in strategic transactions that fail to enhance shareholder value.

 

From time to time, we may consider possible strategic transactions, including potential acquisitions or licensing of products or technologies or acquisition of companies, and other alternatives with the goal of maximizing shareholder value. If we do complete a strategic transaction, implementation of such transaction may impair shareholder value or otherwise adversely affect our business. There can be no assurance that our acquisitions will perform as expected in the future. For example, we may be unable to successfully integrate the operations of and/or the acquired assets of the businesses we acquire into our operations and we may not realize the anticipated efficiencies and synergies of such acquisitions. In addition, acquisitions require significant managerial attention, which may be diverted from our other operations. If the businesses or products we acquire do not achieve their intended results, our business, financial condition, and results of operations could be materially and adversely affected.

 

We may not be successful in hiring and retaining key employees, including executive officers.

 

Our future operations and successes depend in large part upon the strength of our management team. We rely heavily on the continued service of Richard DeCicco, our Chairman of the Board and President, Larry Romer, our Chief Executive Officer, John Cosenza, our Chief Operating Officer, David Allen, our Chief Financial Officer, and Rosanne Faltings, our Vice President and a member of our board of directors. Accordingly, if any of such persons terminates his or her employment with us, such a departure may have a material adverse effect on our business, and our future success depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified personnel. There can be no assurance that these professionals will be available in the market, or that we will be able to retain existing professionals or to meet or to continue to meet their compensation requirements. Furthermore, the cost base in relation to such compensation, which may include equity compensation, may increase significantly, which could have a material adverse effect on us. Failure to establish and maintain an effective management team and work force could adversely affect our ability to operate, grow and manage our business.

  

Our operations may be adversely affected by our failure to maintain or renegotiate supply, manufacturing or license agreements on favorable terms.

 

Our business involves a number of supply, manufacturing or license agreements for brands owned by us or by other companies. There can be no assurance that we will be able to renegotiate our rights on favorable terms when these agreements expire or that they will not be terminated. Failure to renew such agreements could have an adverse impact on our business and financial results.

 

 
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Class action or other litigation relating to alcohol abuse or the misuse of alcohol could adversely affect our business.

 

There has been increased public attention directed at the beverage alcohol industry, which we believe is due to concern over problems related to alcohol abuse, including drinking and driving, underage drinking and health consequences from the misuse of alcohol. Several beverage alcohol producers have been sued in several courts regarding alleged advertising practices relating to underage consumers. Adverse developments in these or similar lawsuits or a significant decline in the social acceptability of beverage alcohol products that results from these lawsuits could materially adversely affect our business.

 

Regulatory decisions and changes in the legal and regulatory environment could increase our costs and liabilities or limit our business activities.

 

Our operations are subject to extensive regulatory requirements relating to production, distribution, importation, marketing, advertising, sales, pricing, labelling, packaging, product liability, antitrust, labor, pensions, compliance and control systems, and environmental issues. Changes in any such applicable laws, regulations or governmental or regulatory policies and/or practices could cause us to incur material additional costs or liabilities that could adversely affect our business. In particular, governmental bodies in jurisdictions where we operate may impose new labelling, product or production requirements, limitations on the marketing, advertising and/or promotion activities used to market beverage alcohol, restrictions on retail outlets, restrictions on importation and distribution or other restrictions on the locations or occasions where beverage alcohol is sold which directly or indirectly limit the sales of our products. Regulatory authorities may also have enforcement power that can subject us to actions such as product recalls, product seizures or other sanctions which could have an adverse effect on our sales or damage our reputation. Any changes to the regulatory environment in which we operate could also cause us to incur material additional costs or liabilities, which could adversely affect our performance.

 

In addition, most states in which our wines and spirits are sold impose varying excise taxes on the sale of alcoholic beverages. Prompted by growing government budget shortfalls and public reaction against alcohol abuse, government entities often consider legislation that could potentially affect the taxation of alcoholic beverages. Excise tax rates being considered are often substantial. The ultimate effects of such legislation, if passed, cannot be assessed accurately. Any increase in the taxes imposed on wines and spirits can be expected to have a potentially adverse impact on overall sales of such products. However, the impact may not be proportionate to that experienced by distributors of other alcoholic beverages and may not be the same in every state.

 

We are subject to cybersecurity risks.

 

Cybersecurity risks and attacks continue to increase. Cybersecurity attacks are evolving and not always predictable. Attacks include malicious software, threats to information technology infrastructure, denial-of-service attacks on websites, attempts to gain unauthorized access to data, and other breaches. Data breaches can originate with authorized or unauthorized persons. Authorized persons could inadvertently or intentionally release confidential or proprietary information, and recipients could misuse data. Such events could lead to interruption of our operations or business, unauthorized release or use of information, compromise of data, damage to our reputation, damage to our customers or vendors, and increased costs to prevent, respond to or mitigate any events.

 

Risks Related To Our Common stock

 

The market price of our common stock may be volatile and may be affected by market conditions beyond our control.

 

The market price of our common stock is subject to significant fluctuations in response to, among other factors:

 

 
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·

variations in our operating results and market conditions specific to companies in our industry;

 

 

 

 

·

changes in financial estimates or recommendations by securities analysts;

 

 

 

 

·

announcements of innovations or new products or services by us or our competitors;

 

 

 

 

·

the emergence of new competitors;

 

 

 

 

·

operating and market price performance of other companies that investors deem comparable;

 

 

 

 

·

changes in our board or management;

 

 

 

 

·

sales or purchases of our common stock by insiders;

 

 

 

 

·

commencement of, or involvement in, litigation;

 

 

 

 

·

changes in governmental regulations; and

 

 

 

 

·

general economic conditions and slow or negative growth of related markets.

   

In addition, if the market for stocks in our industry or the stock market in general, experiences a loss of investor confidence, the market price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management.

 

Future sales and issuances of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.

 

We expect that significant additional capital will be needed in the future to continue our planned operations, including continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

 

Financial reporting obligations of being a public company in the United States are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.

 

As a publicly traded company we incur significant legal, accounting and other expenses. The obligations of being a public company in the United States require significant expenditures and places significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

 

If we do not continue to meet the eligibility requirements of the OTCQB, our common stock may be removed from the OTCQB and moved for quotation on the OTC Pink tier of the marketplace maintained by OTC Markets Group, Inc., which may make it more difficult for investors to resell their shares.

 

 
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Our common stock is currently quoted on the OTCQB tier of the marketplace maintained by OTC Markets Group, Inc. The OTCQB requires a minimum bid price of $0.01. If the bid price goes below $0.01, we may be removed from the OTCQB. If we are removed from the OTCQB, our stock will be quoted on the OTC Pink tier. Broker-dealers often decline to trade in over-the-counter stocks that are quoted on the OTC Pink tier given the market for such securities are often limited, the stocks are more volatile, and the risk to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to dispose of their shares.

 

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

We have no independent directors and no board committees. This may hinder our board of directors’ effectiveness in fulfilling the typical functions of a board and of committees thereof.

 

Currently, we have no independent directors, nor do we have an audit committee, compensation committee or nominating and corporate governance committee at this time. An independent board members, and audit, compensation and nominating and corporate governance committees with independent directors play a crucial role in the corporate governance process, assessing a company’s processes relating to its risks and control environment, overseeing financial reporting, preventing self-dealing by company executives and evaluating internal and independent audit processes. The lack of an independent board or board committees prevents the board of directors from being independent from management in its judgments and decisions and its ability to pursue the board’s responsibilities without undue influence. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified, independent directors, the management of our business could be compromised. In addition, our board of directors does not have a “financial expert”.

 

We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.

 

 
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We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the increase, if any, of our share price.

 

Our Articles of Incorporation, as amended (“Articles of Incorporation”), our Restated Bylaws, and Nevada law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause our stock price to decline.

  

Our Articles of Incorporation, Bylaws, and Nevada law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 100,000,000 shares of preferred stock, of which 45,000 shares have been designated as Series A-2 Preferred Stock and 20,724.70 are issued and outstanding and an additional 11,578.40 shares of Series A-2 Preferred Stock will be issued to the Selling Stockholders and outstanding within five days of the date of this prospectus. Our authorized but undesignated preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further action by stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock, and therefore, reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by the present management.

    

Provisions of our Articles of Incorporation, our Bylaws and Nevada law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholder s to replace or remove our management. In particular, the Articles of Incorporation, our Bylaws and Nevada law, as applicable, among other things:

 

 

·

provide the board of directors with the ability to alter the Bylaws without stockholder approval; and

 

 

 

 

·

provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum.

   

We have identified a material weakness in our internal control over financial reporting that could, if not remediated, result in material misstatements in our financial statements.

 

In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2020, we have concluded that there is a material weakness relating to our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

Specifically, we identified a material weakness relating to the lack of segregation of duties. Although we need to take measures to fully mitigate such material weakness, the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weakness will not result in a material misstatement of our annual or interim consolidated financial statements. If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC, will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and materially and adversely impact our business and financial condition.

    

 
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus includes forward-looking statements. These statements involve risks known to us, significant uncertainties, and other factors which may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by those forward-looking statements.

 

Some of the statements in this prospectus constitute “forward-looking statements” that represent our beliefs, projections and predictions about future events. From time to time in the future, we may make additional forward-looking statements in presentations, at conferences, in press releases, in other reports and filings and otherwise. Forward-looking statements are all statements other than statements of historical fact, including statements that refer to plans, intentions, objectives, goals, targets, strategies, hopes, beliefs, projections, prospects, expectations or other characterizations of future events or performance, and assumptions underlying the foregoing. The words “may,” “could,” “should,” “would,” “will,” “project,” “intend,” “continue,” “believe,” “anticipate,” “estimate,” “forecast,” “expect,” “plan,” “potential,” “opportunity,” “scheduled,” “goal,” “target,” and “future,” variations of such words, and other comparable terminology and similar expressions and references to future periods are often, but not always, used to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements about the following:

 

 

·

our prospects, including our future business, revenues, expenses, net income, earnings per share, gross margins, profitability, cash flows, cash position, liquidity, financial condition and results of operations, our targeted growth rate, our goals for future revenues and earnings, and our expectations about realizing the revenues in our backlog and in our sales pipeline;

 

 

 

 

·

the potential impact of COVID-19 on our business and results of operations;

 

 

 

 

·

the effects on our business, financial condition and results of operations of current and future economic, business, market and regulatory conditions, including the current economic and market conditions and their effects on our customers and their capital spending and ability to finance purchases of our products, services, technologies and systems;

 

 

 

 

·

the effects of fluctuations in sales on our business, revenues, expenses, net income, earnings per share, margins, profitability, cash flows, capital expenditures, liquidity, financial condition and results of operations;

 

 

 

 

·

our ability to successfully develop and market new products;

 

 

 

 

·

our markets, including our market position and our market share;

 

 

 

 

·

our ability to successfully develop, operate, grow and diversify our operations and businesses;

 

 

 

 

·

our business plans, strategies, goals and objectives, and our ability to successfully achieve them;

 

 

 

 

·

the sufficiency of our capital resources, including our cash and cash equivalents, funds generated from operations, availability of borrowings under our credit and financing arrangements and other capital resources, to meet our future working capital, capital expenditure, lease and debt service and business growth needs;

 

 

 

 

·

the value of our assets and businesses, including the revenues, profits and cash flows they are capable of delivering in the future;

 

 
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·

the effects on our business operations, financial results, and prospects of business acquisitions, combinations, sales, alliances, ventures and other similar business transactions and relationships;

 

 

 

 

·

industry trends and customer preferences and the demand for our products, services, technologies and systems; and

 

 

 

 

·

the nature and intensity of our competition, and our ability to successfully compete in our markets.

 

These statements are necessarily subjective, are based upon our current plans, intentions, objectives, goals, strategies, beliefs, projections and expectations, and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly-available information with respect to the factors upon which our business strategy is based, or the success of our business. Furthermore, industry forecasts are likely to be inaccurate, especially over long periods of time.

 

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that may cause actual results, our performance or achievements, or industry results to differ materially from those contemplated by such forward-looking statements include, without limitation, those discussed under the caption “Risk Factors” in this prospectus.

 

 
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USE OF PROCEEDS

 

We are not selling any securities under this prospectus and will not receive any proceeds from the sale of the shares of common stock offered by this prospectus by the Selling Stockholders. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current exercise price with respect to all Warrants, would result in gross proceeds to us of approximately $40,300,000. The proceeds from such Warrant exercises, if any, will be used for working capital and general corporate purposes. We cannot predict when or whether the Warrants will be exercised, and it is possible that some or all of the Warrants may expire unexercised. For information about the Selling Stockholders, see “Selling Stockholders.”

 

The Selling Stockholders will pay any underwriting discounts and commissions and expenses incurred by the Selling Stockholders for brokerage or legal services or any other expenses incurred by the Selling Stockholders in disposing of the shares of common stock offered hereby. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares of common stock covered by this prospectus, including all registration and filing fees and fees and expenses of our counsel and accountants.

 

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

 

Market Information for Common Stock

 

Our common stock trades under the ticker symbol “ICNB” on the OTCQB tier of the OTC Markets, Inc.

 

Holders

 

As of November 22, 2021, we had approximately 2,000 stockholders of record, according to the records of our transfer agent, and an unknown number of additional holders of common stock held in ‘street name’.

 

Dividends

  

We have not declared any common stock dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. However, an aggregate of 7,545,198 shares of common stock are issuable to the holders of our Series A-2 Preferred Stock, as a one-time dividend payment equal to $1,000 per share of the outstanding Series A-2 Preferred Stock in cash or, at our option, in shares of common stock, or a combination thereof, subject to the potential adjustment in the event the average of the volume weighted average price of our common stock  for each of the 15 consecutive trading days ending on the trading day immediately prior to July 1, 2022 is less than the conversion price then in effect. The payment by us of dividends, if any, in the future, is within the discretion of our board of directors and will depend upon, among other things, our earnings, capital requirements and financial condition, as well as other relevant factors. There are no material restrictions in our Articles of Incorporation, as amended, or Bylaws that restrict us from declaring dividends.

 

 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the forward-looking statements in this prospectus reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. See the discussion under the section title “Special Note Regarding Forward Looking Statements” included elsewhere in this prospectus. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this prospectus as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

 

You should read the following discussion and analysis of our financial condition and plan of operations together with and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this prospectus. All amounts in this report are in U.S. dollars, unless otherwise noted.

 

Overview

 

We are a lifestyle branding company with expertise in developing, from inception to completion, and branding alcoholic beverages and related products for ourselves and third parties. We market and place products into national distribution through long-standing industry relationships. We believe we are a leader in “Celebrity Branding” of beverages in which we procure superior and unique products from around the world and brand such products with internationally-recognized celebrities. We currently market and sell the following alcoholic beverage products:

 

 

·

Bellissima Prosecco - these products comprise a line of all-natural and Vegan Prosecco and Sparkling Wine made with organic grapes, including a Zero Sugar, Zero Carb option, a DOC Brut and a Sparkling Rose; and

 

 

 

 

·

Bella Sprizz Apertifs - these products comprise a line of aperitifs consisting of three different expressions, a classic Italian aperitif an all-natural elderflower aperitif and a classic Italian bitter.

   

In addition, we also develop and market private label spirits for established domestic and international chains.

 

As a result of our July 2021 acquisition of 100% of the equity of TopPop LLC (“TopPop”), we now have a fully vertically integrated company for alcohol brands. TopPop is a premier product development, contract manufacturing and packaging company that specializes in flexible packaging applications in the food, beverage and health categories. TopPop has the federal and state licenses necessary to manufacture and blend malt, wine and spirits-based products and, in June 2020, it opened a 27,000-square-foot FDA-approved manufacturing facility in Marlton, New Jersey with a Safe Quality Food certification. The Marlton facility is leased by TopPop for a term of five years with two five-year renewal options. In September 2021, TopPop leased an additional 65,000 square feet for manufacturing in Pennsauken, New Jersey. The lease runs through December 31, 2027. Construction is currently ongoing, and the facility is expected to be operational by January 1, 2022. The facility will include approximately $4 million of high-speed packaging equipment and is expected to increase our production capacity by three times. TopPop also entered into a two-year lease in November 2020 for an additional 15,000 square feet in Bellmawr, New Jersey to be used for overflow warehousing of packaging components.

