As filed with the Securities and Exchange Commission on October 14, 2022.May 22, 2023.

Registration Statement No. 333 -267199-[____]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

(Pre-effective Amendment No. 1)

Registration Statement under the Securities Act of 1933

KONA GOLD BEVERAGE, INC.

(Exact name of registrant as specified in its charter)

Kona Gold Beverage, Inc.

746 North Drive, Suite A

Melbourne, Florida 32934

(844) 714-2224

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive offices)

Robert Clark

Chairman of the Board, Chief Executive Officer, and President

746 North Drive, Suite A

Melbourne, Florida 32934

(844)714-2224

(Name, address, including zip code, and

telephone number, including area code, of agent for service)

With copiescopy to:

Randolf W. Katz, Esq.

Clark Hill LLP

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

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 of 1933, 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, please 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☒

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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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 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 preliminary Prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary Prospectus is subject to completion, is not an offer to sell securities, and it is not soliciting an offer to buy these securities, in any state where offers or sales are not permitted.

KONA GOLD BEVERAGE, INC.

[●Selling Stockholders ]

Up to 702,280,139 Shares of Common Stock

Pre-funded WarrantsThis is a prospectus (this “Prospectus”) of Kona Gold Beverage, Inc., a Delaware corporation (“Kona Gold,” our “Company,” “we,” “our,” or “us”). It relates to Purchase

[●] Sharesthe resale or other disposition by the selling stockholders identified in this Prospectus, and their transferees, of Common Stock and Warrantsup to Purchase

[●] Shares702,280,139 shares of Common Stockour common stock, par value $0.00001 per share (our “Common Stock”).

We are offering [●]registering the resale of (i) up to 642,224,583 shares of Common Stock par value $0.00001 per share, and Warrants (“Common Stock Purchase Warrants”) to purchase [●] shares of Common Stock pursuant to this prospectus. Each whole Common Stock Purchase Warrant is exercisable to purchase one share of Common Stock atissuable under an assumed exercise price of $[●], will be exercisable upon issuance and will expire [five] years from the date of issuance. The shares of Common Stock and Common Stock Purchase Warrants will be issued and sold to purchasersequity line in the ratioamount of one-to-one. Common Stock$5,000,000 (the “Equity Line”) established by the Equity Purchase Warrants will be issued in book-entry form pursuant to a Warrant agency agreementAgreement, dated March 30, 2023 (the “EPA”), between usthe Company and Action Stock Transfer Corporation as Warrant agent. This prospectus also relates to the offering of theMast Hill Fund, L.P. (“Mast Hill”); (ii) 56,000,000 shares of Common Stock issuable upon exercise of a common stock purchase warrant (the “EPA Warrant”) granted to Mast Hill; and (iii) up to 4,055,556 shares of Common Stock Purchase Warrants.issued or issuable upon exercise of the common stock purchase warrants (the “Placement Warrants”) granted to J.H. Darbie & Co. (“Darbie”).

As used in this Prospectus, the term “Selling Stockholders” includes Mast Hill, Darbie, and each of them, and any donees, pledgees, transferees, or other successors-in-interest selling shares received after the date of this Prospectus from such Selling Stockholders as a gift, pledge, or other non-sale related transfer.

Pursuant to the EPA, the Company (i) agreed to sell to Mast Hill up to Five Million Dollars ($5,000,000.00) (the “Maximum Commitment Amount”) of shares of our Common Stock (the “Put Shares”) and (ii) granted to Mast Hill the EPA Warrant that is exercisable immediately for the purchase of up to an aggregate of 56,000,000 shares (the “EPA Warrant Shares”) of our Common Stock.

Upon the terms and conditions set forth in the EPA, the Company has the right, but not the obligation, to direct Mast Hill, by delivery to Mast Hill of a Put Notice from time to time, to purchase shares of our Common Stock (i) in a minimum amount not less than $25,000.00 and (ii) in a maximum amount up to the lesser of (a) $500,000.00 or (b) 150% of the Average Daily Trading Value of our Common Stock (as defined in the EPA). At any time and from time to time through and including March 30, 2025 (the “Commitment Period”), except as provided in the EPA, the Company may deliver a Put Notice to Mast Hill.

The actual amount of proceeds we receive pursuant to each Put Notice (each, the “Put Amount”) is determined by multiplying the Put Amount Requested by the applicable purchase price. The purchase price for each of the Put Shares equals 90% of the “Market Price,” less the Clearing Costs. Market Price is the average of the two lowest volume weighted average prices of the Company’s Common Stock on its principal market during the Valuation Period. The Valuation Period is the seven trading days immediately following the date on which the shares of Common Stock issued pursuant to the Put Notice were cleared by the Company’s transfer agent. Clearing Costs are the fees incurred by Mast Hill with respect to its brokerage firm, clearing firm, Company transfer agent fees, and attorney fees, with respect to the Put Shares.