 

For its first product line, TopPop identified the single serve, ready-to-drink (“RTD”) and ready-to-freeze (“RTF”) segments as ripe for product and packaging innovation. TopPop introduced an alcohol-infused ice pop in June 2020, and successfully marketed the concept to major alcohol companies. In addition, it developed its own product line trademarked under the name BoozyPopz® which will be sold through e-commerce platforms and directly to sports and entertainment venues. Despite launching during the COVID-19 pandemic, TopPop manufactured approximately 10 million ice pops from the launch in June through December 31, 2020. It has produced approximately 36 million ice pops during the nine-month period ending September 30, 2021. TopPop has also developed a robust pipeline in the single serve, RTD alcohol cocktail market and anticipates launching a line of products in this market in 2022. TopPop designs and markets flexible packaging for its RTD and RTF products with formulations that are low calorie and contain healthy and natural ingredients. With the opening of TopPop’s new facility expected in January 2022, we expect to have the capacity to manufacture over 150 million units in 2022.

  

 
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We believe TopPop brings to us additional synergies and opportunities for cross-promoting new and existing products to a broader customer base and positions our company, including our wholly owned subsidiary TopPop, as a company that establishes and supports brands, innovates, produces, licenses, packages and sells alcohol and non-alcohol beverages and creates sustainable packaging solutions to the consumable goods market. Our focus on lifestyle branding and the rising “Better-for-You”, “Better-for-Planet” consumer category has made us a leader in developing celebrity brands worldwide such as its Bellissima Prosecco by Christie Brinkley. TopPop is a pioneer in flexible packaging. The company’s creative solutions from inception to full scale production, like its RTF alcohol ice pops, make it a harbinger in the “pouch market”, one of the fastest growing segments of the beverage industry. TopPop’s proprietary and visionary applications has made the company a leader in providing these increasingly desirable products and services, from “design through delivery”, to some of the largest Fortune 500 and multinational alcohol beverage companies and brands today.

 

Our mission is to be an industry leader in the brand development, marketing and sales of alcoholic beverages and related products by capitalizing on our ability to procure products from around the world and to develop unique and innovative packaging to create brand and product line extensions. We plan to leverage our relationships with internationally-recognized celebrities and social media influencers to add value to products and create brand awareness in unbranded niche categories.

 

Recent Developments

 

COVID-19

 

As a result of COVID-19, we have seen a shift away from the traditional brick-and-mortar business to a direct-to-consumer business. Although we expect brick-and-mortar to rebound, we also expect the director-to-consumer model to stay post-COVID-19, as consumers embrace the convenience of having their alcoholic beverages delivered to their doorstep. As we expand our relationship with QVC and our own direct-to-consumer platform through our website, we believe we are well positioned to execute on this opportunity.

 

TopPop Acquisition

 

On July 26, 2021, we completed the acquisition of TopPop. In connection with such acquisition, the former TopPop members received, in the aggregate: (a) $3,995,551 in cash by transfer of immediately available funds, (b) 26,009,600 shares of our common stock, which shares were valued in the aggregate at $8,128,000, or $0.3125 per share, (c) $4,900,000.00 aggregate principal amount of our promissory notes and (d) future additional cash payments as earnout consideration. The earn-out payments, if any, will be made (i) following the 12-month period commencing on August 1, 2021, in an aggregate amount equal to the excess, if any, of: (A) 1.96 times TopPop’s EBITDA for the period over (B) the aggregate amount of the closing promissory notes repaid in cash during period; provided, however, no such amount shall be payable if (i)(A) does not exceed (i)(B); and (ii) following the 12-month period commencing on August 1, 2022, in an aggregate amount equal to the excess, if any, of: (A) 1.96 times TopPop’s EBITDA for such period over (B) the aggregate amount of the closing promissory notes repaid in cash during the period; provided, however, no such amount shall be payable if (ii)(A) does not exceed (ii)(B). The earn-out payments will be made, at the election of each former TopPop member, in cash or in shares of our common stock or a combination thereof, less any reserve for possible indemnification payments, provided that not less than 45% of the value of each earn-out payment shall be paid in common stock. If paid in shares of common stock, such shares shall be valued at the then-prevailing market rate.

 

Series A-2 Convertible Preferred Stock Financing

 

On July 26, 2021, we entered into securities purchase agreements dated as of July 26, 2021 with certain accredited investors for the sale of an aggregate of 32,303.11 shares of our newly-created Series A-2 Preferred Stock, an aggregate of 11,320,201 shares of common stock, and Warrants to purchase an aggregate of 114,690,150 shares of common stock, for gross proceeds of $35,840,672, before deducting placement agent and other offering expenses. Pursuant to the purchase agreements, the shares of Series A-2 Preferred Stock, common stock and Warrants were sold in two tranches, the first of which closed on July 26, 2021 for gross proceeds of $22,918,203 for the sale of an aggregate of 20,724.70 shares of Series A-2 Preferred Stock, an aggregate of 7,019,196 shares of common stock, and Warrants to purchase an aggregate of 73,338,203 shares of common stock. Of the $22,918,203 gross proceeds we received upon the closing of the first tranche, $18,147,354 was paid in cash, $676,708 was paid by assignment to us of $676,708 aggregate principal amount, and accrued interest, of our outstanding original issue discount promissory notes and $3,762,000 was paid by assignment to us of $3,762,000 aggregate principal amount of TopPop’s outstanding original issue discount promissory notes, all of which notes were cancelled by us. A $332,141 discount was applied to the cash component of the purchase price received upon the closing of the first tranche.

 

 
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Pursuant to the purchase agreements, the closing of the second tranche, which will include the sale of an additional 11,578.40 shares of Series A Preferred Stock, 4,301,005 shares of common stock, and Warrants to purchase an additional 41,351,901 shares of common stock for gross proceeds of $12,690,901, all of which will be paid in cash, will occur within five trading days of the date of this prospectus. The closing of the transactions contemplated by the purchase agreements were subject to the satisfaction of certain closing conditions, including the execution of the Registration Rights Agreement (as defined below), and the consummation of the transactions contemplated by the TopPop acquisition agreement, the Exchange Agreement (as defined below), and the United Purchase Agreement (as defined below).

 

The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.3125 per share. The Warrants may be exercised on a cashless basis if the shares of common stock underlying the Warrants are not then registered for resale pursuant to an effective registration statement under the Securities Act, including the registration statement of which this prospectus forms a part.

 

In connection with this offering, we entered into a Placement Agency Agreement with Dawson James Securities, Inc. (the “Placement Agent”), pursuant to which at the closing of the first tranche under the purchase agreements we paid to the Placement Agent a cash fee in the amount of $2,350,000 and we agreed to pay to the Placement Agent in connection with the closing of the second tranche under the purchase agreements a cash fee in the amount of $1,150,000. In addition, we agreed to pay to the Placement Agent a fee in connection with any cash exercise of any of the Warrants in an amount equal to 10% of the cash amount received by us upon any such exercise. Pursuant to the Placement Agency Agreement, as additional consideration for the services of the Placement Agent, we also issued to the Placement Agent or its designees in connection with the closing of the first tranche under the purchase agreements 2,194 shares of Series A-2 Preferred Stock and agreed to issue to the Placement Agent or its designees in connection with the closing of the second tranche under the purchase agreements an additional 1,096 shares of Series A-2 Preferred Stock.

 

Exchange of Issued and Outstanding Series E, F and G Convertible Preferred Stock and Series E, F and G Common Stock Purchase Warrants

 

On July 26, 2021, we entered into securities exchange agreements with the holders of our outstanding (a) Series E Convertible Preferred Stock, Series F Convertible Preferred Stock and Series G Convertible Preferred Stock (the “Existing Preferred Stock”), and (b) Series E Common Stock Purchase Warrants, Series F Common Stock Purchase Warrants and Series G Common Stock Purchase Warrants (the “Existing Warrants” and together with the Existing Preferred Stock, collectively, the “Existing Securities”), pursuant to which such holders exchanged (i) all Existing Preferred Stock held by each holder for shares of Series A-2 Preferred Stock and Warrants, and (ii) all Existing Warrants held by each holder for shares of common stock. In connection with such exchange, the holders exchanged all of their Existing Securities for an aggregate of 3,704.80 shares of Series A-2 Preferred Stock, Warrants to purchase an aggregate of 14,304,880 shares of common stock, and 2,449,517 shares of common stock. Upon such exchange, the Existing Securities were cancelled and all contractual (or similar) rights, preferences and obligations relating to such Existing Securities became null and void and of no further effect whatsoever.

 

Redemption of Series F Convertible Preferred Stock

 

On July 26, 2021, we entered into redemption agreements with the former holders of our Series F Convertible Preferred Stock, pursuant to which we redeemed all outstanding shares of our Series F Convertible Preferred Stock for an aggregate purchase price of $225,000 in accordance with the terms of such redemption agreements.

 

Exchange of Issued and Outstanding Series A Preferred Stock

 

On July 26, 2021, we entered into a securities exchange agreement dated as of July 26, 2021 with Richard DeCicco, who, at the time of execution and delivery of such agreement, was our Chief Executive Officer, Chief Financial Officer, chairman of our board of directors and the holder of our one issued and outstanding share of Series A Preferred Stock, and is currently our Chairman of the Board and President. Pursuant to such agreement, Mr. DeCicco exchanged his one share of Series A Preferred Stock for 25,600,000 shares of our common stock. Upon such exchange, the Series A Preferred Stock, which previously gave Mr. DeCicco two votes for every one vote of our outstanding voting securities, was cancelled and all contractual (or similar) rights, preferences and obligations relating to such Series A Preferred Stock became null and void and of no further effect whatsoever.

 

 
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Purchase of all Issued and Outstanding Capital Stock of United Spirits, Inc.

 

On July 26, 2021, we entered into a securities purchase agreement with Mr. DeCicco pursuant to which we purchased from Mr. DeCicco all of the issued and outstanding capital stock of United Spirits, Inc., a New York corporation (“United”). Pursuant to such purchase agreement, Mr. DeCicco transferred to us 100% of the issued and outstanding capital stock of United in exchange for a purchase price of $1,000,000. The purchase agreement contains customary representations, warranties and covenants of the parties thereto, and the closing of the transactions contemplated by such purchase agreement was subject to the satisfaction of certain closing conditions, including, without limitation, certain approvals from various state liquor authorities. Prior to the closing of such transaction, we marketed and sold our wine and spirts products pursuant to an exclusive marketing and distribution agreement between United and us.

 

Amended and Restated LLC Agreements of Bellissima Spirits LLC and BiVi LLC

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Rosanne Faltings, our vice president of sales and a member of the Board, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of Bellissima. Such agreement provides that the manager of Bellissima, currently Mr. DeCicco, may cause Bellissima to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause Bellissima to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in Bellissima are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Ms. Faltings, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of BiVi. Such agreement provides that the manager of BiVi, currently Mr. DeCicco, may cause BiVi to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause BiVi to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in BiVi are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

 

Going Concern

 

In connection with the audits of our financial statements for the years ended December 31, 2020 and 2019, we received reports from our independent registered public accounting firm that included an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. In order to continue as a going concern, we must effectively balance many factors and generate more revenue so that we can fund our operations from our sales and revenues. If we are not able to do this, we may not be able to continue as an operating company. Until we can grow our revenues to an amount sufficient to meet our operating expenses, we must continue to raise capital by issuing debt or through the sale of our stock. There is no assurance that our cash flow will be adequate to satisfy our operating expenses and capital requirements. However, as a result of the financing transaction we completed on July 26, 2021, we believe we have, and upon the closing of the second tranche of such financing, which is expected to occur in January 2022, will have, sufficient operating capital and funds to purchase capital equipment, both of which are required for us to achieve our growth and cash flow estimates.

 

 
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Results of Operations for the Nine Months Ended September 30, 2021 and 2020

  

Introduction

 

We had sales of $4,065,884 for the nine months ended September 30, 2021, compared to $2,173,684 for the nine months ended September 30, 2020, an increase of $1,892,200. Our operating expenses were $6,932,029 for the nine months ended September 30, 2021, compared to $3,411,371 for the nine months ended September 30, 2020, an increase of $3,520,658 or approximately 103%. Our net operating (loss) was ($6,138,615) for the nine months ended September 30, 2021, compared to ($2,571,408) for the nine months ended September 30, 2020, an increase of $3,567,207 or approximately 139%. A significant amount of these increases relate to the inclusion of the results of TopPop for the period from July 26, 2021 to September 30, 2021 and are detailed below.

 

Our results of operations for the nine months ended September 30, 2021 and 2020 were as follows:

 

ICONIC BRANDS, INC.

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

 

 

2021

 

 

2020

 

 

Increase / Decrease

 

REVENUE

 

 

 

 

 

 

 

 

 

Sales

 

$ 4,065,884

 

 

$ 2,173,684

 

 

$ 1,892,200

 

Cost of goods sold

 

 

2,794,927

 

 

 

850,249

 

 

 

1,944,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

1,270,957

 

 

 

1,323,435

 

 

 

(52,478 )

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Officers compensation

 

 

1,847,840

 

 

 

311,250

 

 

 

1,536,590

 

Professional and consulting fees

 

 

1,408,425

 

 

 

792,205

 

 

 

616,220

 

Royalties

 

 

345,162

 

 

 

171,254

 

 

 

173,908

 

Investor relations

 

 

212,120

 

 

 

525,448

 

 

 

(313,328 )

Marketing and advertising

 

 

598,972

 

 

 

597,652

 

 

 

1,320

 

Travel and entertainment

 

 

128,195

 

 

 

20,471

 

 

 

107,724

 

Other operating expenses, including occupancy

 

 

2,391,315

 

 

 

993,091

 

 

 

1,398,224

 

Total operating expenses

 

 

6,932,029

 

 

 

3,411,371

 

 

 

3,520,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(5,661,072 )

 

 

(2,087,936 )

 

 

(3,573,136 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Gain on forgiveness of PPP loan

 

 

28,458

 

 

 

-

 

 

 

(28,458 )

Interest and amortization expense

 

 

(483,293 )

 

 

-

 

 

 

483,293

 

Loss on investment in and receivable from Can B Corp

 

 

-

 

 

 

(483,472 )

 

 

(483,472 )

Other expense, net

 

 

(22,708 )

 

 

-

 

 

 

22,708

 

Total other income (expense)

 

 

(477,543 )

 

 

(483,472 )

 

 

5,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (6,138,615 )

 

$ (2,571,408 )

 

 

(3,567,207 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to noncontrolling interests in subsidiaries and variable interest entity

 

$ (138,078 )

 

$ 37,321

 

 

 

175,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) attributable to Iconic Brands, Inc.

 

$ (6,000,537 )

 

$ (2,608,729 )

 

 

(3,391,808 )

 

 
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Sales

 

Our sales are comprised of sales of BiVi Sicilian Vodka, Bellissima Prosecco and Sparkling Wine, the line of Hooters brand products and our RTF TopPop products. Sales were $4,065,884 for the nine months ended September 30, 2021, and $2,173,684 for the nine months ended September 30, 2020, an increase of $1,892,200 or approximately 87%. The increase of $1,892,200 is due primarily to a $2,045,000 increase in sales from our newly-acquired TopPop products, offset by a decrease of $152,800 in sales of our alcohol-related products.

 

Cost of Sales

 

Cost of sales was $2,794,927, or approximately 69% of sales, for the nine months ended September 30, 2021, and $850,249, or approximately 39% of sales, for the nine months ended September 30, 2020. Cost of sales includes the cost of the products purchased from our suppliers, freight-in costs and import duties. The significant increase in cost of goods as a percentage of sales, year over year, is due to the change in product mix in 2021 because of our TopPop acquisition. Cost of goods for the nine months ended September 30, 2021, for our alcohol sales remained at approximately 39%, which was similar to the prior year, while the costs associated with our TopPop acquisition were approximately 95% during the nine months ended September 30, 2021, due to significant labor costs and write down of perishable items as the summer production season winds down. The historical cost of goods for TopPop products is approximately 65% and we expect to achieve that margin in future quarters.

 

Officers Compensation

 

Officers’ compensation was $1,847,840 for the nine months ended September 30, 2021 and $311,250 for the nine months ended September 30, 2020. This increase of $1,536,590 was due to the hiring of four additional employees and the one-time payment of $1 million to an officer for the purchase of such officer’s interest in United, which was acquired from such officer as part of the TopPop financing and acquisition transactions.

 

Professional and Consulting Fees

 

Professional and consulting fees were $1,408,425 for the nine months ended September 30, 2021, and $792,205 for the nine months ended September 30, 2020, an increase of $616,220. Professional and consulting fees consist primarily of legal and, accounting and auditing services. The increase of $616,220 from 2020 to 2021 was related to costs associated with the various acquisition and financing transactions contemplated or completed in 2021.

 

Royalties

 

We expensed royalties of $345,162 for the nine months ended September 30, 2021, compared to $171,254 for the nine months ended September 30, 2020, an increase of $173,908, or 102%. Royalties increased due primarily to recognition of a $135,000 minimum royalty due on one of our product lines.

 

Investor relations

 

Investor relations expenses were $212,120 for the nine months ended September 30, 2021 and were $525,448 for the nine months ended September 30, 2020. The decrease of $313,328 is primarily due to less spending in 2021; however, we expect our investor relations spending for the remainder of 2021 and full year 2022 will significantly increase following our TopPop acquisition.

 

Marketing and Advertising

 

Marketing and advertising expenses were $598,972 for the nine months ended September 30, 2021, and $597,652 for the nine months ended September 30, 2020, an increase of $1,320.

 

 
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Travel and Entertainment

 

Travel and entertainment expenses were $128,195 for the nine months ended September 30, 2021, and $20,471 for the nine months ended September 30, 2020, an increase of $107,724. The increase was a result of limited travel during the nine months ended September 30, 2020, due to the COVID-19 environment. During the nine months ended September 30, 2021, our personnel attended numerous product development events.

 

Other Operating Expenses

 

Other operating expenses were $2,391,315 for the nine months ended September 30, 2021, and $993,091 for the nine months ended September 30, 2020, an increase of $1,398,224 or approximately 141%. The increase was primarily related to $780,000 of operating cost associated with our acquisition of TopPop and an increase in salary costs of approximately $350,000 due to hiring additional personnel.

 

Net Operating Income/Loss

 

We had a (loss) from operations of ($5,661,072) for the nine months ended September 30, 2021, and ($2,087,936) for the nine months ended September 30, 2020, an increase of $3,573,136 or approximately 171%. Net operating (loss) increased as set forth above.

 

Other Income (Expense)

 

We had Other Expense of $477,543 for the nine months ended September 30, 2021, primarily due to interest expense of $483,293, while we had Other Expense of $483,472 for the nine months ended September 30, 2020, primarily due to a loss on investment.

 

Net (income) Loss attributable to Noncontrolling Interests in Subsidiaries

 

Net income attributable to noncontrolling interests in subsidiaries represented 49% of the net loss of Bellissima and BiVi (of which we own 51%) and is accounted for as a reduction in the net loss attributable to us. Net (Loss) for the nine months ended September 30, 2021 was ($138,078) compared to net income of $37,321 for the nine months ended September 30,2021. Prior to our acquisition of United we consolidated the results of United as a variable interest entity in our financial statements. With the acquisition of United, there is no longer a noncontrolling interest associated with this entity, as it is now a 100%-owned subsidiary.

 

Net Loss Attributable to Iconic Brands, Inc.

 

The net loss attributable to Iconic Brands, Inc. was ($6,000,537) for the nine months ended September 30, 2021 and ($2,608,729) for the nine months ended September 30, 2020, an increase of $3,391,808 or approximately 130%. The net loss from Iconic Brands increased primarily because of the items described above.

 

 
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Results of Operations for the Years Ended December 31, 2020 and 2019

 

Our revenues, operating expenses and net operating loss for the years ended December 31, 2020 and 2019 were as follows:

 

 

 

Year Ended December 31, 2020

 

 

Year Ended December 31, 2019

 

 

Increase / (Decrease)

 

Sales

 

$ 2,848,913

 

 

$ 1,210,242

 

 

$ 1,638,671

 

Cost of Sales

 

 

1,330,441

 

 

 

734,428

 

 

 

596,013

 

Gross Profit

 

 

1,518,472

 

 

 

475,814

 

 

 

1,042,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Officers’ compensation

 

 

415,000

 

 

 

497,000

 

 

 

(82,000 )

Fulfillment Costs

 

 

536,255

 

 

 

-

 

 

 

536,255

 

Royalties

 

 

497,253

 

 

 

198,002

 

 

 

299,251

 

Professional fees

 

 

962,481

 

 

 

1,260,343

 

 

 

(297,862 )

Marketing and advertising

 

 

801,445

 

 

 

512,707

 

 

 

288,738

 

Travel and entertainment

 

 

41,208

 

 

 

319,483

 

 

 

(278,275 )

Other operating expenses, including occupancy

 

 

1,462,922

 

 

 

1,019,576

 

 

 

443,346

 

Total operating expenses

 

 

4,716,564

 

 

 

3,807,111

 

 

 

909,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating (loss) from continuing operations

 

 

(3,198,092 )

 

 

(3,331,297 )

 

 

133,205

 

Loss on Investment in Can B Corp

 

 

(483,472 )

 

 

-

 

 

 

(483,472 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interests in subsidiaries and variable interest entity

 

 

109,962

 

 

 

424,599

 

 

 

(314,637 )

Net income (loss) before discontinued operations

 

 

(3,571,602 )

 

 

(2,906,698 )

 

 

(664,904 )

Loss from discontinued operation

 

 

-

 

 

 

(1,047,213 )

 

 

1,047,213

 

Net Loss attributable to Iconic Brands

 

$ (3,751,602 )

 

$

(3,953,911 )

 

$

382,309

 

 

Sales

 

Our sales were comprised of sales of BiVi Sicilian Vodka and Bellissima Prosecco and Sparkling Wine and our newly-introduced line of Hooters Spirits. Sales were $2,848,913 for the year ended December 31, 2020 compared to $1,210,242 for the year ended December 31, 2019, an increase of $1,638,671, or 135%. The $1,638,671 increase in sales in 2020 over 2019 was primarily due to a $1,632,000 increase in sales of Bellissima Prosecco through the QVC sales channel.

 

 
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Cost of Sales

 

Cost of sales for the year ended December 31, 2020 were $1,330,441 compared to $734,428 during the year ended December 31, 2019, an increase of $596,013. Cost of sales includes the cost of the products purchased from our Italian suppliers, freight-in costs and import duties. The cost of sales as a percentage of sales for the year ended December 31, 2020 was 46.7% as compared to 60.7% for the year ended December 31, 2019. The decrease in cost of sales as a percentage of sales was due to the increase in sales through the QVC channel, which has lower costs, However, as discussed below, there are now fulfillment costs associated with sales through the QVC channel that are specific to that sales distribution effort.

 

Officers Compensation

 

Officers compensation for the year ended December 31, 2020 was $415,000 compared to $497,000 for the year ended December 31, 2019, a decrease of $82,000 or 16%. The decrease relates to payments made to other officers in 2019 who were not employed by us in 2020.

 

Effective April 1, 2018, we executed employment agreements with Richard DeCicco, who was then our Chief Executive Officer and Roseann Faltings, our Vice President of Sales and Marketing. Both agreements had a term of 24 months (to March 31, 2020). Mr. DeCicco’s agreement provided for a base salary at the rate of $265,000 per annum and a compensation stock award of 300,000 shares of common stock issuable upon the effective date of a planned reverse stock split, which shares have not been issued. Ms. Faltings’ agreement provided for a base salary at the rate of $150,000 per annum and a compensation stock award of 100,000 shares of common stock also isuable upon the effective date of the planned reverse stock split. Such shares were never issued. For the year ended December 31, 2019, we had accrued a total of $415,000 officers compensation pursuant to the two employment agreements. In 2019, the accrued compensation was allocated 50% to our company ($207,500), 40% to Bellissima ($166,000), and 10% to BiVi ($41,500).

 

Fulfillment Costs

 

We had fulfillment costs of $536,255 for the year ended December 31, 2020 compared to $0 for the year ended December 31, 2019, an increase of $536,255. Fulfilment coats are specifically related to sales made through the QVC Channel and included storage and distribution to the consumer.

 

Royalties

 

We expensed royalties of $497,253, for the year ended December 31, 2020 compared to $198,002 for the year ended December 31, 2019, an increase of $299,251, or 151%. Royalties increased due to primarily to minimum royalties associated with the Hooters product brand.

 

Professional and Consulting Fees

 

Professional and consulting fees expense was $962,481, for the year ended December 31, 2020, compared to $1,260,343, for the year ended December 31, 2019, a decrease of $297,862, or approximately 24%.

 

Professional and consulting fees consist primarily of legal and, accounting and auditing services. The decrease of approximately $297,862 from 2019 to 2020 was related to the acquisition of CANB Corp (“CANB”) in 2019 and related financing activities that did not occur in 2020. We pursued various acquisition opportunities in 2020 that did not result in a completed transaction, which caused our expenses for professional fees to remain at a high level.

 

Marketing and Advertising

 

Marketing and advertising expenses for the year ended December 31, 2020 were $801,445 compared to $512,707 during the year ended December 31, 2019, an increase of $288,738, or 56%. The increase in marketing and advertising expense was primarily related to marketing fees in the QVC sales channel.

 

 
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Travel and Entertainment

 

Travel and entertainment expenses for the year ended December 31, 2020 were $41,208 compared to $319,483 for the year ended December 31, 2019, a decrease of $278,275 or about 87%. The decrease was a result of limited travel during the year ended December 31, 2020 due to the COVID-19 environment.

 

Other Operating Expenses

 

Other operating expenses were $1,462,922 for the year ended December 31, 2020 as compared to $1,019,576 for the year ended December 31, 2019, an increase of $443,346, or approximately 44%. For the year ended December 31, 2020, other operating expenses included investor relations, automobile, insurance, office expenses and expenses relating to Christie Brinkley appearances at Bellissima promotions. In addition, we hired four employees to assist with the planned growth of our company.

 

Net Operating Income/Loss

 

Net operating loss for the year ended December 31, 2020 was $3,198,092 compared to net operating loss of $3,331,297 for the year ended December 31, 2019, a decrease of $133,205. Net operating (loss) decreased , as set forth above, primarily because sales increased, offset by increases in the various expense categories.

 

Loss on investment

 

On July 29, 2020, we executed an Exchange Agreement with CANB and delivered the 543,714 shares of CANB common stock to CANB in exchange for CANB’s delivery to us of 1,000,000 shares of our common stock. The July 29, 2020 closing price of the CANB common stock was $0.95 per share. For the year ended December 31, 2020, we recognized treasury stock in the amount of $516,528 and we recognized a loss of $483,472 from our investment in CANB common stock.

 

Net Loss attributable to Noncontrolling Interests in Subsidiaries and Variable Interest Entity

 

Net loss attributable to noncontrolling interests in subsidiaries and variable interest entity represented 49% of the net loss of Bellissima and BiVi (of which we own 51%) and 100% of United (of which we own 0%) and is accounted for as a reduction in the net loss attributable to our company. Net loss for the year ended December 31, 2020 was $109,962 compared to a net loss of $424,599 for the year ended December 31, 2019, a decrease in the loss of $314,637. Net loss attributable to Iconic Brands decreased during the year ended December 31, 2020 as a result of all the changes discussed above.

 

Loss from Discontinued Operations

 

Effective December 31, 2019, we sold our 51% equity interest in Green Grow Farms, Inc. (“Green Grow”) to Can B Corp. in exchange for 37,500,000 shares of Can B Corp. common stock and a Can B Corp. obligation to issue additional shares (“Additional Purchases Shares”) of Can B Corp. common stock to the Company on June 30, 2020 in such number so that the aggregate value of the aggregate shares issued to the Company equals $1,000,000. We acquired this equity interest on May 9, 2019 in exchange for a $200,000 note payable to NY Farms Group Inc. and 2,000,000 shares of Company common stock valued at $1,250,000

 

The loss from operations during the time of ownership and the subsequent sale of the operation resulted in a loss from discontinued operations of $1,047,213 for the year ended December 31, 2019. There was no loss from discontinued operation for the year ended December 31, 2020.

 

Net Income/Loss

 

Net loss attributable to the Company for the year ended December 31, 2020 was $3,571,602, or $(.22) per share, compared to a net loss of $3,953,911, or $(0.37) per share, for the year ended December 31, 2019, a decrease in the loss of $382,309. Net (loss) decreased, as set forth above.

 

 
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Liquidity and Capital Resources

 

Introduction

 

During the nine months ended September 30, 2021, and September 30, 2020, we had negative operating cash flows. Our cash on hand as of September 30, 2021, was $5,682,650. Our monthly cash flow burn rate for 2021 was approximately $400,000, and our monthly burn rate through the three months ended September 30, 2021 was approximately $800,000. We have strong medium to long term cash needs. We anticipate that these needs will be satisfied through the funding of the second tranche of the equity financing that we entered into on July 26, 2021 until such time as our cash flows from operations will satisfy our cash flow needs.

 

Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2021 and December 31, 2020, respectively, were as follows: (Note that there are significant changes to these balances since December 31, 2020, as a result of the acquisition of TopPop and the full Balance Sheet should be reviewed in conjunction with this table).

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$ 5,682,650

 

 

$ 457,041

 

 

$ 5,225,609

 

Total Current Assets

 

 

12,513,358

 

 

 

1,298,999

 

 

 

11,214,359

 

Total Assets

 

 

54,688,379

 

 

 

1,354,892

 

 

 

53,333,487

 

Total Current Liabilities

 

 

8,941,546

 

 

 

3,183,015

 

 

 

5,758,531

 

Total Liabilities

 

$ 30,418,605

 

 

$ 3,183,015

 

 

$ 27,235,590

 

 

Our cash increased $5,225,609 and total current assets increased $11,214,359. Our total current liabilities increased $6,818,200 as our notes payable and operating lease liabilities increased. Our total liabilities increased $27,235,590 as a result of recognition of contingent payments associated with the TopPop acquisition. Our stockholders’ equity increased from a deficit of $(1,828,123) to $24,269,774 due primarily to recognition of certain intangible assets associated with the TopPop acquisition (see full Balance Sheet for comparison).

 

In order to repay our obligations in full or in part when due, we may be required to raise significant capital from other sources and to execute on our business plans for TopPop. There is no assurance, however, that we will be successful in these efforts. Please see the Risk Factors beginning on page 8 of this prospectus.

  

Cash Requirements

 

Our cash on hand as of September 30, 2021 was $5,682,650. We anticipate that the funding from financing activities and product sales will be enough to sustain us for the next 12 months.

 

Sources and Uses of Cash

 

Operations

 

Our net cash (used in) operating activities for the nine months ended September 30, 2021 and 2020 was $(4,145,906) and $(1,037,220), respectively, an increase of $3,108,686. The increase in cash used in operations was primarily due to increased operating loss.

 

Investments

 

For the nine months ended September 30, 2021, we (used) cash for investing activities of $(4,547,770). This cash was used for the purchase of TopPop and United. For the nine months ended September 30, 2020, we used cash for investing activities of $19,708 for the purchase of furniture and equipment.

 

Financing

 

Our net cash provided from financing activities for the nine months ended September 30, 2021 was $13,919,285 compared to $1,292,390 of cash provided by financing activities for the nine months ended September 30, 2020. The large inflow of cash in 2021 represents the Financing Transaction (detailed herein under “Recent Developments”) on July 26, 2021.

 

 
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Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

 

As of September 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“United States GAAP”). The preparation of these financial statements and related disclosures in compliance with United States GAAP requires the application of appropriate technical accounting rules and guidance as well as the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. The application of these policies involves judgments regarding future events, including the likelihood of success of particular product candidates, regulatory challenges, and the fair value of certain assets and liabilities. These judgments, in and of themselves, could materially affect the financial statements and disclosures based on varying assumptions, which may be appropriate to use. In addition, the financial and operating environment may also have a significant effect, not only on the operation of the business, but on the results reported through the application of accounting measures used in preparing the financial statements and related disclosures, even if the nature of the accounting policies have not changed.

 

On an ongoing basis, we evaluate these estimates, utilizing historic experience, consultation with experts and other methods we consider reasonable. In any event, actual results may differ substantially from our estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the information that gives rise to the revision becomes known.

 

Our significant accounting policies are summarized in Note 2 of the Notes to Consolidated Financial Statements for the years ended December 31, 2020 and 2019 included elsewhere in this prospectus. We identify our most critical accounting policies as those that are the most pervasive and important to the portrayal of our financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain.

 

Recently Issued Accounting Pronouncements

 

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our Consolidated Financial Statements for the years ended December 31, 2020 and 2019. The impact on our financial position and results of operations from adoption of these standards is not expected to be material.

  

 
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BUSINESS

 

Overview

 

We are a lifestyle branding company with expertise in developing, from inception to completion, and branding alcoholic beverages for ourselves and third parties. We market and place products into national distribution through long-standing industry relationships. We believe we are a leader in “Celebrity Branding” of beverages in which we procure superior and unique products from around the world and brand such products with internationally-recognized celebrities. We currently market and sell the following products:

 

 

·

Bellissima Prosecco – these products comprise a line of all-natural and Vegan Prosecco and Sparkling Wine made with organic grapes, including a Zero Sugar, Zero Carb option, a DOC Brut and a Sparkling Rose. The Bellissima line of Prosecco and Sparkling Wines includes two new flavor profiles, a Zero Sugar/Zero Carb Sparkling Rose and a Rose Prosecco; and

 

 

 

 

·

Bella Sprizz Apertifs - these products comprise a line of aperitifs consisting of three different expressions, a classic Italian aperitif, an all-natural elderflower aperitif and a classic Italian bitter.