The Commitment Period commenced on March 30, 2023, and ends on the earlier of (i) the date on which Mast Hill shall have purchased Put Shares pursuant to the EPA equal to the Maximum Commitment Amount, (ii) March 30, 2025, (iii) written notice of termination by the Company to Mast Hill (which shall not occur during any Valuation Period or at any time that Mast Hill holds any of the Put Shares), (iv) the Registration Statement for the Put Shares is no longer effective after its initial effective date, or (v) the date that, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.

We are also offeringgranted to Mast Hill the EPA Warrant to purchase up to an aggregate of 56,000,000 EPA Warrant Shares. The EPA Warrant has a five-year term and is immediately exercisable at an exercise price of $0.0045 per share, subject to adjustment and is exercisable by the then-holder on a “cashless” basis. The EPA Warrant contains an adjustment provision that, subject to certain purchasers whose purchase ofexceptions, reduces the exercise price if we issue shares of Common Stock in this offering would otherwiseor common stock equivalents at a price lower than the then-current exercise price of the EPA Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will result in an equitable adjustment of the purchaser, together withexercise price of the EPA Warrant and, in certain circumstances, the number of EPA Warrant Shares. The EPA Warrant is subject to an “exercise blocker,” such that Mast Hill cannot exercise any portion of the EPA Warrant that would result in Mast Hill and its affiliates and certain related parties, beneficially owningholding more than 4.99% (or, at the election of the purchaser, 9.99%) of ourthen-issued and outstanding shares of Common Stock immediately following such exercise (excluding, for purposes of such determination, shares of the consummationCommon Stock issuable upon exercise of this offering, the opportunityEPA Warrant or Put Notice that had not then been exercised, respectively).

In order to deliver a Put Notice, certain conditions set forth in the EPA must be met. In addition, we are prohibited from delivering a Put Notice if: (i) the sale of Put Shares pursuant to such Put Notice would cause us to issue and sell to Mast Hill, or Mast Hill to acquire or purchase, if any such purchaser so chooses, Pre-funded Warrants, in lieua number of shares of our Common Stock that, when aggregated with all shares of Common Stock purchased by Mast Hill pursuant to all prior Put Notices issued under the EPA, would exceed the Maximum Commitment Amount; or (ii) the issuance of the EPA Warrant Shares upon exercise of the EPA Warrant would cause us to issue and sell to Mast Hill, or Mast Hill to acquire or purchase, an aggregate number of shares of Common Stock that would otherwise result in such purchaser’s beneficial ownership exceedingMast Hill beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of ourissued and outstanding shares of Common Stock. Each Pre-funded Warrant will be exercisable for one share of Common Stock. The exercise price of each Pre-funded Warrant will be $0.00001 per share of Common Stock. The Pre-funded Warrants will be immediately exercisable and may be exercised at any time until allour common stock (the “Beneficial Ownership Limitation”). For a more complete discussion of the Pre-funded Warrantsterms and conditions of the EPA, see the discussion under the heading “Recent Developments” in the Section entitled “Prospectus Summary.”

We are exercised in full. This offering also relates tonot selling any securities under this Prospectus and will not receive any of the proceeds from the sale of shares of Common Stock issuable upon exercise of any Pre-funded Warrants sold in this offering.

The shares of Common Stock andby the accompanying Common Stock Purchase WarrantsSelling Stockholders. We will, be sold in units (each, a “Common Stock Unit”) and the Pre-funded Warrants and the accompanying Common Stock Purchase Warrants will be sold in units (each, a “Pre-funded Warrant Unit” and, together with the Common Stock Units, the “Units”), with each Common Stock Unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock and each Pre-funded Warrant Unit consisting of one Pre-funded Warrant and one Common Stock Purchase Warrant to purchase one share of Common Stock. For each Pre-funded Warrant Unit we sell, the number of Common Stock Units we are offering will be decreased on a one-for-one basis. The shares of Common Stock, Pre-funded Warrants, and Common Stock Purchase Warrants will be immediately separable on issuance. Each Common Stock Unit will be sold at a price of $[●] per Common Stock Unit (assuming a public offering price of $[●] per share of Common Stock representing the closing price ofhowever, receive proceeds from our Common Stock on the Pink^® Open Market (“Pink”) of $[●] per share of Common Stock on [●], 2022, and giving effect to a Specific Reverse Split ratio of [●]. The final public offering price of each Common Stock Unit and the exercise price of each Common Stock Purchase Warrant offered hereunder will be determined through negotiations between us and the lead underwriter in the offering as well as by reference to the trading price of the shares of Common Stock on the Pink. The purchase price of each Pre-funded Warrant Unit will be equal to the price at which each Common Stock Unit is sold to the public in this offering, minus $0.00001, and the exercise price of each Pre-funded Warrant will be $0.00001 per share of Common Stock.