   

In addition, we also develop and market private label spirits for established domestic and international chains.

 

As a result of our July 2021 acquisition of 100% of the equity of TopPop, we now have a fully vertically-integrated product development and manufacturing company for new alcohol brands. TopPop is a premier contract manufacturing and packaging company that specializes in flexible packaging applications in the food, beverage and health categories. TopPop has the federal and state licenses necessary to manufacture and blend malt, wine and spirits-based products and, in June 2020, it opened a 27,000-square-foot FDA-approved manufacturing facility in Marlton, New Jersey that is registered by the Federal Drug Administration and holds a Safe Quality Food certification. In January 2022, we expect to add another 65,000 square feet of manufacturing capability in New Jersey.

 

For its first product line, TopPop identified the single serve, ready-to-drink (“RTD”) and ready-to-freeze (“RTF”) segments as ripe for product and packaging innovation. TopPop introduced an alcohol-infused ice pop in June 2020, and marketed the concept to major alcohol companies. In addition, it developed its own product line. Despite launching during the COVID-19 pandemic, TopPop manufactured approximately 10 million ice pops during the year ended December 31, 2020 and approximately 36 million ice pops during the nine-month period ending September 30, 2021. TopPop has also developed a robust pipeline in the single serve, RTD alcohol cocktail market and anticipates launching a line of products in this market in 2022. TopPop designs and markets flexible packaging for its RTD and RTF products with formulations that are low calorie and contain healthy and natural ingredients. With the opening of TopPop’s new facility expected in January 2022, we expect to have the capacity to manufacture over 150 million units in 2022.

 

We believe our TopPop acquisition has brought us additional synergies and opportunities for cross-promoting new and existing products to a broader customer base and positions our company, including our wholly owned subsidiary TopPop, as a company that establishes and supports brands, innovates, produces, licenses, packages and sells alcohol and non-alcohol beverages and creates sustainable packaging solutions to the consumable goods market. Our focus on lifestyle branding and the rising “Better-for-You”, “Better-for-Planet” consumer category has made us a leader in developing celebrity brands worldwide such as its Bellissima Prosecco by Christie Brinkley. TopPop is a pioneer in flexible packaging. The company’s creative solutions from inception to full scale production, like its RTF alcohol ice pops, make it a harbinger in the “pouch market”, one of the fastest growing segments of the beverage industry. TopPop’s proprietary and visionary applications has made the company a leader in providing these increasingly desirable products and services, from “design through delivery”, to some of the largest Fortune 500 and multinational alcohol beverage companies and brands today.

 

Our mission is to be an industry leader in the brand development, marketing and sales of alcoholic beverages and related products by capitalizing on our ability to procure products from around the world and to develop unique and innovative packaging to create brand and product line extensions. We plan to leverage our relationships with internationally-recognized celebrities to add value to products and create brand awareness in unbranded niche categories.

 

Brands and Products

 

Bellissima Prosecco and Sparkling Wines

 

We market and sell a line of all-natural and vegan Prosecco and Sparkling Wines made with organic grapes, including a Zero Sugar, Zero Carb option, a DOC Brut and a Sparkling Rose. We market and sell these products under the Bellissima brand name pursuant to a license agreement entered into between our Bellissima Spirits LLC (“Bellissima Spirits”) subsidiary, and Christie Brinkley, Inc., an entity owned by supermodel and entrepreneur Christie Brinkley (“CBI”), on November 12, 2015, which agreement was amended effective June 30, 2017 (the “Bellissima Agreement”). During her illustrious career, Christie Brinkley has appeared on over 500 magazine covers worldwide, served as a spokeswoman for CoverGirl, and performed on Broadway, in television and in film.

 

 
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The Bellissima products are produced at a winery located in Treviso, Italy. Bellissima’s winery partners manage the procurement of all raw materials required to produce a finished product of either the DOC Brut, Sparkling Rose, Pinot Grigio and our Zero Sugar, Zero Carb sparkling wine expression.

 

Bella Sprizz Aperitifs

 

We have also developed, and now market and sell, a line of aperitifs in partnership with Christie Brinkley under the brand name Bella Sprizz. This line of aperitifs consists of three different expressions, a classic Italian aperitif typically used in making a “Spritz,” or as we prefer to say “Sprizz.” The second product in the line is an all-natural elderflower aperitif that may be added as a component to a consumer’s favorite cocktail or simply added to another spirit, such as a glass of our Bellissima Zero Sugar. We also offer “Bella Bitter,” a classic Italian bitter that can be served over ice with a garnish, such as a squeeze of a fresh orange, or added as a component in making a superior Negroni, a popular Italian cocktail.

 

BiVi Vodka

 

We have also developed and intend to relaunch a Vodka product under the brand “BiVi 100 percent Sicilian Vodka.” We intend to market and sell this product pursuant to a License Agreement entered into between our BiVi LLC (“BiVi”) subsidiary, and Neighborhood Licensing, LLC (“Neighborhood Licensing”), an entity owned by Chazz Palminteri. Chazz Palminteri is an American actor, screenwriter, producer and playwright who has performed on Broadway, in television and in film. He is best known for his Academy Award-nominated role for Best Supporting Actor in Bullets over Broadway, the 1993 film A Bronx Tale, based on his play of the same name.

 

BiVi Vodka is made from semolina wheat grown out of the rich volcanic soil and pure mountain spring water of Sicily and is the creation of Master Distiller Giovanni La Fauci.

 

Private Label Manufacturing and Distribution

 

In addition to developing celebrity brands, we develop and supply national restaurant chains, consumer good companies, and national retailers with high-quality, private label products. We believe that private labeling presents a significant opportunity for growth of our business. We provide full-service, turnkey private labeling-enabled expertise in product sourcing, product development, brand development, marketing and distribution.

 

We market and sell a line of private-label premium spirits under the Hooters brand, including Vodka, Gin, Rum (Dark & Light), Tequila (Silver & Gold), American Whiskey and Hooters Heat Cinnamon Whiskey. However, we market and sell these products pursuant to an agreement that is being terminated and we are currently in discussions with Hooters of America, LLC regarding our future relationship, if any, with Hooters.

  

TopPop is also launching its own brand of RTF products under the name BoozyPopz® using an e-commerce distribution channel.

 

Flexible Packaging

 

Our recently-acquired TopPop subsidiary specializes in flexible packaging for alcohol products as an alternative to cans and bottles. We believe the trend in beverage, liquid and lotion packaging has been to move away from bottles and cans and toward flexible stand-up pouches. In particular, beverage brands continue to develop packaging with the objective of accentuating the entire experience of the consumer associated with holding, opening, drinking and enjoying beverages. We believe flexible packaging offers numerous benefits in the marketing, packaging and distribution of alcohol. In addition, we believe flexible, stand-up pouches create design opportunities to have the package stand out and appeal to consumers.

 

 
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The key advantages of flexible packaging over cans and bottles for alcohol products include the following:

 

 

·

Barrier Protection - Barrier material used in specialized alcohol pouches provides an oxygen barrier with a longer shelf life.

 

 

 

 

·

Product Differentiation - Disruptive marketers can use standout packaging formats to differentiate themselves from long-established brands in traditional containers. New pouches developed specifically for the alcohol sector can provide greater stability and offer better shelf presence in stores.

 

 

 

 

·

Millennial and Gen Z Appeal - Flexible packaging has been shown to appeal to millennials and Gen Zers due to the increased portability and reduced weight.

 

 

 

 

·

Sustainability - Pouches offer an estimated 80-85% reduction in carbon footprint compared to glass. Pouches also compare favorably compared to cans, as they easily can be flattened and recycled after the liquid is consumed, unlike cans, which must be crushed and recycled in trash cans or recycling bins.

 

 

 

 

·

Supply Chain Efficiency - Reduced packaging material also has a ripple effect on the supply chain, with less space needed to store and transport the product, which improves total supply chain efficiencies and costs.

  

TopPop also has other initiatives in place regarding recycling for its product packages and continues to work with vendors toward increasingly sustainable solutions.

 

Industry Overview

 

According to Statista, a leading research firm for a number of consumer goods markets, the U.S. alcoholic beverages market was valued at approximately $255 billion in 2021 and is expected to grow by 5.92% annually between 2021 and 2025. Recent market data shows that from 2011 to 2019, sales increased by 30%, with an average increase of roughly 4.3% annually. Much of this growth is attributed to a shift toward spirits; the sales of the spirits category have increased substantially since 2018, averaging over 13% sales growth per year.

 

According to Euromonitor International, a leading provider of global business intelligence, market analysis and consumer insights, in 2019, the “high end” and “super premium” categories experienced larger sales growth than the “premium” and “value” categories. Within the wine category, there has been a shift in consumer behavior towards Sparkling Wine and Rosé. Prosecco and Sparkling Rosé in particular have seen high growth rates.

 

This shift in consumer behavior toward premium offerings, sparkling wines and seeking new experience continued in 2020 and is forecast to continue in the next years. Despite a challenging COVID-19 environment, the alcohol e-commerce industry is seeing continued growth. According to IWSR, a leading source of data and research on the global beverage alcohol market, U.S. alcohol e-commerce approached approximately $5.6 billion in 2020, up from roughly $3 billion in 2019. This growth was largely driven by the omni-channel segment as supermarkets and traditional retailers have sought to rapidly enhance their online offering.

 

According to Euromonitor Internationals, starting in 2021, the alcoholic drinks market will begin to recover after the pandemic effect on 2020 sales. Spirits are expected to see a return to positive growth in 2021. Compared to previous years, more consumption occasions will remain in the home, and e-commerce sales will continue growth. Within the wine category, sparkling wine is expected to record the highest total volume compound annual growth rate (CAGR), signaling that this category will be well positioned for recovery post-COVID-19.

 

According to Beverage Daily, new young consumers are looking for ethical brands that address causes they care about, which often includes the planet, animals welfare and social inclusivity, among others.

 

 
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In addition, the direct-to-consumer channel is predicted to grow by nearly $3 billion in value between 2019 and 2024, at a CAGR of 24% over the five-year period, according to IWSR.

 

RTF adult ice pops and RTD single-serve cocktails are a fast-growing segment in the alcohol beverage industry and have grown in popularity in recent years. According to Grand View Research, the global RTD cocktails market size was valued at over $700 million in 2020 and is expected to grow at a CAGR of 12% from 2021 to 2028.

 

Currently, the celebrity-branded alcoholic beverage industry is a largely consolidated industry, in which the largest companies control a significant portion of industry revenues. This includes existing distillery companies that use their own liquor and parent brands to promote their products. These companies have a significant advantage over smaller industry participants because they already have large bottling facilities and established brands.

 

Industry market share has also increased slightly during recent years as larger companies acquired smaller firms. For example, Sammy Hagar sold an 80% stake to Gruppo Campari for $80 million, Bethenny Frankel sold her Skinny Girl Cocktail brand to Fortune Brands’ Beam Global for an estimated $100 million in 2011, and George Clooney sold his tequila company to Diageo for approximately $1 billion.

 

Entrants and products in the celebrity-branded alcoholic beverage industry include, but are not limited to, Casamigos Tequila and George Clooney (2013), Ciroc Vodka and Sean Combs (2007), Skinnygirl Margarita and Bethenny Frankel (2011) and Cabo Wabo Tequila and Sammy Hagar (1996).

 

Given the trends discussed above, we believe that there is a substantial opportunity in this market due to the rising popularity of celebrity-branded alcoholic beverages.

 

Sales and Marketing

 

We intend to utilize the strength of our management team and industry consultants to focus on brands that will consistently meet the needs of customers and consumers around the world. We aim to gain brand loyalty by partnering with well-known iconic celebrities and/or national chains, such as we have with Christie Brinkley, and have in the past with Chazz Palminteri, Chase Elliott and Hooters. We also intend to engage in targeted and national advertising and promotional campaigns, host celebrity and other sponsored events, and to offer distribution incentives. We hope to attain national exposure in order to drive both awareness and sales of our products in their markets. In addition, we expect that on and off-premise promotions, led by our sales management team, will pay off in increased awareness and higher sales.

 

We intend to kick off promotional campaigns with launch parties, supported by on-premise samplings, contests, on and off-premise giveaways, as well as social media campaigns, the launch of additional bottle sizes, and specialty drinks and menus. Product brochures, press kits, signage, banners, public relations, product placement, sponsorships and internet-based marketing will also be utilized to maximize brand exposure and awareness.

 

Examples of some of our promotional activities have included:

 

 

·

In February 2020, Christie Brinkley hosted a series of Après Ski events at The Snow Lodge in Aspen, CO (starting on February 14, 2020 - Valentine’s Day). The events included an ice bar and featured Bellissima Prosecco and Sparkling Wines, wines made with organic grapes, with Bambinis (375ml) available in all three expressions. In addition, the highlight of the evening series showcased Bellissima’s partner, Christie Brinkley, as their celebrity mixologist throughout the evening;

 

 

 

 

·

Hooters Spirits launched its premium line of alcohol beverages in August 2019 with first tastings taking place in and around Bristol, Tennessee. The No. 9 Hooters Spirits Chevrolet show car was at each event with the world-famous Hooters Girls on-site taking pictures with customers and fans. The debut events led up to the 2019 NASCAR Cup Series Bass Pro Shops 500 on August 17, 2019 at Bristol Motor Speedway, where Chase Elliott drove the Hendricks Motorsports No. 9 Hooters Spirits Chevrolet Camaro ZL1 1LE to a top-five finish; and

 

 

 

 

·

We have in the past also supported the rollout of the Hooters product line with marketing initiatives to help raise awareness of the brand, both inside and outside of the Hooters restaurants, which included event launches, contests and giveaways, such as an autographed Chase Elliott No. 9 Hooters Spirits Chevy Camaro ZL1 diecast giveaway.

 

 
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We also plan to participate in consumer trade shows where wholesalers and retailers are also invited. This will allow our sales team to meet with many of the wholesalers and retailers who are otherwise hard to reach. Advertising and promotion will also be achieved through staff training of on-premise locations; bartenders and wait-staff will be trained to fully understand our products and market them to customers. Incentives will then be offered to motivate sales efforts.

 

Since public relations activity can be used as an effective promotional tool to promote brands, we plan to participate in high-profile public events to create an affinity for our brands that will resonate with their target markets, help build brand loyalty and ultimately drive sales. Among the numerous high-profile promotional and sampling campaigns that we have hosted are events at NASCAR races and events at selected Hooters locations for The College Football National Championship Game.

 

TopPop has engaged a major marketing agency to promote its RTD and RTF products in flexible packaging to sports and entertainment and venues.

 

Finally, we plan to engage in direct-to-consumer sales events, such as sales through QVC or websites.

 

Licensing Agreements

 

Bellissima Prosecco and Sparkling Wines

 

We market and sell our Bellissima Prosecco and Sparkling Wine products pursuant to the Bellissima Agreement. Under the Bellissima Agreement, we were granted the right to use Christie Brinkley’s endorsement, signature and other intellectual property in connection with the sale of the products. We have agreed to guarantee certain of the obligations of Bellissima Spirits under the Bellissima Agreement and to indemnify CBI and Christie Brinkley against third-party claims.

 

Pursuant to the Bellissima Agreement, Bellissima Spirits is obligated to pay CBI a royalty fee equal to 10% of monthly gross sales (12.5% for sales in excess of defined Case Break Points) of Bellissima brand products payable monthly. CBI has the right to terminate the endorsement if Bellissima Spirits fails to sell as least 20,000 cases each year. In addition, upon a liquidity event of either Bellissima or our company, CBI is entitled to 22.5% of, in the case of Bellissima, the net proceeds generated from such liquidity event, in the case of our company, amount equal to 22.5% of the appraised value of Bellissima. For purposes of such agreement, the term “liquidity event” means generally, any of the following:

 

 

·

a sale of all or substantially all of the assets of Bellissima or our company;

 

·

a change of control of Bellissima or our company;

 

·

a sale of equity following which the members of Bellissima or the stockholders of our company, immediately prior to such transaction do not own, immediately following such transaction, a majority of the voting and economic rights in Bellissima or our company; or

 

·

a merger, consolidation or similar transaction involving Bellissima or our company, following which the members of Bellissima or the stockholders of our company, immediately prior to such transaction do not own, immediately following such transaction, a majority of the voting and economic rights in Bellissima or our company.  

      

On October 23, 2019, United entered into a Marketing and Order Processing Services Agreement (the “Marketing Agreement”) with QVC, Inc. (“QVC”) pursuant to which United granted to QVC an exclusive worldwide right to promote the Bellissima products through direct response television programs. The initial license period commenced on October 23, 2019 and expires on December 4, 2021. Unless either party notifies the other party in writing at least 30 days prior to the end of the initial license period or any renewal license period of its intent to terminate the Marketing Agreement, the license continually renews for additional two-year periods. The Marketing Agreement provides for United’s payment of “Marketing Feed” (payable no less than monthly) to QVC in amounts agreed to between United and QVC from time to time.

 

 
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BiVi Vodka

 

We intend to relaunch, market and sell our BiVi Vodka product in 2021, pursuant to a license agreement entered into between our subsidiary, BiVi, and Neighborhood Licensing, LLC (“Neighborhood Licensing”), an entity owned by Chazz Palminteri on May 26, 2015 (the “BiVi Agreement”). Under the BiVi Agreement, we were granted the rights to Palminteri’s endorsement, signature and other intellectual property in connection with the sale of the products. Pursuant to the BiVi Agreement, BiVi is obligated to pay Neighborhood Licensing a royalty fee equal to 5% of monthly gross sales of BiVi Brand products payable monthly subject to an annual minimum royalty fee of $100,000 in year 1, $150,000 in year 2, $165,000 in year 3, $181,500 in year 4, $199,650 in year 5, and $219,615 in year 6 and each subsequent year. Under a Waiver Agreement signed on September 16, 2020, Neighborhood Licensing has agreed to waive the payment of all such minimum royalties under the BiVi Agreement until such time as Neighborhood Licensing agrees to reinstate the minimum royalties pursuant to the terms of the BiVi Agreement. We have agreed to guarantee and act as surety for BiVi’s obligations under certain sections of the BiVi Agreement and to indemnify Neighborhood Licensing and Chazz Palminteri against third party claims.

 

Distribution

 

Private Label

 

Prior to our acquisition of United in July 2021, we marketed and sold our private label Hooters products pursuant to a marketing and distribution agreement entered into between us and United, effective as of April 1, 2019. Under such agreement, we had been granted the exclusive right to market and distribute the Hooters Spirits products line to (a) “Hooters” branded restaurants; (b) liquor distributors; and (c) off-premise, retail establishments (with all sales being made through distributors licensed to conduct business in the state of such sale) in the United States, Europe and Asia for a period of five years. The agreement provided for United to receive a fee of $1.00 per case of product sold to any wholesaler for retailer distribution.

 

United obtained the rights to manufacture, market, distribute and sell certain alcoholic products bearing the Hooters trademarks in North America, Europe, Asia and Australia pursuant to a brand licensing agreement that it had entered into with Hooters on July 23, 2018 (the “Hooters Agreement”). Pursuant to the Hooters Agreement, United was granted a non-exclusive license to use the “Hooters” trademarks to manufacture, market, distribute and sell certain alcoholic products bearing the Hooters trademarks in North America, Europe, Asia and Australia for a period that expired on December 31, 2020. The Hooters Agreement could have been extended by up to an additional three years by United provided that it was not in breach of the agreement and that certain minimum royalty fees were paid for the extension - $315,000 for 2021, $360,000 for 2022 and $420,000 for 2023. We are currently in discussions with Hooters regarding an extension of the Hooters Agreement or certain other business relationships. Under the Hooter’s Agreement, United paid Hooters an advance of $30,000, and agreed to pay royalties to Hooters of 6% of net sales (as defined) of all products during the term. In addition, the agreement also provided for United’s payment of a marketing contribution equal to 2% of the prior year’s net sales of the licensed products. If United failed to spend the required marketing contribution in any calendar year, the deficiency would be paid to Hooters.

 

By law, United can only sell our alcoholic products to licensed United States wholesalers or distributors. Wholesalers and distributors then sell the product to licensed retailers for “on” or “off” premise consumption. An “on” premise retailer is an establishment where the alcohol is consumed, such as a bar or restaurant, and an “off” premise retailer is an establishment where alcohol is sold for consumption elsewhere, such as a liquor store or, in some state, a supermarket. Accordingly, our products are shipped to the United States by United either directly to its distributors or to United’s warehouse. Products that are shipped to United’s warehouse are then shipped via ground freight to wholesalers or distributors to fulfill orders as they are placed.

 

TopPop is currently in negotiations with global alcohol beverage companies, including two of the five largest beer producers in the world, to license some of their brands for use by TopPop in the development and sale of new RTD and RTF products.

 

 
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Intellectual Property

 

We have registered trademarks in the United States associated with our BiVi and Bella Sprizz brands or products. In addition, Richard DeCicco, our Chairman of the Board and President, owns the rights to a trademark depicting an image of the Botticelli Venus that is used on certain or our Bellissima and Bella Sprizz products. We use that trademark with the permission of Mr. DeCicco.

 

Our other brands, such as Bellissima Prosecco and Sparkling Wines or Hooters branded spirits, are either protected under trademarks owned by the licensors or under common law use, and we use them with the licensors permission pursuant to the agreements that we or our subsidiaries have entered into with them.

 

We intend to apply for new trademarks on an ongoing basis as we develop new brands or products. We regard our trademarks, service marks, copyrights, domain names, trade dress, and similar intellectual property as very important to our business.

 

We enforce and protect our trademark rights against third parties infringing or denigrating our trademarks by opposing registration of infringing trademarks, and initiating litigation as necessary.

 

Competition

 

The beverage alcohol industry is highly competitive. We compete on the basis of quality, price, brand recognition and distribution strength, as well as providing consumers with unique brands with special attributes that set our brands apart from the rest. Our beverage alcohol products compete with other alcoholic and non-alcoholic beverages for consumer purchases, as well as shelf space in retail stores, restaurant presence and wholesaler attention. We compete with numerous multinational producers and distributors of beverage alcohol products, some of which have greater resources than we do. Our competitors include, but are not limited to, Gallo, Mionetto, Gruppo Campari, Constellation Brands, William Grant and Sons and Jim Beam Brands.

 

As TopPop products are relatively new in the marketplace, there is not yet significant competition in the manufacturing and sale of such products to or for the account of third parties. We expect competition to intensify with the expected increase in the popularity of RTD and RTF products in flexible packaging.

 

Governmental Regulation of the Wine and Spirits Industry

 

The production and sale of malt, wine and spirits is subject to extensive regulation by the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau and state liquor commissions and agencies.

 

In addition, most states in which our products are sold impose varying excise taxes on the sale of alcoholic beverages. Prompted by growing government budget shortfalls and public reaction against alcohol abuse, government entities often consider legislation that could potentially affect the taxation of alcoholic beverages. Excise tax rates being considered are often substantial. The ultimate effects of such legislation, if passed, cannot be assessed accurately. Any increase in the taxes imposed on our products can be expected to have a potentially adverse impact on overall sales of such products. However, the impact may not be proportionate to that experienced by distributors of other alcoholic beverages and may not be the same in every state.

 

The agreements we have in place with United and Dan Kay International provide the required licensing conduits that allow us to capture the sales relative to alcoholic beverages in the United States. The United States alcohol beverage business is based upon what is known as a “three-tier system.” The three tiers consist of an import or supplier tier if the product is domestically produced. The second tier is the wholesale tier. The third tier is known as the retail tier, consisting of an on and off premise split. The import/supply tier sells to the wholesale tier that then sells to the retail tier.

 

We possess the import/supply tier licensing as well as the required licenses in the states in which we sell alcoholic beverages to the wholesale tier. Prior to our recent acquisition of United, we had contracted with United to facilitate the sales of our products using the licensing United has in place. This is a common third party provider relationship in the United States alcohol beverage business.

 

 
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We contract with Dan-Kay International (an entity controlled by Richard DeCicco) for warehousing services for the alcohol beverage products that come to rest in the United States. Dan-Kay maintains a required New York State warehousing license. This license has a level allowing the third-party warehousing classified as “product of others.”

 

Employees

 

As of September 30, 2021, we employed a 36 full-time employees and six consultants. Of our full-time employees at that date, 10 were in corporate administration, 9 were in marketing and sales, 17 were in production and distribution. We are not a party to any collective bargaining agreements. We believe that we maintain good relations with our employees.

  

Properties

  

On January 1, 2021, we executed a cancellable lease agreement with Day Kay International for the lease of our office and warehouse space in North Amityville New York. The agreement has a term of three years from January 1, 2021 to January 1, 2024 and provides for monthly rent of $4,893.

    

We have also entered into a lease agreement with our two officers to use part of their residence in Copiague, New York for Company office space. The agreement has a term of three years from January 1, 2019 to December 31, 2021 and provides monthly rent of $3,930. We do not intend to renew the lease upon expiration on December 31, 2021.

 

In addition, TopPop has executed a lease agreement to rent approximately 26,321 square feet of warehouse space in Marlton, NJ. The lease provides a term of five years commencing upon January 1, 2020 and terminating on December 31, 2024. The lease also provides for a monthly payment for common area use of $4,430 and a security deposit of $45,864.

 

Effective November 6, 2020, TopPop executed a lease agreement to rent approximately 14,758 square feet of warehouse space in Bellmawr, NJ. The lease provides for a lease term of two years commencing on December 1, 2020 and terminating on November 30, 2022. The lease provides for a security deposit of $20,734.

 

Legal Proceedings

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

 

Corporate History

 

We were incorporated in the State of Nevada on October 21, 2005 (under the name Paw Spa, Inc.). On May 7, 2009, we changed our name to Iconic Brands, Inc.

 

Effective December 31, 2016, we closed on (i) a May 15, 2015 agreement to acquire a 51% interest in BiVi LLC. and (ii) a December 13, 2016 agreement to acquire a 51% interest in Bellissima Spirits LLC. These transactions involved entities under common control of our Chief Executive Officer and represented a change in reporting entity.

 

BiVi LLC was organized under the laws of the State of Nevada on May 4, 2015 and Bellissima Spirits LLC was organized under the laws of the State of Nevada on November 23, 2015.

 

On July 26, 2021, we acquired 100% of the equity of TopPop LLC, a limited liability company organized under the laws of the State of New Jersey on September 5, 2019.

    

 
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DIRECTORS AND EXECUTIVE OFFICERS

 

The following table sets forth the names, ages and biographical information of each of our current directors and executive officers, and the positions within our company held by each person. Our directors serve a one-year term until their successors are elected and qualified, or until such director’s earlier death, resignation or removal. Our executive officers are appointed annually by our board of directors and serve at the pleasure of our board.

 

Name

 

Age

 

Position(s)

Larry Romer

 

68

 

Chief Executive Officer

Richard DeCicco

 

63

 

President and Chairman of the Board of Directors

David Allen

 

66

 

Chief Financial Officer

John Cosenza

 

53

 

Chief Operating Officer

Tom Martin

 

62

 

President and Chief Operating Officer of TopPop LLC

Roseann Faltings

 

63

 

Director

   

Larry Romer has served as our Chief Executive Officer since July 2021. Mr. Romer is a 40 plus year veteran of the beverage business holding senior management positions with The Coca-Cola Bottling Company of New York, The Paddington Corporation, Jim Beam Brands Company and Southern Glazer’s Wine and Spirits, LLC. From 2005 until March 2021, Mr. Romer was Senior Vice President and General Manager of the Sapphire Division at Southern Glazer’s Wine and Spirits, LLC. Prior to his employment at Southern Glazer’s Wine and Spirits, LLC, from 1993 until 2005, Mr. Romer was Regional Vice President of Jim Beam Brands Company. From 1985 until 1993, Mr. Romer was State Manager and Regional Vice President of The Paddington Corporation. Prior to The Paddington Corporation, from 1976 until 1985, Mr. Romer was a District Manager at The Coca-Cola Bottling Company of New York. Mr. Romer holds a bachelor’s degree in Health and Physical Education from Manhattan College and a master’s degree in Health and Physical Education from Adelphi University.

 

Richard DeCicco has served as our Chief Executive Officer, President and member our board since 2007. With over 43 years of experience in the global liquor industry, Mr. DeCicco has been a senior executive and a leader in the wine and spirits industry. Previously, Mr. DeCicco served as President of Harbrew Imports Ltd. since its inception in 1999. From September 1997 until 1999, Mr. DeCicco was a consultant for individuals entering the alcohol beverage business. From May 1990 until  September 1997, Mr. DeCicco was the Chief Executive Officer and President of Harbor Industries, a production facility. In addition to having been the national provider for The Paddington Corporation brands from 1990 to 1997, Mr. DeCicco pioneered what is now known within the field as Value Added Packaging. We believe Mr. DeCicco is qualified to serve as a member of our board because of his experience in and relationships within the industry. Mr. DeCicco is the President of United Spirits Inc.

  

John Cosenza has served as our Chief Operating Officer since July 2021, and prior to that was employed by us in an advisory role since April 2021. Mr. Cosenza started his career at Anheuser-Busch (“AB”) in April 2000 as Senior Corporate Social Responsibility Manager, until December 2008. From January 2009 until February 2010, Mr. Cosenza served as District Manager at AB. From February 2021 then served as Category Manager at AB from February 2020 until March 2021. Mr. Cosenza has an MBA in finance from Long Island University, and a bachelor’s degree in Sports Management and Athletic Administration from St. John’s University.

 

David Allen has served as our Chief Financial Officer since July 2021. Mr. Allen has over 22 years of experience serving as the chief financial officer of public companies and over 40 years of experience as a certified public accountant, starting his career with Arthur Andersen & Co. Mr. Allen has served as our Chief Financial Officer since July 2021. Prior to Charlie’s Holdings, Inc., he served as Chief Financial Officer of Charlies Holdings, Inc. from April 2019 to May 2021 (OTC: CHUC) . Prior to that, from December 2014 until January 2018, Mr. Allen served as the Chief Financial Officer of WPCS International, Inc. (NASDAQ: WPCS). From 2007 to 2013, Mr. Allen served as the Chief Financial Officer and Executive Vice President of Administration at Converted Organics, Inc. (NASDAQ: COIN). From 1999 to 2004 he served as Chief Financial Officer, and later Chief Executive Officer, of Milbrook Press, Inc. (NASDAQ: MILB). During the periods not listed above, Mr. Allen held various consulting roles at both public and private companies. Additionally, Mr. Allen has been a member of the board of directors and the Chairman of the Audit Committee of Marimed, Inc. (OTC: MRMD) since June 2019, and was a member of the board of directors and Chairman of the Audit Committee of Charlie’s Holdings, Inc. (OTC: CHUC) from May 2021 until October 2021. From 2004 to 2017, Mr. Allen served as Chief Financial Officer of Bailey’s Express, Inc., a privately held trucking corporation, which filed for Chapter 11 bankruptcy in July 2017; he served as the Chapter 11 Plan Administrator for the bankruptcy case from inception until the case was finalized in December 2020. Mr. Allen is a licensed CPA and holds a bachelor’s degree in accounting and a master’s degree in taxation from Bentley College.

 

Tom Martin was a co-founder of TopPop and has been its President and Chief Operating Officer since its incorporation in 2019. Mr. Martin has been in the primary and secondary packaging industry for over 40 years. From 1991 to 1997, Mr. Martin served as Director for the printing, contract packaging and machine groups at Sancoa International. In 1997, he co-founded Slate Packaging, where he served as President and Chief Executive Officer until 2005, where he built a printing, equipment and contract packaging business that was later sold to a large Kansas City printing company. From 2005 to 2012, Mr. Martin was an Executive Vice President at Klocke of America, a food, cosmetic and health care contract manufacturing business. From 2012 to 2019, he was employed at Universal Synergetic dba THEM of NJ, as Vice President and General Manager, where he produced ready-to-use, single-format retail food, beverage, liquor and cosmetic products.  Mr. Martin holds an AAS degree in Engineering from Rutgers University in Camden, New Jersey.

    

Roseann Faltings has served as a member of our board of directors since May 2015 and as an officer since 2003, most recently as our Vice President of Celebrity Partnership Relations. Ms. Faltings is an international liquor industry veteran of more than 18 years with experience in brand development, marketing, sales and distribution across the beer, wine and spirits categories. Throughout her executive career, Ms. Faltings has worked on United Spirits’ brand portfolio, including Bellissima by Christie Brinkley, as well as Danny DeVito’s Premium Limoncello, Yanjing Beer (the national beer of China), Johnny Bench 5 Scotch Whisky and other private label products. Ms. Faltings was Director of Sales and Marketing of Harbrew Imports Ltd., a predecessor of Iconic, beginning in 2003 until 2005. In 2005, Ms. Faltings was appointed VP of Sales and Marketing of Iconic and served as a Vice President since that time. Ms. Faltings received her bachelor’s degree in Business Administration from New York Institute of Technology. We believe Ms. Faltings is qualified to serve as a member of our board because of her marketing and executive management expertise within our industry and her strong relationships within the U.S. distribution and wholesale supply chain.