On October [●], 2022, our board of directors (our “Board”) approved an Amendment to our Certificate of Incorporation to effect one or more reverse splits (the “Reverse Split”) of our outstanding shares of Common Stock and a concurrent reduction in our authorized capital (our “Charter Amendment”). We filed our Proxy Statement on Schedule 14A for a Special Meeting of our stockholders to obtain approval of our Charter Amendment and, more specifically, to grant our Board authorization, in its sole discretion, to effectuate one or more Reverse Splits during the succeeding 12 months at a specific ratio within a range from [one-for-250 to one-for-1,500], and the timing of any such Reverse Splits. Our Board has effected such Reverse Split at a ratio of [●] (the “Specific Reverse Split”) in connection with this offering and our intended listingsale of our shares of Common Stock under the Equity Line and exercise of the EPA Warrant and the Placement Warrants (collectively, the “Warrants”) if they are exercised for cash. The resale of the 702,280,139 shares by the Selling Stockholders pursuant to this Prospectus is referred to as the “Offering.”

We may draw on the Nasdaq Capital Market (“Nasdaq”); however,Equity Line from time to time, as and when we cannot guarantee thatdetermine appropriate in accordance with the Specific Reverse Splitterms and conditions of the EPA. To date, we have not sold any shares pursuant to the EPA.

Each of the Selling Stockholders is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”). The Selling Stockholders may sell the shares of Common Stock described in this Prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information about how the Selling Stockholders may sell the shares of Common Stock being registered pursuant to this Prospectus.

We will pay the expenses incurred in registering the shares of Common Stock, including legal and accounting fees. See “Plan of Distribution.”

We also entered into a registration rights agreement (the “Registration Rights Agreement”) with Mast Hill, pursuant to which we agreed to file a Registration Statement to register the resale of the Put Shares and the resale of the EPA Warrant Shares. Pursuant to the Registration Rights Agreement, we agreed to (i) file the Registration Statement within 45 calendar days from the Closing Date, (ii) use reasonable efforts to cause the Registration Statement to be sufficient for Nasdaqdeclared effective under the Securities Act as promptly as possible after the filing thereof, and (iii) use its reasonable efforts to approve our initial listing application.keep such Registration Statement continuously effective under the Securities Act until all of the Put Shares have been sold thereunder or pursuant to Rule 144.

Our Common Stock is quoted on the OTC Markets Group Inc.’s (the “OTCM”) Pink^® Open Market (the “Pink Market”) under the symbol “KGKG.” We have applied to listOn May 15, 2023, the last reported sales price for our shares of Common Stock on Nasdaq under the trading symbol “KGKG”. The successful listing of our shares of Common Stock on Nasdaq is a condition of this offering. was $0.0027 per share.

We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectusProspectus and future filings. However, we have elected not to take advantage of the extended transition period allowed for emerging growth companies for complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act. The [Common Stock Purchase Warrants] and the Pre-funded Warrants will not be listed on any national securities exchange or other nationally recognized trading system.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 10.6.

We have grantedNeither the underwriters the right to purchase up to an additional [●] shares of Common Stock and/or Common Stock Purchase Warrants to cover over-allotments, if any assuming an initial public offering price of $[●] per Unit. The underwriters can exercise this right at any time within [45] days after the date of this prospectus. In addition, we will issue to the underwriters Warrants to purchase a number of shares of Common Stock equal to an aggregate of [5.0]% of the shares of Common Stock and/or Pre-funded Warrants sold in the offering. The exercise price of the underwriters’ Warrants is equal to [100]% of the offering price of the shares of Common Stock and/or Pre-funded Warrants offered hereby. The underwriters’ Warrants are exercisable beginning [six] months from the effective date of the offering, from time to time, in whole or in part, within [five] years commencing from the effective date of the offering.

The underwriters expect to deliver the securities against payment on or about , 2022.

TheU.S. Securities and Exchange Commission nor any state securities commission has not approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.Prospectus. Any representation to the contrary is a criminal offense.

The Benchmark Company

date of this Prospectus is May [__], 2023

Prospectus dated __________, 2022

TABLE OF CONTENTS

You should only rely on the information contained in this Prospectus or that we have referred you to. We have not, and the Selling Stockholders have not, authorized anyone to provide you with different information. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the shares of our Common Stock offered by this Prospectus. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any shares of our Common Stock in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Prospectus nor any sale made in connection with this Prospectus means that the information contained in this Prospectus is correct after the date of this Prospectus. The information in this Prospectus is accurate only as of the date on the front cover of this Prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

ABOUT THIS PROSPECTUS

This prospectus is part of a Registration Statement on Form S-1 that we filed with the SEC.

You should read this prospectus and the related registration statement carefully. This prospectus and registration statement contain important information you should consider when making your investment decision. See “Where You Can Find More Information” in this prospectus.

Neither we nor the underwriters have authorized anyone to provide you with information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give to you. The information contained in this prospectus or any free writing prospectus is accurate only as of the date of this prospectus or such free writing prospectus, regardless of the time of delivery of this prospectus or any free writing prospectus.

We are offering to sell, and seeking offers to buy, securities only in jurisdictions where offers and sales are permitted. Neither we nor the underwriters have taken any action to permit a public offering of our securities or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

Except as noted information contained in this prospectus gives effect to a proposed 1-for-[●] Reverse Split (the “Specific Reverse Split”).