 

 
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Family Relationships

 

Richard DeCicco and Roseann Faltings live in the same household, but are not married.

 

Arrangements between Officers and Directors

 

Except as set forth herein, to our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which the officer or director was selected to serve as an officer or director.

 

Involvement in Certain Legal Proceedings

 

We are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation S-K.

 

Committees of Our Board of Directors

 

Our board of directors does not maintain a separate audit, nominating and corporate governance or compensation committee. Functions customarily performed by such committees are performed by our board of directors as a whole. We do not currently have an “audit committee financial expert” since we currently do not have an audit committee.

 

Code of Ethics

 

We have not adopted a written code of ethics, primarily because we believe and understand that our officers and directors adhere to and follow ethical standards without the necessity of a written policy. Our business operations are not complex and are very limited. We seek advice and counsel from outside experts such as our lawyers and accountants on matters relating to corporate governance and financial reporting. As our business has expanded through the acquisition of TopPop in July 2021, we expect to adopt a written code of ethics in 2022.

 

 
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EXECUTIVE COMPENSATION

 

Summary Compensation Table

 

The following table sets forth the compensation paid or accrued during the fiscal years ended December 31, 2020 and 2019 to our principal executive officer and one additional officer (collectively, the “named executive officers”). We had no other executive officers during such fiscal years.

 

Name and Principal Position

 

Year

 

Salary ($)

 

 

Total ($)

 

Richard DeCicco,

 

2020

 

 

265,000

 

 

 

265,000

 

Chief Executive Officer, Chief Financial Officer and President(1)

 

2019

 

 

265,000

 

 

 

265,000

 

Roseann Faltings,

 

2020

 

 

150,000

 

 

 

150,000

 

Vice President

 

2019

 

 

150,000

 

 

 

150,000

 

 

 

(1)

Mr. DeCicco resigned the positions of Chief Executive Officer and Chief Financial Officer on July 26, 2021 in connection with our acquisition of TopPop and the completion of our financing and restructuring transactions that were consummated on such date. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments.”

   

2021 Long-Term Incentive Plan

 

On August 16, 2021, our board of directors adopted our 2021 Long-Term Incentive Plan (the “2021 Incentive Plan”) to provide an additional means to attract, motivate, retain and reward selected employees and other eligible persons. Our stockholders approved the plan on or about August 16, 2021. Employees, officers, directors and consultants that provide services to us or one of our subsidiaries may be selected to receive awards under the 2021 Incentive Plan.

  

Our board of directors, or one or more committees appointed by our Board or another committee (within delegated authority), administers the 2021 Incentive Plan. The administrator of the 2021 Incentive Plan has broad authority to:

 

 

·

select participants and determine the types of awards that they are to receive;

 

 

 

 

·

determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) to be paid for the shares or the award and establish the vesting conditions (if applicable) of such shares or awards;

 

 

 

 

·

cancel, modify or waive our rights with respect to, or modify, discontinue, suspend or terminate any or all outstanding awards, subject to any required consents;

 

 

 

 

·

construe and interpret the terms of the 2021 Incentive Plan and any agreements relating to the 2021 Incentive Plan;

 

 

 

 

·

accelerate or extend the vesting or exercisability or extend the term of any or all outstanding awards subject to any required consent;

 

 

 

 

·

subject to the other provisions of the 2021 Incentive Plan, make certain adjustments to an outstanding award and authorize the termination, conversion, substitution or succession of an award; and

 

 

 

 

·

allow the purchase price of an award or shares of our common stock to be paid in the form of cash, check or electronic funds transfer, by the delivery of previously-owned shares of our common stock or by a reduction of the number of shares deliverable pursuant to the award, by services rendered by the recipient of the award, by notice and third party payment or cashless exercise on such terms as the administrator may authorize or any other form permitted by law.

 

 
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A total of 20,000,000 shares of our common stock are authorized for issuance with respect to awards granted under the 2021 Incentive Plan. Any shares subject to awards that are not paid, delivered or exercised before they expire or are cancelled or terminated, or fail to vest, as well as shares used to pay the purchase or exercise price of awards or related tax withholding obligations, will become available for other award grants under the 2021 Incentive Plan. As of the date of this prospectus, stock option grants to purchase an aggregate of 7,408,200 shares of common stock have been made under the 2021 Incentive Plan and 12,591,800 shares authorized under the 2021 Incentive Plan remain available for award purposes.

  

Awards under the 2021 Incentive Plan may be in the form of incentive or nonqualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards. The administrator may also grant awards under the plan that are intended to be performance-based awards within the meaning of Section 162(m) of the U.S. Internal Revenue Code. Awards under the plan generally will not be transferable other than by will or the laws of descent and distribution, except that the plan administrator may authorize certain transfers.

 

Nonqualified and incentive stock options may not be granted at prices below the fair market value of the common stock on the date of grant. Incentive stock options must have an exercise price that is at least equal to the fair market value of our common stock, or 110% of fair market value of our common stock in the case of incentive stock option grants to any 10% owner of our common stock, on the date of grant. These and other awards may also be issued solely or in part for services. Awards are generally paid in cash or shares of our common stock. The plan administrator may provide for the deferred payment of awards and may determine the terms applicable to deferrals.

 

As is customary in incentive plans of this nature, the number and type of shares available under the 2021 Incentive Plan and any outstanding awards, as well as the exercise or purchase prices of awards, will be subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the stockholders. In no case (except due to an adjustment referred to above or any repricing that may be approved by our stockholders) will any adjustment be made to a stock option or stock appreciation right award under the 2021 Incentive Plan (by amendment, cancellation and re-grant, exchange or other means) that would constitute a repricing of the per-share exercise or base price of the award.

 

Generally, and subject to limited exceptions set forth in the 2021 Incentive Plan, if we dissolve or undergo certain corporate transactions such as a merger, business combination or other reorganization, or a sale of all or substantially all of our assets, all awards then-outstanding under the 2021 Incentive Plan will become fully vested or paid, as applicable, and will terminate or be terminated in such circumstances, unless the plan administrator provides for the assumption, substitution or other continuation of the award. The plan administrator also has the discretion to establish other change-in-control provisions with respect to awards granted under the 2021 Incentive Plan. For example, the administrator could provide for the acceleration of vesting or payment of an award in connection with a corporate event that is not described above and provide that any such acceleration shall be automatic upon the occurrence of any such event.

 

Our board of directors may amend or terminate the 2021 Incentive Plan at any time, but no such action will affect any outstanding award in any manner materially adverse to a participant without the consent of the participant. Plan amendments will be submitted to stockholders for their approval as required by applicable law or any applicable listing agency. The 2021 Incentive Plan is not exclusive, and our board of directors and Compensation Committee may grant stock and performance incentives or other compensation, in stock or cash, under other plans or authority.

 

The 2021 Incentive Plan will terminate on August 16, 2031. However, the plan administrator will retain its authority until all outstanding awards are exercised or terminated. The maximum term of options, stock appreciation rights and other rights to acquire common stock under the 2021 Incentive Plan is ten years after the initial date of the award.

  

Outstanding Equity Awards at December 31, 2020

 

We did not have a stock option or other equity incentive plan at December 31, 2020.

 

 
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Non-Employee Director Compensation

 

We do not currently have an established policy to provide compensation to members of our board of directors for their services in that capacity.

 

Employment Agreements

 

On July 26, 2021, we entered into two-year employment agreements with each of Messrs. DeCicco, Romer, Allen, Martin and Cosenza, and with Ms. Faltings. Unless earlier terminated, at the end of the initial term or any renewal term, each agreement automatically renews for additional two-year terms until either we or the executive provides the other party with a timely notice of non-renewal.

  

The following is a summary of the compensation arrangements set forth in each employment agreement described above:

 

Executive

 

Title

 

Annual

Base Salary

 

 

Annual

Targeted Bonus

 

Richard DeCicco

 

Chairman of the Board and President

 

$

265,000

 

 

Determined by the Board, with a target of 25% of Annual Base Salary

 

Larry Romer

 

Chief Executive Officer

 

$

250,000

 

 

Determined by the Board, with a target of 35% of Annual Base Salary

 

David Allen

 

Chief Financial Officer

 

$

250,000

 

 

Determined by the Board, with a target of 25% of Annual Base Salary

 

Tom Martin

 

Chief Operating Officer — TopPop LLC

 

$

250,000

 

 

Determined by the Board, with a target of 25% of Annual Base Salary

 

John Cosenza

 

Chief Operating Officer

 

$

225,000

 

 

Determined by the Board, with a target of 25% of Annual Base Salary

 

Roseann Faltings

 

Board Member and Vice President

 

$

200,000

 

 

Determined by the Board, with a target of 25% of Annual Base Salary

 

   

Each executive is also eligible to receive employee stock option grants and/or restricted stock grants during the term of their employment, with the amount, frequency and other details of such grants determined by the Board.

 

Pursuant to the terms of Mr. Romer’s employment agreement, if we consummate a sale of its “Bellissima”™ product line during the term of the agreement (the “Bellissima Sale”), Mr. Romer will be entitled to receive a payment equal to two and a half percent (2.5%) of the net proceeds received by us in connection with such sale. In addition, Mr. Romer has entered into a letter agreement with Mr. DeCicco and Ms. Faltings pursuant to which, in the event a Bellissima Sale is consummated during the term of Mr. Romer’s employment, Mr. DeCicco and Ms. Faltings will pay Mr. Romer an amount equal to a total of two and a half percent (2.5%) of the net proceeds received by Mr. DeCicco and Ms. Faltings in connection with such sale.

 

Under the employment agreements, each executive will be entitled to severance in the event that we terminate his or her employment without Cause (as defined in the applicable employment agreement), his or her employment is terminated as a result of a Disability (as defined in the applicable employment agreement), or, in the case of Messrs. DeCicco and Allen, and Ms. Faltings, he or she resigns from his or her employment for Good Reason (as defined in the applicable employment agreement). The severance for Messrs. DeCicco and Allen, and Ms. Faltings would be a lump sum amount equal to: (i) 24 months of base salary at the then current rate, plus (ii) a prorated bonus for the year of termination equal to the target bonus multiplied by a fraction, the numerator of which is the number of days such executive was employed by us in the year of termination and the denominator being 365; plus (iii) a bonus for the severance period equal to 2x the target bonus. The severance for Mr. Romer would be a lump sum amount equal to: (i) 12 months of base salary at his then current rate, plus (ii) a prorated bonus for the year of termination equal to his target bonus multiplied by a fraction, the numerator of which is the number of days Mr. Romer was employed by us in the year of termination and the denominator being 365. The severance for Mr. Cosenza would be a lump sum amount equal to: (i) six months of base salary at his then current rate, plus (ii) a prorated bonus for the year of termination equal to his target bonus multiplied by a fraction, the numerator of which is the number of days Mr. Cosenza was employed by us in the year of termination and the denominator being 365.

 

Additionally, if an executive elects to continue to receive group health insurance coverage under our group health plan pursuant to COBRA, we will reimburse such executive for his or her monthly COBRA premiums for the duration of the applicable severance period; provided that the executive must show adequate documentation of his or her payment of the COBRA premiums and in the event that the executive becomes ineligible for COBRA coverage or fails to provide adequate documentation of his or her payment of the COBRA premiums, we shall no longer have any obligation to reimburse such COBRA amounts. An executive’s entitlement to the severance benefits described above is conditioned upon such executive’s timely executing an effective general release of claims in favor of us in connection with his or her termination of employment.

 

In connection with the execution of his or her employment agreement, each executive also executed our standard confidentiality, restrictive covenant, and assignment agreement, containing customary confidentiality restrictions and work-product provisions, as well as customary non-competition, non-service, and non-solicitation covenants with respect to our employees, consultants and customers

 

 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

The following includes a summary of transactions during our fiscal years ended December 31, 2020 and December 31, 2019 to which we have been a party, including transactions in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described elsewhere in this prospectus. We are not otherwise a party to a current related party transaction, and no transaction is currently proposed, in which the amount of the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years and in which a related person had or will have a direct or indirect material interest.

 

United Spirits

 

Prior to our acquisition of United on July 26, 2021, United was owned and managed by Richard DeCicco, our Chairman of the Board and President. During the years ended December 31, 2020 and December 31, 2019, total payments to United amounted to $30,680, all of which remained accrued and unpaid as of December 31, 2020.

 

On July 26, 2021, we entered into an acquisition agreement with Richard DeCicco for the purchase of United. See “Business—Recent Developments” for more information.

    

Exchange of Shares

 

There were no share exchanges in 2020.

 

On March 27, 2019, we issued 1,000,000 shares of common stock to Richard DeCicco in exchange for the surrender of the 1,000 shares of Series C Preferred Stock then owned by Mr. DeCicco.

 

On March 27, 2019, we issued a total of 1,000,000 shares of common stock (500,000 shares to Richard DeCicco and 500,000 shares to Roseann Faltings, our Vice President of Sales and a member of our board of directors, in exchange for the surrender of the five shares each of Series D Preferred Stock then owned by Mr. DeCicco and Ms. Faltings.

 

Distribution Agreements

 

On May 1, 2016, Bellissima entered into a distribution agreement with United, which was then owned and managed by Richard DeCicco, for United to distribute and wholesale Bellissima’s product and to act as the licensed importer and wholesaler. The distribution agreement provided United the exclusive right for a term of ten years to sell Bellissima’s product for an agreed distribution fee equal to $1.00 per case of product sold. During the years ended December 31, 2020 and 2019, Bellissima paid United $17,478 and $11,496, respectively.

 

On May 1, 2015, BiVi entered into the distribution agreement with United for United to distribute and wholesale BiVi’s products and to act as the licensed importer and wholesaler. Pursuant to the distribution agreement, United had the exclusive right to sell our products until 2025 for a distribution fee of $1.00 per case of product sold. During the years ended December 31, 2020 and 2019, BiVi paid United $0 and $50, respectively, pursuant to the distribution agreement.

 

Prior to our acquisition of United, we marketed and sold our private label Hooters products pursuant to a Marketing and Distribution Agreement entered into between us and United, effective as of April 1, 2019. Under such agreement, we had been granted the exclusive right to market and distribute the Hooters Spirits products line to (a) “Hooters” branded restaurants; (b) liquor distributors; and (c) off-premise, retail establishments (with all sales being made through distributors licensed to conduct business in the state of such sale) in the United States, Europe and Asia for a period of five years (which could have been extended by up to an additional five years by us upon written notice to United, so long as we were not in breach of the agreement). The agreement provided for United to receive a fee of $1.00 per case of product sold to any wholesaler for retailer distribution. During the years ended December 31, 2020 and 2019, we paid United Spirits $1,656 pursuant to the agreement.

  

 
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Lease Agreement

 

We lease our office and warehouse space in North Amityville, New York from Dan Kay International, an entity controlled by Richard DeCicco. On January 1, 2021, we entered into a lease extension with Dan Kay International pursuant to which we extended the term of our lease to January 1, 2024 for $4,892.89 per month.

 

We have also entered into a lease agreement with Richard DeCicco and Roseann Faltings to use part of their residence in Copiague, New York for our office space. The agreement has a term of three years from January 1, 2019 to December 31, 2021 and provides for monthly rent of $3,930. During the year ended December 31, 2020, we paid the officers an aggregate of $47,160 for this lease.

 

Amended and Restated LLC Agreements of Bellissima Spirits LLC and BiVi LLC

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Ms. Faltings, our vice president of sales and a member of the Board, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of Bellissima. Such agreement provides that the manager of Bellissima, currently Mr. DeCicco, may cause Bellissima to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause Bellissima to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in Bellissima are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

 

On July 26, 2021, we, and each other member identified therein, including Mr. DeCicco and Ms. Faltings, entered into an Amended and Restated Limited Liability Company Agreement dated as of July 26, 2021 of BiVi. Such agreement provides that the manager of BiVi, currently Mr. DeCicco, may cause BiVi to make distributions of available cash flow to the members pro rata in accordance with their cash flow ratios, of which we are entitled to 100% of any such distribution of available cash flow. Such agreement also provides that the manager shall cause BiVi to make distributions of net proceeds attributable to certain capital events to members pro rata in accordance with their membership interest percentage, of which we are entitled to 54% of any such distribution of net proceeds and Mr. DeCicco and Ms. Faltings are entitled to 15.34% and 15.33%, respectively. Transfers of membership interests in BiVi are generally restricted and such agreement provides for preemptive rights, rights of first refusal, and rights of co-sale, in each case, in accordance with the terms and conditions set forth therein.