Except as otherwise indicated, references in this prospectus to “KGKG,” the “Company,” “we,” “us” and “our” refer to Kona Gold Beverage, Inc. and its consolidated subsidiaries.

PROSPECTUS SUMMARY

This summary highlights certain information contained elsewhere in this prospectus.Prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the following summary together with the entire prospectus,Prospectus, especially the “Risk Factors” section of this prospectusProspectus and our consolidated financial statements and the notes thereto appearing elsewhere in this prospectusProspectus before deciding to invest in our securities. For more information on our business refer to the “Business”“Description of Business” section of this prospectus.Prospectus. Some of the statements in this prospectusProspectus constitute forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the “Risk Factors” and other sections of this prospectus.Prospectus. See “Cautionary Note Regarding Forward-Looking Statements.”

Company Overview

We are a lifestyle company that specializes in developing hemp and cannabidiol (“CBD”)premium beverage products in the functional beverage and fitnessbetter-for-you markets. Focusing on the hempbetter-for-you low-calorie and low-carb lemonade, low-calorie and high-in-vitamins energy drink, CBDdrinks, and CBD-infused energy water, and CBD water markets, we believe that we have positioned ourselvesour brands as a premium lifestyle brand. leaders in their respective markets.

We are currently selling productssell Kona, HighDrate, and Ooh La Lemin through resellers, our website,websites, leading ecommerce platforms, and distributors that span across 12distribution partners in 18 states. Our products are available in a wide variety of stores,retail locations, including convenience andstores, grocery stores, smoke shops, and gift shops. We also distributespecialty stores. Gold Leaf distributes our own beverage brands, as well as products purchased for resale from several other beverage manufacturers. These premium beverages and snacks to over 1,700are available in more than 1,500 grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. In addition to distributing our own beverage products, we also distribute other products, including alkaline waters, beverages for kids, energy drinks, fruit-flavored sodas, low-carb lemonade, healthy aloe juice drinks, snacks, and a variety of CBD-infused products, all of which complement our current product offerings.stores.

Corporate Information

We were originally incorporated as Class-ique Talent Agency, Inc. (“CTA”), under the laws of the State of Nevada in March 1997. In October 2001, CTA entered into an Agreement and Plan of Reorganization (the “Reorganization Plan”) with PhaserTek, Inc., a Delaware corporation (“PhaserTek”), pursuant to which CTA acquired all of the outstanding shares of common stock of PhaserTek in exchange for shares of common stock of CTA, resulting in PhaserTek becoming a wholly-owned subsidiary of CTA. In accordance with the terms of the Reorganization Plan, CTA changed its name to PhaserTek Medical, Inc. (“PhaserTek Medical”) in 2002. In 2004, PhaserTek Medical changed its name to Union Equity, Inc. (“UE Nevada”). For purposes of changing UE Nevada’s state of incorporation, UE Nevada formed Union Equity, Inc. in the State of Delaware (“UE Delaware”) in 2004. Pursuant to Articles of Merger, in December 2004, UE Nevada merged with and into UE Delaware, the surviving company. In July 2015, we changed our name to Kona Gold Solutions, Inc. In October 2020, we changed our name to Kona Gold Beverage, Inc.

We have fourthree wholly-owned subsidiaries: (i) Kona Gold, LLC (“Kona”), a Delaware limited liability company formed in August 2015; (ii) HighDrate, LLC (“HighDrate”), a Florida limited liability company formed in January 2018; (iii) S and S Beverage, Inc. (“S and S”), a Wisconsin corporation formed in June 2018 that we acquired in February 2021; and (iv)(iii) Gold Leaf Distribution LLC (“Gold Leaf”), a Florida limited liability company formed in January 2019.

Kona focuses on creating great-tasting and healthy hemp-infused energy drinks in the functional beverage market for those who lead an active lifestyle. Kona is a proud member of the Hemp Industries Association (“HIA”) and strives to promote the benefits of hemp seed in our products. The hemp seed in our energy drinks contains all 20 amino acids that are already found in the human body. For those leading a healthy lifestyle,

Our principal executive office is located at 746 North Drive, Suite A, Melbourne, Florida 32934. We also have a warehouse in Greer, South Carolina that serves as the main distribution center for Gold Leaf and Kona Gold, and a warehouse in Conway, South Carolina that serves as a secondary distribution center for Gold Leaf. Our telephone number is (844) 714-2224. We maintain the following website addresses: websites www.konagoldbeverage.com, www.konagoldhemp.com, www.highdrateme.com, www.drinklemin.com, and www.goldleafdist.com.

HighDrate focusesOur Common Stock is quoted on the development and marketing of CBD-infused energy waters available in a variety of great-tasting flavors. HighDrate’s CBD-infused energy waters are geared toPink Market under the fitness and wellness markets. Our CBD-infused energy waters are powered by the patented technology of Alkame Holdings Inc.’s wholly-owned subsidiary, Alkame Water Inc. (“Alkame”), which provides premium oxygenated alkaline water with natural antioxidants. All of our waters are infused with CBD.symbol “KGKG.”