  

Director Independence

 

Our board of directors has determined that none of our directors are currently “independent” as that term is defined under NASDAQ Listing Rule 5605(a)(2).

 

ISSUANCE OF SECURITIES TO SELLING STOCKHOLDERS

 

On July 26, 2021, we entered into securities purchase agreements dated as of July 26, 2021 with certain accredited investors for our sale of an aggregate of 32,303.11 shares of our newly-created Series A-2 Preferred Stock, 11,320,201 shares of common stock and Warrants to purchase 114,690,150 shares of common stock, for gross proceeds of $35,840,672, before deducting placement agent and other offering expenses. Pursuant to the purchase agreements, the shares of Series A-2 Preferred Stock, common stock and Warrants were to be sold in two tranches, the first of which closed on July 26, 2021 for gross proceeds of $22,918,203 for the sale of an aggregate of 20,724.70 shares of Series A-2 Preferred Stock, 7,019,196 shares of common stock and Warrants to purchase 73,338,203 shares of Common Stock. Of the $22,918,203 gross proceeds we received upon the closing of the first tranche, $18,147,354 was paid in cash, $676,708 was paid by assignment to us of $676,708 aggregate principal and interest amount of our outstanding original issue discount promissory notes and $3,762,000 was paid by assignment to us of $3,762,000 aggregate principal amount of TopPop’s outstanding original issue discount promissory notes, all of which notes were cancelled us. A $332,141 discount was applied to the cash component of the purchase price received upon the closing of the first tranche.

 

Pursuant to the purchase agreements, the closing of the second tranche, which will include the sale of an additional 11,578.40 shares of Series A Preferred Stock, 4,301,005 shares of common stock, and Warrants to purchase an additional 41,351,901 shares of common stock for gross proceeds of $12,690,901, all of which will be paid in cash, is expected to occur within five trading days of the date of this prospectus. Such closing is subject to standard closing conditions, including the accuracy in all material respects of our representations and warranties in the purchase agreements, our delivery of standard closing documents, including a legal opinion of our counsel, and there having been no material adverse change in our assets, business or financial condition.

 

On July 26, 2021, we entered into securities exchange agreements with the holders of our outstanding (a) Series E Convertible Preferred Stock, Series F Convertible Preferred Stock and Series G Convertible Preferred Stock (the “Existing Preferred Stock”), and (b) Series E Common Stock Purchase Warrants, Series F Common Stock Purchase Warrants and Series G Common Stock Purchase Warrants (the “Existing Warrants” and together with the Existing Preferred Stock, collectively, the “Existing Securities”), pursuant to which such holders exchanged (i) all Existing Preferred Stock held by each holder for shares of Series A-2 Preferred Stock and Warrants, and (ii) all Existing Warrants held by each holder for shares of common stock. In connection with such exchange, the holders exchanged all of their Existing Securities for an aggregate of 3,704.80 shares of Series A-2 Preferred Stock, Warrants to purchase an aggregate of 14,304,880 shares of common stock, and 2,449,517 shares of common stock. Upon such exchange, the Existing Securities were cancelled and all contractual (or similar) rights, preferences and obligations relating to such Existing Securities became null and void and of no further effect whatsoever.

 

This prospectus relates to the resale by the Selling Stockholders of the shares of common stock issuable upon exercise of the Warrants. The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.3125 per share. The Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise. If a registration statement registering the issuance of the shares of common stock underlying the Warrants under the Securities Act is not effective or available, the holder may elect to exercise the Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Warrant. No fractional shares of common stock will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

 

A holder will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.

 

 
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PRINCIPAL STOCKHOLDERS

 

The following table sets forth certain information regarding the beneficial ownership of our common stock as of November 22, 2021 by:

 

each person known by us to be a beneficial owner of more than 5% of our outstanding common stock;

 

each of our directors;

 

each of our executive officers; and

 

all directors and executive officers as a group.

 

The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days after November 22, 2021. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, to our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

 

In the table below, the percentage of beneficial ownership of our common stock is based on 89,032,764 shares of our common stock outstanding as of November 22, 2021. Unless otherwise noted below, the address of the persons listed on the table is c/o Iconic Brands, Inc., 44 Seabro Avenue, Amityville, NY.

  

Name of Beneficial Owner

 

Amount and
Nature of
Beneficial
Ownership

 

 

Percentage of
Class (%)(1)

 

Named Executive Officers and Directors

 

 

 

 

 

 

Richard DeCicco

 

 

24,686,893

 

 

 

27.55 %

Roseann Faltings

 

 

600,200

 

 

 

0.67

 

Larry Romer(2)

 

 

640,000

 

 

 

0.71

 

John Cosenza(3)

 

 

640,000

 

 

 

0.71

 

David Allen

 

 

1,000,000

 

 

 

1.12

 

Tom Martin

 

 

7,388,219

 

 

 

8.30

 

Executive Officers and Directors as a Group (6 persons)

 

 

34,101,980

 

 

 

38.82

 

 

 

 

 

 

 

 

 

 

Other 5% Stockholders

 

 

 

 

 

 

 

 

Hudson Bay Master Fund, Ltd. (4)

 

 

6,530,624

 

 

 

6.53

 

        

 
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(1)

The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on November 22, 2021. On November 22, 2021, there were 89,032,764 shares of our common stock outstanding. To calculate a stockholder’s percentage of beneficial ownership, we include in the numerator and denominator the common stock outstanding and all shares of our common stock issuable to that person in the event of the conversion of Series A-2 Preferred Stock or the exercise of Warrants owned by that person which are exercisable within 60 days of November 22, 2021. Common stock options and derivative securities held by other stockholders are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership among our stockholders may differ. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person’s name.

(2)

Includes 320,000 shares of common stock and 320,000 shares of common stock issuable upon exercise of outstanding Warrants held by Mr. Romer.

(3)

Includes 320,000 shares of common stock and 320,000 shares of common stock issuable upon exercise of outstanding Warrants held by Mr. Cosenza.

(4)

Includes 3,265,312 shares of common stock underlying Series A-2 Preferred Stock and 3,265,312 shares of common stock underlying the Warrants. Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of Hudson Bay Master Fund Ltd. and Sander Gerber disclaims beneficial ownership over these securities. Hudson Bay Master Fund, Ltd.’s address is C/o Hudson Bay Capital Management LP, 28 Havemeyer Place, 2nd Floor, Greenwich, CT 06830.

   

From time to time, the number of our shares held in the “street name” accounts of various securities dealers for the benefit of their clients or in centralized securities depositories may exceed 5% of the total shares of our common stock outstanding.

 

DESCRIPTION OF SECURITIES

 

Our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.001 per share, and 100,000,000 shares of preferred stock, par value $0.001 per share. As of November 22, 2021, 89,602,764 shares of common stock were issued and outstanding and 26,623.49 shares of preferred stock, designated as Series A-2  Preferred Stock, were issued and outstanding. In addition, as of such date, 128,995,031 shares of common stock were reserved for issuance upon the exercise of outstanding common stock purchase warrants, including the Warrants and 85,195,168 shares of common stock were reserved for issuance upon the conversion of outstanding Series A-2 Preferred Stock.

   

Common Stock

 

Voting, Dividend and Other Rights. Each outstanding share of common stock entitles the holder to one vote on all matters presented to the stockholders for a vote. Holders of shares of common stock have no cumulative voting, pre-emptive, subscription or conversion rights. All shares of common stock to be issued pursuant to this registration statement will be duly authorized, fully paid and non-assessable. Our board of directors determines if and when distributions may be paid out of legally available funds to the holders. To date, we have not declared any dividends with respect to our common stock. Our declaration of any cash dividends in the future will depend on our board of directors’ determination as to whether, in light of our earnings, financial position, cash requirements and other relevant factors existing at the time, it appears advisable to do so. We do not anticipate paying cash dividends on the common stock in the foreseeable future.

 

Rights Upon Liquidation. Upon liquidation, subject to the right of any holders of the preferred stock to receive preferential distributions, each outstanding share of common stock may participate pro rata in the assets remaining after payment of, or adequate provision for, all our known debts and liabilities.

 

Majority Voting. The holders of a majority of the outstanding shares of common stock entitled to vote, represented in person or by proxy, constitute a quorum at any meeting of the stockholders. The common stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of common stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize stockholder actions other than the election of directors. Most amendments to our articles of incorporation require the vote of the holders of a majority of all outstanding voting shares.

 

 
49

Table of Contents

 

Series A-2 Preferred Stock

 

Voting. The Series A-2 Preferred Stock (the “Series A Preferred”) shall have no voting rights, except that as long as any shares of Series A Preferred are outstanding, we cannot not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Certificate of Designation relating to the Series A Preferred, (b) create any equity securities that are senior in preference or liquidation to the Series A Preferred, (c) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of holders of Series A Preferred, (d) increase the number of authorized shares of Series A Preferred, (e) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of our Common Stock, Common Stock Equivalents or our securities ranking junior to the Series A Preferred other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of our departing officers and directors, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors for so long as the Series A Preferred is outstanding, (f) pay cash dividends or distributions on our securities junior to the Series A Preferred, (g) enter into any transaction with any of our affiliates which would be required to be disclosed in any public filing with the SEC, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of our disinterested or (h) enter into any agreement with respect to any of the foregoing.

 

Liquidation. Upon our liquidation, dissolution or winding-up, holders of Series A Preferred are entitled to receive out of our assets an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon, and any other fees or liquidated damages then due and owing thereon under the Certificate of Designation before any distribution or payment shall be made to the holders of any securities junior to the Series A Preferred, and if our assets are insufficient to pay in full such amounts, then the entire assets to be distributed to holders of Series A Preferred shall be ratably distributed among such holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

 

Conversion. Each share of Series A Preferred is convertible at the option of the holder thereof, into that number of shares of Common Stock determined by dividing $1,000 (subject to increase set forth below under “Dividends”) (the “Stated Value”) by $0.3125, subject to adjustment as described in the Certificate of Designation relating to the Series A Preferred (the “Conversion Price”). A holder will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.

 

Dividends. Holders of Series A Preferred are entitled to receive dividends on shares of Series A Preferred equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. Additionally, in the event that the average of the VWAPs for each of the fifteen consecutive trading days ending on the trading day immediately prior to July 1, 2022 is less than the then Conversion Price in effect, then retroactively as of the Original Issue Date holders of Series A Preferred shall be entitled to receive a one-time dividend payment equal to 6% of the Stated Value (such date, the “Dividend Payment Date”) in cash or, at our option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock, or a combination thereof (the dollar amount to be paid in shares of Common Stock, the “Dividend Share Amount”). The form of dividend payments to each Holder shall be determined in the order of priority set forth in the Certificate of Designation relating to the Series A Preferred. The aggregate number of shares of Common Stock issuable to a holder of Series A Preferred on the Dividend Payment Date shall equal to the quotient of (x) the Dividend Share Amount divided by (y) the lesser of (a) the Conversion Price and (b) 90% of the average of the VWAP for each of the five consecutive trading days ending on the trading day that is immediately prior to the Dividend Payment Date.

 

See “Anti-Takeover Effects of Certain Provisions of our Charter and Bylaws and the DGCL” for provisions of our charter and bylaws and the DGCL that would have an effect of delaying, deferring or preventing a change in control of us and that would operate only with respect to an extraordinary corporate transaction involving the registrant, such as a merger, reorganization, tender offer, sale or transfer of substantially all of its assets, or liquidation.

 

 
50

Table of Contents

 

Warrants

    

Each Warrant registered under the registration statement of which this prospectus forms a part entitles the holder thereof to one share of our common stock. 87,643,083 of the Warrants were issued on July 26, 2021, and are exercisable until July 26, 2026. An additional 41,351,901 Warrants will be issued within five business days of the date of this prospectus. The exercise price per share of the common stock underlying the Warrants is $0.3125, subject to adjustment in the case of stock dividends and splits, subsequent rights offerings, pro rata dividends or distributions of our assets to holders of our common stock and fundamental transactions. A holder will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.

     

Anti-Takeover Effects of Certain Provisions of our Charter and Bylaws and the DGCL

 

Certain provisions of Nevada law and our Articles of Incorporation and Bylaws could make more difficult the acquisition of us by means of a tender offer or otherwise, and the removal of incumbent officers and directors. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us.

 

Nevada Law

 

The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the NRS prohibit a Nevada corporation with at least 200 stockholders (at least 100 of whom are stockholders of record and residents of the State of Nevada) from engaging in various “combination” transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or after the expiration of the two-year period, unless:

 

 

·

The combination or the transaction by which the person first became an interested stockholder is approved by the board of directors of the corporation before the person first became an interested stockholder, or

 

 

 

 

·

The combination is approved by the board of directors of the corporation and, at or after that time, the combination is approved at an annual or special meeting of the stockholders of the corporation, and not by written consent, by the affirmative vote of the holders of stock representing at least 60 percent of the outstanding voting power of the corporation not beneficially owned by the interested stockholder or the affiliates or associates of the interested stockholder.

 

In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) ten percent (10%) or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

 

A “combination” is generally defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to five percent (5%) or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to five percent (5%) or more of the aggregate market value of all outstanding shares of the corporation, or (c) ten percent (10%) or more of the earning power or net income of the corporation.

 

The business combination statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire the Company even though such a transaction may offer the Company’s stockholders the opportunity to sell their stock at a price above the prevailing market price.

     

Board of Directors Vacancies

 

Our bylaws authorize our board of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set only by resolution of the majority of the incumbent directors.

 

Meeting of Stockholders

 

Our bylaws provide that special meetings of our stockholders may be called by the board of directors.

 

Authorized but Unissued Shares

 

Our authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval and may be utilized for a variety of corporate purposes, including future public and private offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is Securities Transfer Corporation, 2901 N. Dallas Parkway, Suite 380, Plano, Texas 75093 and its telephone number is (469) 633-0101.

 

 
51

Table of Contents

 

SELLING STOCKHOLDERS

 

The table below sets forth, as of November 22, 2021, the following information regarding the Selling Stockholders:

  

 

·

the number of shares of common stock beneficially owned by each Selling Stockholder prior to this offering, without regard to any beneficial ownership limitations contained in the Series A-2 Preferred Stock or the Warrants;

 

 

 

 

·

the number of shares of common stock to be offered by each Selling Stockholder in this offering;

 

 

 

 

·

the number of shares of common stock to be beneficially owned by each Selling Stockholder assuming the sale of all of the shares of common stock covered by this prospectus; and

 

 

 

 

·

the percentage of our issued and outstanding shares of common stock to be beneficially owned by each Selling Stockholder assuming the sale of all of the shares of common stock covered by this prospectus based on the number of shares of common stock issued and outstanding as of November 22, 2021.

  

Except as described above, the number of shares of common stock beneficially owned by each Selling Stockholder has been determined in accordance with Rule 13d-3 under the Exchange Act, and includes, for such purpose, shares of common stock that the Selling Stockholder has the right to acquire within 60 days of November 22, 2021.  In addition, we have included in the number of shares of common stock beneficially owned by each Selling Stockholder the number of shares of common stock that the Selling Stockholder has the right to acquire at the closing of the second tranche under the purchase agreement entered into by such Selling Stockholder (the “Purchase Agreement”), as well as the shares of common stock issuable upon conversion of the shares of Series A-2 Preferred Stock or exercise of the Warrants that the Selling Stockholder has the right to acquire at the closing of the second tranche under the Purchase Agreement.  The closing of the second tranche under  the Purchase Agreement will occur within five business days of the date of this prospectus. Additional information relating to the transactions contemplated by the Purchase Agreement, including the conditions to the closing of the second tranche under the Purchase Agreement and the terms of the Warrants, is set forth under the caption “Issuance of Securities to Selling Stockholders.”

  

All of the shares of common stock that may be offered by the Selling Stockholders hereunder will be acquired by such Selling Stockholders upon the exercise by such Selling Stockholders of the Warrants that are held by such Selling Stockholders, which Warrants were previously issued to the Selling Stockholders pursuant to, or will issued to the Selling Stockholders upon the closing of the second tranche under, the Purchase Agreement in a private transaction by our company. 

    

All information with respect to the common stock ownership of each Selling Stockholder has been furnished by or on behalf of the Selling Stockholder. We believe, based on information supplied by the Selling Stockholders, that except as may otherwise be indicated in the footnotes to the table below, each Selling Stockholder has sole voting and dispositive power with respect to the shares of common stock reported as beneficially owned by it. Because the Selling Stockholders may sell some or all of the shares of common stock issuable upon exercise of the Warrants and covered by this prospectus, and because there are currently no agreements, arrangements or understandings with respect to the sale of any of the shares of common stock, no estimate can be given as to the number of shares of common stock available for resale hereby that will be held by the Selling Stockholders upon termination of this 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 and from time to time, the shares of common stock it beneficially owns in transactions exempt from the registration requirements of the Securities Act after the date on which it provided the information set forth in the table below. We have, therefore, assumed for the purposes of the following table, that each Selling Stockholder will sell all of the shares of common stock issuable upon exercise of the Warrants owned beneficially by it that are covered by this prospectus, but will not sell any other shares of common stock that it presently owns. Except in the case of Larry Romer and John Cosenza, who joined our company in connection with our acquisition of TopPop LLC on July 26, 2021, no Selling Stockholder has held any position or office, or has otherwise had a material relationship, with us or any of our subsidiaries within the past three years other than as a result of the ownership of our shares of common stock or other securities.

  

 
52

Table of Contents

 

 

 

Shares Owned Prior

to the Offering

 

 

 

 

Shares Owned After  the Offering 

 

 

 

Common

stock

 

 

Common stock

underlying

Series A2 Preferred stock

 

 

Common stock

underlying

Warrants

 

 

Percent(1)

 

 

Number of shares

Offered

 

 

Number

 

 

Percent(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anson Investments Master Fund LP (2)

 

 

2,767,200

 

 

 

16,000,002

 

 

 

16,000,002

 

 

 

4.99 *%

 

 

16,000,002

 

 

 

18,767,202

 

 

 

4.99 *%

155 University Avenue, Suite 207, Toronto, Ontario, M5H 3B7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arena Special Opportunities Partners I, LP (3)

 

 

-

 

 

 

14,223,984

 

 

 

14,223,984

 

 

 

4.99 *

 

 

14,223,984

 

 

 

14,223,984

 

 

 

4.99 *

405 Lexington Ave., 59th Fl., New York, NY, 10174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arena Special Opportunities (Cayman Master) I, LP (4)

 

 

-

 

 

 

8,451,216

 

 

 

8,451,216

 

 

 

4.99 *

 

 

8,451,216

 

 

 

8,451,216

 

 

 

4.99 *

405 Lexington Ave., 59th Fl., New York, NY, 10174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arena Finance Markets, LP (5)

 

 

-

 

 

 

5,168,016

 

 

 

5,168,016

 

 

 

4.99 *

 

 

5,168,016

 

 

 

5,168,016

 

 

 

4.99 *

405 Lexington Ave., 59th Fl., New York, NY, 10174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arena Special Opportunities (Off shore) Master, LP (6)

 

 

-

 

 

 

2,156,784

 

 

 

2,156,784

 

 

 

4.41

 

 

 

2,156,784

 

 

 

2,156,784

 

 

 

2.25

 

405 Lexington Ave., 59th Fl., New York, NY, 10174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Empery Asset Master, Ltd. (7)

 

 

241,200

 

 

 

4,047,990

 

 

 

4,047,990

 

 

 

4.99 *

 

 

4,047,990

 

 

 

4,289,190

 

 

 

4.40

 

c/o Empery Asset Management LP 1 Rockefeller Plaza, Suite 1205, New York, NY, 10020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Empery Tax Efficient, LP (8)

 

 

42,000

 

 

 

1,212,800

 

 

 

1,212,800

 

 

 

2.57

 

 

 

1,212,800

 

 

 

1,254,800

 

 

 

1.32

 

c/o Empery Asset Management LP 1 Rockefeller Plaza, Suite 1205, New York, NY, 10020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Empery Tax Efficient III, LP (9)

 

 

468,800

 

 

 

1,139,200

 

 

 

1,139,200

 

 

 

2.87

 

 

 

1,139,200

 

 

 

1,608,000

 

 

 

1.70

 

c/o Empery Asset Management LP 1 Rockefeller Plaza, Suite 1205, New York, NY, 10020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3i, LP (10)

 

 

 

 

 

 

6,400,000

 

 

 

6,400,000

 

 

 

4.99 *

 

 

6,400,000

 

 

 

6,400,000

 

 

 

4.99 *

140 Broadway - 38th Floor, New York, NY, 10005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gregory Castaldo

 

 

1,132,500

 

 

 

6,000,000

 

 

 

6,000,000

 

 

 

4.99 *

 

 

6,000,000

 

 

 

7,132,500

 

 

 

4.99 *

3776 Steven James Drive, Garnet Valley, PA, 19060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cavalry Fund I LP (11)

 

 

-

 

 

 

4,800,000

 

 

 

4,800,000

 

 

 

4.99 *

 

 

4,800,000

 

 

 

4,800,000

 

 

 

4.88

 

82 E. Allendale Rd., Ste 5B, Saddle River, NJ, 07458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Iroquois Master Fund, Ltd. (12)

 

 

660,000

 

 

 

2,160,000

 

 

 

2,160,000

 

 

 

4.99 *

 

 

2,160,000

 

 

 

2,820,000

 

 

 

2.95

 

125 Park Ave., 25th Fl., New York, NY, 10017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Iroquois Capital Investment Group, LLC (13)

 

 

200,000

 

 

 

1,839,990

 

 

 

1,839,990

 

 

 

3.99

 

 

 

1,839,990

 

 

 

2,039,990

 

 

 

2.14

 

125 Park Ave., 25th Fl., New York, NY, 10017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sky Direct LLC (14)

 

 

920,736

 

 

 

-

 

 

 

538,717

 

 

 

1.55

 

 

 

538,717

 

 

 

920,736

 

 

 

0.98

 

136 Wheatley Road, Brookville, NY, 11545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NY Farms Group Inc. (15)

 

 

-

 

 

 

3,999,990

 

 

 

3,999,990

 

 

 

4.99 *

 

 

3,999,990

 

 

 

3,999,990

 

 

 

4.10

 

98 Cutter Mill Road # 441 S, Great Neck, NY, 11021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

L1 Capital Global Opportunities Master Fund (16)

 

 

375,000

 

 

 

3,999,990

 

 

 

3,999,990

 

 

 

4.99 *

 

 

3,999,990

 

 

 

4,374,990

 

 

 

4.49

 

1688 Meridian Ave., Level 6, Miami Beach, FL, 33139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scott A. Sampson Trust # 2 (17)

 

 

195,000

 

 

 

2,280,000

 

 

 

2,280,000

 

 

 

4.85

 

 

 

2,280,000

 

 

 

2,475,000

 

 

 

2.58

 

6938A N. Santa Monica Blvd., Fox Point,WI, 53217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brio Capital Master Fund, Ltd. (18)

 

 

-

 

 

 

3,200,010

 

 

 

3,200,010

 

 

 

4.99 *

 

 

3,200,010

 

 

 

3,200,010

 

 

 

3.31

 

100 Merrick Road Suite 401W, Rockville Centre, NY, 11570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hudson Bay Master Fund, Ltd. (19)

 

 

-

 

 

 

3,265,312

 

 

 

3,265,312

 

 

 

6.53

 

 

 

3,265,312

 

 

 

3,265,312

 

 

 

3.37

 

C/o Hudson Bay Capital Management LP 28 Havermeyer Place, 2nd Floor Greenwich, CT 06830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alto Opportunity Master Fund, SPC-Segregated Master Portfolio B (20)

 

 

-

 

 

 

3,200,010

 

 

 

3,200,010

 

 

 

4.99 *

 

 

3,200,010

 

 

 

3,200,010

 

 

 

3.31

 

C/0 Ayrton Capital LLC 55 Post Road West, Second Floor, Westport , CT, 06880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jonathan Honig

 

 

-

 

 

 

1,920,000

 

 

 

1,920,000

 

 

 

3.94

 

 

 

1,920,000

 

 

 

1,920,000

 

 

 

2.01

 

5825 Windsor Court, Boca Raton, FL, 33496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32 Entertainment LLC (21)

 

 

180,000

 

 

 

1,760,000

 

 

 

1,760,000

 

 

 

3.81

 

 

 

1,760,000

 

 

 

1,940,000

 

 

 

2.04

 

9 Westerleigh Road, Purchase, NY, 10577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sixth Borough Capital Fund LP (22)

 

 

-

 

 

 

1,599,990

 

 

 

1,599,990

 

 

 

3.31

 

 

 

1,599,990

 

 

 

1,599,990

 

 

 

1.68

 

1515 N. Federal Highway Suite 300, Boca Raton, FL, 33431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brett Gilman

 

 

1,000,000

 

 

 

-

 

 

 

1,000,000

 

 

 

2.12

 

 

 

1,000,000

 

 

 

1,000,000

 

 

 

1.07

 

15 Witherbee Avenue, Pelham, NY, 10803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leonard R. Warner Jr.

 

 

1,000,000

 

 

 

-

 

 

 

1,000,000

 

 

 

2.12

 

 

 

1,000,000

 

 

 

1,000,000

 

 

 

1.07

 

220 Victory Drive, Massapequa Park, NY, 11762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alpha Capital Anstalt (23)

 

 

284,041

 

 

 

3,200,000

 

 

 

3,200,000

 

 

 

4.99 *

 

 

3,200,000

 

 

 

3,484,041

 

 

 

3.60

 

Lettstrasse 32, Liechtenstein, 9490 Vaduz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Richard Molinsky

 

 

640,000

 

 

 

-

 

 

 

640,000

 

 

 

1.36

 

 

 

640,000

 

 

 

640,000

 

 

 

0.68

 

52 Lord's Hwy East, Weston, CT, 06883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SRAX Inc. (24)

 

 

800,000

 

 

 

-

 

 

 

800,000

 

 

 

1.70

 

 

 

800,000

 

 

 

800,000

 

 

 

0.86

 

2629 Towngate Road, Westlake Village, CA, 91361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVI Investments, Inc. (25)

 

 

480,000

 

 

 

3,200,000

 

 

 

3,200,000

 

 

 

4.99 *

 

 

3,200,000

 

 

 

3,680,000

 

 

 

3.81

 

101 California St., Suite 3250, San Francisco, CA, 94111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intracoastal Capital LLC (26)

 

 

500,000

 

 

 

-

 

 

 

320,000

 

 

 

0.87

 

 

 

320,000

 

 

 

500,000

 

 

 

0.53

 

245 Palm Trail, Delray Beach, FL 33483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William Cobb

 

 

400,000

 

 

 

-

 

 

 

400,000

 

 

 

0.85

 

 

 

400,000

 

 

 

400,000

 

 

 

0.43

 

38 Oakwood Road, Allendale, NJ, 07401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 
53

Table of Contents

  

 

 

Shares Owned Prior

to the Offering

 

 

Shares Owned After 

the Offering 

 

 

 

Common

stock

 

 

Common stock

underlying

Series A2 Preferred stock

 

 

Common stock

underlying

Warrants

 

 

Percent(1)

 

 

Number of shares

Offered

 

 

Number

 

 

Percent(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jaime Taicher

 

 

400,000

 

 

 

-

 

 

 

400,000

 

 

 

0.85

 

 

 

400,000

 

 

 

400,000

 

 

 

0.43

 

525 E.86th St., 5F, New York, NY, 10028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph Reda

 

 

2,654,050

 

 

 

-

 

 

 

820,800

 

 

 

3.68

 

 

 

820,800

 

 

 

2,654,050

 

 

 

2.84

 

1324 Manor Circle, Pelham, NY, 10803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timothy Tyler Berry

 

 

510,250

 

 

 

-

 

 

 

400,000

 

 

 

0.97

 

 

 

400,000

 

 

 

510,250

 

 

 

0.55

 

4 Millers Way, Old Lyme, CT, 06371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Larry Romer

 

 

320,000

 

 

 

-

 

 

 

320,000

 

 

 

0.68

 

 

 

320,000

 

 

 

320,000

 

 

 

0.34

 

6 Beatrice Lane, Glen Cove, NY, 11542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

John A. Cosenza

 

 

320,000

 

 

 

-

 

 

 

320,000

 

 

 

0.68

 

 

 

320,000

 

 

 

320,000

 

 

 

0.34

 

11 Abbey Street, Massapequa Park, NY, 11762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frank Desousa

 

 

320,000

 

 

 

-

 

 

 

320,000

 

 

 

0.68

 

 

 

320,000

 

 

 

320,000

 

 

 

0.34

 

43 Beach Road, Massapequa, NY, 11758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael A. Silverman

 

 

320,000

 

 

 

-

 

 

 

320,000

 

 

 

0.68

 

 

 

320,000

 

 

 

320,000

 

 

 

0.34

 

400 Stonytown Road, Manhasset, NY, 11030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Sicignano III

 

 

300,000

 

 

 

-

 

 

 

300,000

 

 

 

0.64

 

 

 

300,000

 

 

 

300,000

 

 

 

0.32

 

44 Hidden Pines Court, East Amherst, NY, 14051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Andrew Arno

 

 

240,000

 

 

 

-

 

 

 

240,000

 

 

 

0.51

 

 

 

240,000

 

 

 

240,000

 

 

 

0.26

 

160 Riverside Blvd., Apt 31D, New York, NY, 10069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Germaine

 

 

300,000

 

 

 

-

 

 

 

300,000

 

 

 

0.64

 

 

 

300,000

 

 

 

300,000

 

 

 

0.32

 

2 Bayclub Drive, Bayside, NY, 11360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James Patrick McIlree

 

 

100,000

 

 

 

-

 

 

 

100,000

 

 

 

0.21

 

 

 

100,000

 

 

 

100,000

 

 

 

0.11

 

4 Bishop's Gate Road, Darien, CT, 06820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seafield Brothers Holdings LLC (27)

 

 

200,000

 

 

 

-

 

 

 

200,000

 

 

 

0.43

 

 

 

200,000

 

 

 

200,000

 

 

 

0.21

 

720 N.4th Street, Montpelier, ID, 83254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gerard R. Kelly

 

 

300,000

 

 

 

-

 

 

 

300,000

 

 

 

0.64

 

 

 

300,000

 

 

 

300,000

 

 

 

0.32

 

601 Bronze Drive, Lexington, SC, 29072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Andrew Arno

 

 

472,500

 

 

 

-

 

 

 

150,000

 

 

 

0.66

 

 

 

150,000

 

 

 

472,500

 

 

 

0.51

 

160 Riverside Blvd., Apt 31D, New York, NY, 10069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elizabeth Arno

 

 

187,500

 

 

 

-

 

 

 

150,000

 

 

 

0.36

 

 

 

150,000

 

 

 

187,500

 

 

 

0.20

 

152 Collincote Street, Stoneham, MA, 02180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JBA Investments LLC (28)

 

 

187,500

 

 

 

-

 

 

 

150,000

 

 

 

0.36

 

 

 

150,000

 

 

 

187,500

 

 

 

0.20

 

160 Riverside Blvd., Apt 31D, New York, NY, 10069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MJA Investments LLC (29)

 

 

189,000

 

 

 

-

 

 

 

151,200

 

 

 

0.36

 

 

 

151,200

 

 

 

189,000

 

 

 

0.20

 

160 Riverside Blvd., Apt 31D, New York, NY, 10069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David A. Jenkins

 

 

187,500

 

 

 

-

 

 

 

150,000

 

 

 

0.36

 

 

 

150,000

 

 

 

187,500

 

 

 

0.20

 

9611 North US Hwy 1 Box 390, Sebastian, FL, 32958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alexander Cosenza

 

 

100,000

 

 

 

-

 

 

 

100,000

 

 

 

0.21

 

 

 

100,000

 

 

 

100,000

 

 

 

0.11

 

1512 Lakeside Drive, Wantagh, NY, 11793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jerald L. Wallace

 

 

100,000

 

 

 

-

 

 

 

100,000

 

 

 

0.21

 

 

 

100,000

 

 

 

100,000

 

 

 

0.11

 

524 Heartland Blvd., Lake Placid, FL, 33852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ryan Warner

 

 

416,667

 

 

 

-

 

 

 

100,000

 

 

 

0.55

 

 

 

100,000

 

 

 

416,667

 

 

 

0.45

 

220 Victory Drive, Massapequa Park, NY, 11762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Scrobe

 

 

128,305

 

 

 

-

 

 

 

100,000

 

 

 

0.24

 

 

 

100,000

 

 

 

128,305

 

 

 

0.14

 

46 Bartlett Drive, Manhasset, NY, 11030