S and S focuses on the development and marketing of Ooh La Lemin, which is a better-for-you lemonade that is available in still and sparkling and has no added sugar, is low in carbs, and has only 15 or 10 calories, respectively. Ooh La Lemin lemonade is available in four flavors: (i) Original Lemonade, (ii) Blue Raspberry Lemonade, (iii) Peach Lemonade, and (iv) Strawberry Lemonade. Ooh La Lemin Sparkling is available in six flavors: (i) Original Lemonade, (ii) Cucumber Watermelon Lemonade, (iii) Blue Raspberry, (iv) Pineapple Mango, (v) Citrus Splash, and (vi) Huckleberry.

Gold Leaf focuses on the distribution of premium beverages and snacks, such as alkaline waters, beverages for kids, energy drinks, fruit-flavored sodas, low-carb lemonade, healthy aloe juice drinks, snack products, as well as a variety of CBD-infused products, in key markets. These markets include over 1,700 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We qualify as an “emerging growth company,” as defined in the JOBS Act, enacted in April 2012. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including the option to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Prospectus, not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “SOX Act”) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this Prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

We may take advantage of these provisions until the earliest to occur of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of this offering, (b) in which we have total annual gross revenues of at least $1.07 billion, or (c) in which we are deemed to be a “large accelerated filer,” under the rules of the SEC, which means the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this extended transition period. As a result, we will comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Intellectual Property

We have three trademarks that are registered with the U.S. Patent and Trademark Office (“USPTO”) for use in the Beverages Segment. One is for use of “Kona Gold Hemp Energy Drinks” in the Beverages Segment. The second trademark is for the use of “HighDrate” in the Beverages Segment. The third trademark is for the use of “OOH LA LEMIN” in the Beverages Segment. We have also applied for a trademark for “Storm” to use in the Beverages Segment. We do not have any patents.

Recent Developments

In January 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on our consumer demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread of the outbreak and the impact on our consumers and employees, all of which are uncertain and cannot be predicted. To date, COVID-19 has adversely impacted new product launches by Kona and HighDrate, Gold Leaf’s distribution of new product lines, and the commencement of new distribution contracts. Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations. See “Risk Factors” for additional information regarding certain risks associated with the COVID-19 pandemic. However, we acquired S and S during the COVID-19 pandemic and increased our product variety due to the acquisition.2023 Securities Purchase Agreement

Risk FactorsPursuant to a Securities Purchase Agreement dated as of March 13, 2023 (the “March SPA”), we, completed a private placement of a Senior Secured Promissory Note (the “March Senior Note”) with an initial principal amount of $475,000 and the grant of a Common Stock Purchase Warrant (the “March SPA Warrant”) that is exercisable for the purchase of up to an aggregate of 80,000,000 shares (the “March SPA Warrant Shares”) of our Common Stock with Mast Hill. In addition, to secure our obligations to Mast Hill under the March Senior Note, we also entered into a Security Agreement (the “March Security Agreement”) with and in favor of Mast Hill. Our subsidiaries are also parties to the March Security Agreement.

The transactions contemplated by the March SPA were consummated on March 15, 2023 (the “March SPA Issue Date”). Upon the funding, we sold and issued the March Senior Note and granted the March SPA Warrant. Pursuant to the March SPA, the purchase price for the March Senior Note was $475,000, less $43,500 in fees, which consisted of an 8% “original issue discount” of $38,000 and $5,500 for Mast Hill’s legal fees. In connection with this transaction, we paid Darbie a $30,500 fee.

The March Senior Note is due 12 months from its issuance date and is secured by all of our assets and the assets of each of our subsidiaries pursuant to the March Security Agreement. Initially, the March Senior Note is convertible into shares of our Common Stock (the “March Conversion Shares”) at a fixed conversion price of $0.0045 per share, subject to adjustment due to merger, consolidation, exchange of shares, recapitalization, reorganization, or similar event as set forth in the March Senior Note (the “March Conversion Price”). The March Senior Note contains an adjustment provision that, subject to certain exceptions, reduces the conversion price if we issue shares of our Common Stock or common stock equivalents at a price lower than the then-current March Conversion Price of the March Senior Note. Upon any stock splits, reverse stock splits, distributions, stock dividends, or other similar event, Mast Hill will be entitled to participate in such an event on an “as converted” basis. The March Senior Note is subject to a “conversion blocker” such that Mast Hill cannot convert any portion of the March Senior Note that would result in Mast Hill and its affiliates holding more than 4.99% of the then-issued and outstanding shares of our Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the March Senior Note or exercise of the March SPA Warrant that had not then been converted or exercised, respectively). Mast Hill does not have the right to convert the March Senior Note until six months after the March SPA Issue Date. The March Senior Note accrues interest at an annual rate equal to 10% and is due and payable on its maturity date (or sooner if Mast Hill converts the March Senior Note or otherwise accelerates the maturity date, as provided for in the March Senior Note). Interest is payable in cash on the maturity date or, in shares of the Common Stock at the then-current March Conversion Price if Mast Hill converts the March Senior Note or otherwise accelerates the maturity date, as provided for in the March Senior Note.

At our option, we have the right to redeem, in full, the outstanding principal and interest under the March Senior Note prior to its maturity date; provided, that, as of the date of the then-holder’s receipt of the redemption notice, there has not been an Event of Default. We must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a $750 administrative fee (the “March Redemption Amount”). We must provide seven Trading Days’ (as such term is defined in the March Senior Note) prior notice to the then-holder of the March Senior Note of our intent to make a redemption. If such notice of redemption is received six months after the March SPA Issue Date, the then-holder has the right to convert any or all of such to-be-prepaid amount into shares of our Common Stock in accordance with the conversion provisions of the March Senior Note prior to such redemption.

Further, commencing on May 10, 2023, and continuing on the tenth day of each calendar month thereafter, we are required to redeem an amount equivalent to the sum of $2.00 for each 12-count case of our beverages that we sell in the ordinary course, calculated two months in arrears. Accordingly, the first redemption payment is due and payable on May 10, 2023 for the cases sold during the month of March, 2023. Mandatory redemption payments are based upon revenues recognized by us in accordance with US GAAP for each such month, rather than upon the receipt by us of funds received from sales during a relevant month. The above-referenced seven trading days’ prior notice and conversion provisions do not apply to any of the mandatory redemption payments.

We also granted the March SPA Warrant to purchase up to an aggregate of the 80,000,000 March SPA Warrant Shares. The March SPA Warrant has a five-year term and is immediately exercisable at an exercise price of $0.0045 per share, subject to adjustment and is exercisable by the then-holder on a “cashless” basis.

The March SPA Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if we issue shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the March Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will result in an equitable adjustment of the exercise price of the March Warrant and, in certain circumstances, the number of March SPA Warrant Shares. The March SPA Warrant is subject to an “exercise blocker,” such that Mast Hill cannot exercise any portion of the March SPA Warrant that would result in Mast Hill and its affiliates holding more than 4.99% of the then-issued and outstanding shares of our Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the March SPA Warrant or conversion of the March Senior Note that had not then been exercised or converted, respectively).

April 2023 Securities Purchase Agreement

Pursuant to a Securities Purchase Agreement dated as of April 25, 2023 (the “April SPA”), we completed a private placement of a Senior Secured Promissory Note (the “April Senior Note”) with an initial principal amount of $230,000 and the grant of a Common Stock Purchase Warrant (the “April Warrant”) that is exercisable for the purchase of up to an aggregate of 43,600,000 shares (the “April Warrant Shares”) of our Common Stock with a third-party investor (the “Mast Hill”). In addition, to secure our obligations to Mast Hill under the April Senior Note, we also entered into a Security Agreement (the “April Security Agreement”) with and in favor of Mast Hill. Our subsidiaries are also parties to the April Security Agreement.

The transactions contemplated by the April SPA were consummated on April 28, 2023 (the “April Issue Date”). Upon the funding, we sold and issued the April Senior Note and granted the April Warrant. Pursuant to the April SPA, the purchase price for the April Senior Note was $230,000, less $21,900 in fees, which consisted of an 8% “original issue discount” of $18,400 and $3,500 for Mast Hill’s legal fees. In connection with this transaction, we paid Darbie a $6,400 fee.

The April Senior Note is due 12 months from its issuance date and is secured by all of our assets and the assets of each of our subsidiaries pursuant to the April Security Agreement. The security interest granted to Mast Hill under the April Security Agreement is subordinate to the March Security Agreement. Initially, the April Senior Note is convertible into shares of our Common Stock (the “April Conversion Shares”) at a fixed conversion price of $0.004 per share, subject to adjustment due to merger, consolidation, exchange of shares, recapitalization, reorganization, or similar event as set forth in the April Senior Note (the “April Conversion Price”). The April Senior Note contains an adjustment provision that, subject to certain exceptions, reduces the conversion price if we issue shares of our Common Stock or common stock equivalents at a price lower than the then-current April Conversion Price of the April Senior Note. Upon any stock splits, reverse stock splits, distributions, stock dividends, or other similar event, Mast Hill will be entitled to participate in such an event on an “as converted” basis. The April Senior Note is subject to a “conversion blocker” such that Mast Hill cannot convert any portion of the April Senior Note that would result in Mast Hill and its affiliates holding more than 4.99% of the then-issued and outstanding shares of our Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the April Senior Note or exercise of the April Warrant that had not then been converted or exercised, respectively). Mast Hill does not have the right to convert the April Senior Note until six months after the April Issue Date. The April Senior Note accrues interest at an annual rate equal to 10% and is due and payable on its maturity date (or sooner if Mast Hill converts the April Senior Note or otherwise accelerates the maturity date, as provided for in the April Senior Note). Interest is payable in cash on the maturity date or, in shares of the Common Stock at the then-current April Conversion Price if Mast Hill converts the April Senior Note or otherwise accelerates the maturity date, as provided for in the April Senior Note.

At our option, we have the right to redeem, in full, the outstanding principal and interest under the April Senior Note prior to its maturity date; provided, that, as of the date of the then-holder’s receipt of the redemption notice, there has not been an Event of Default. We must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a $750 administrative fee (the “April Redemption Amount”). We must provide seven Trading Days’ (as such term is defined in the April Senior Note) prior notice to the then-holder of the April Senior Note of our intent to make a redemption. If such notice of redemption is received six months after the April Issue Date, the then-holder has the right to convert any or all of such to-be-prepaid amount into shares of our common Stock in accordance with the conversion provisions of the April Senior Note prior to such redemption.

Further, commencing on May 10, 2023, and continuing on the tenth day of each calendar month thereafter, we are required to redeem an amount equivalent to the sum of $2.00 for each 12-count case of our beverages that we sell in the ordinary course, calculated two months in arrears. Accordingly, the first redemption payment is due and payable on May 10, 2023 for the cases sold during the month of March, 2023. Mandatory redemption payments are based upon revenues recognized by us in accordance with US GAAP for each such month, rather than upon the receipt by us of funds received from sales during a relevant month. The above-referenced seven trading days’ prior notice and conversion provisions do not apply to any of the mandatory redemption payments.

Notwithstanding the foregoing, if we have paid the mandatory case prepayment to Mast Hill during an applicable calendar month pursuant to the March Senior Note, then we do not have an obligation to make a mandatory case prepayment in that applicable calendar month with respect to the April Senior Note.

First Amendment to Secured Debenture

On March 23, 2023, the Company entered into a First Amendment to Secured Debenture (the “First Amendment”) to amend a Secured Debenture (the “Debenture”), dated as of March 25, 2022. The original note was in the principal amount of $250,000 and matured on March 24, 2023. The Debenture is amended and restated in its entirety with the following terms (i) note payable matures March 24, 2024; (ii) interest shall accrue on the outstanding principal at a rate equal to twelve percent (12%) per annum; (iii) monthly payments of principal and interest shall be made in the amount of $22,212 starting April 24, 2023 until the maturity date, which the entirety of the balance of principal plus interest is due.

Our Corporate Information2023 Equity Purchase Agreement

Our principal executive officePursuant to an Equity Purchase Agreement dated as of March 30, 2023 (the “EPA”), we (i) agreed to sell to Mast Hill up to $5,000,000 (the “Maximum Commitment Amount”) of shares of our Common Stock (the “Put Shares”) and (ii) granted to Mast Hill a Common Stock Purchase Warrant (the “EPA Warrant”) that is locatedexercisable for the purchase of up to an aggregate of 56,000,000 shares (the “EPA Warrant Shares”) of our Common Stock.

Upon the terms and conditions set forth in the EPA, we have the right, but not the obligation, to direct Mast Hill, by delivery to Mast Hill of a Put Notice from time to time, to purchase shares of our Common Stock (i) in a minimum amount not less than $25,000.00 and (ii) in a maximum amount up to the lesser of (a) $500,000.00 or (b) 150% of the Average Daily Trading Value of our Common Stock (as defined in the EPA). At any time and from time to time through and including March 30, 2025 (the “Commitment Period”), except as provided in the EPA, we may deliver a Put Notice to Mast Hill.

The Commitment Period commences on the Execution Date, and ends on the earlier of (i) the date on which Mast Hill has purchased Put Shares pursuant to the EPA equal to the Maximum Commitment Amount, (ii) March 30, 2025, (iii) written notice of termination by us to Mast Hill (which cannot occur during any Valuation Period or at 746 North Drive, Suite A, Melbourne, Florida 32934. any time that Mast Hill holds any of the Put Shares), (iv) this Registration Statement for the Put Shares is no longer effective after its initial effective date, or (v) the date that, pursuant to or within the meaning of any Bankruptcy Law, we commence a voluntary case or any person commences a proceeding against us, a Custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors.

We also havegranted the EPA Warrant to purchase up to an aggregate of 56,000,000 EPA Warrant Shares. The EPA Warrant has a warehousefive-year term and is immediately exercisable at an exercise price of $0.0045 per share, subject to adjustment and is exercisable by the then-holder on a “cashless” basis. The EPA Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if we issue shares of Common Stock or common stock equivalents at a price lower than the then-current exercise price of the EPA Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will result in Greer, South Carolinaan equitable adjustment of the exercise price of the EPA Warrant and, in certain circumstances, the number of EPA Warrant Shares. The Warrant is subject to an “exercise blocker,” such that serves asMast Hill cannot exercise any portion of the main distribution centerEPA Warrant that would result in Mast Hill and its affiliates holding more than 4.99% of the then-issued and outstanding shares of Common Stock following such exercise (excluding, for Gold Leaf and Kona Gold, and a warehouse in Conway, South Carolinapurposes of such determination, shares of the Common Stock issuable upon exercise of the EPA Warrant or Put Notice that serves as a secondary distribution center for Gold Leaf. Our telephone number is (844) 714-2224. We maintain the following website addresses: websites www.konagoldbeverage.com, www.konagoldhemp.com, www.highdrateme.com, www.drinklemin.com, and www.goldleafdist.comhad not then been exercised, respectively).

Finder’s Fee Agreement

On May 26, 2022, we entered into a finder’s fee agreement with Darbie, whereby Darbie provided introduction services to qualified funders for the Company. In consideration for any closing introductions, Darbie would receive a finder’s fee in cash equal to 3% of the gross proceeds of an equity/convertible debt transaction or 3% of the gross proceeds of a non-convertible debt transaction, plus equity in the form of non-callable warrants to purchase common stock equal to 4% of the amount raised.

The Offering

SUMMARY OF THE OFFERING

The number of shares of Common Stock to be outstanding after this offering is based on [●] shares of Common Stock outstanding as of [●], 2022, after giving effect to the Specific Reverse Split and excludes:

Unless otherwise indicated, all information in this prospectus reflects or assumes: (i) no exercise of the Common Stock Purchase Warrants or Warrants issued to the underwriters; and (ii) no exercise by the underwriters of their option to purchase up to an additional [●] shares of Common Stock and/or Pre-funded Warrants in this offering.

RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider and evaluate all of the information contained in this Prospectus and in the documents that we incorporate by reference into this Prospectus before you decide to purchase our securities. In particular, you should carefully consider and evaluate the risks and uncertainties described under the heading “Risk Factors” in this Prospectus. Any of the risks and uncertainties set forth in this Prospectus, as updated by annual, quarterly, and other reports and documents that we file with the SEC and incorporate by reference into this Prospectus could materially and adversely affect our business, results of operations, and financial condition, which in turn could materially and adversely affect the value of our securities. As a result, you could lose all or part of your investment. This prospectusProspectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See “Cautionary Note Regarding Forward-Looking Statements.”

We have a limited operating history on which to judge our new business prospects and management.

We commenced operations in the beverage industry in 2015. Accordingly, we have only a limited operating history upon which to have to base an evaluation of our business and prospects. Operating results for future periods are subject to numerous uncertainties and we cannot assure you that we will achieve or sustain profitability. Our prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies in new and rapidrapidly evolving markets. We cannot assure you that we will successfully address any of these risks.

We have incurred losses in recent years and may never achieve or maintain profitability.

We have had losses for several years and had an accumulated deficit of $21,250,260$23,613,208 at June 30,December 31, 2022, which included our net loss of $4,950,087$7,313,035 for the six monthsyear ended June 30,December 31, 2022, as compared to an accumulated deficit of $11,472,975,$16,300,173, which included net loss of $2,192,939 for six months ended June 30, 2021 and our net loss of $7,020,127$7,020,137 for the year ended December 31, 2021. As of March 31, 2023, our accumulated deficit had increased to $25,205,765, which increase included our net loss of $1,592,557 for three months ended March 31, 2023. We have implemented several initiatives intended to improve our revenues and reduce our operating costs with a goal of profitability. If we are unsuccessful in this regard, it will have a material adverse impact on our business, prospects, operating results, and financial condition. Our prior losses have had, and any future losses may continue to have, an adverse effect on our working capital. If we fail to generate revenue and become profitable, or if we are unable to fund our continuing losses, our stockholders could lose all or part of their investment.

Our recurring losses and significant accumulated deficit have raised substantial doubt regarding our ability to continue as a going concern.

We have experienced recurring operating losses over the last two years and have a significant accumulated deficit. We expect to continue to generate operating losses and consume significant cash resources for the foreseeable future. Without additional financing, these conditions raise substantial doubt about our ability to continue as a going concern, meaning that we may be unable to continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course of operations. If we seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all. If we are unable to obtain sufficient funding, our business, prospects, financial condition, and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders will lose all or a part of their investment.

We do not have sufficient working capital to fund our planned operations, and, as a result, we may need to raise additional capital in the future, which may not be available when needed, on acceptable terms or at all.

We have limited capital resources. To date, we have financed our operations entirely through equity investments by our management and other investors, the incurrence of debt, salary deferments, and stock issuance deferments, and we expect to continue to do so in the foreseeable future. During the yearyears ended December 31, 20212022 and the six months ended June 30, 2022 (an 18-month period),2021, we relied on aggregate of approximately $5.25$6.3 million from incurrence of debt, salary deferments, and stock issuance deferments, to fund our operations. On July 28,

We believe we will have enough cash to sustain operations through December 31, 2023, utilizing certain funds to be made available by the EPA. Subsequent to December 31, 2022, we soldreceived gross proceeds of $990,000 on the sale of notes, including the draw of $200,000 from the issuance of $200,000 line of credit on March 7, 2023, the draw of $85,000 from the issuance of $85,000 line of credit on March 9, 2023, the issuance of a $475,000 debenture on March 13, 2023, and issued an additional $595,000 debenture. We believe our current cash resources will fund three monthsthe issuance of our financial obligations and operations.a $230,000 debenture on April 25, 2023, as well as the entry into the EPA of up to $5,000,000 on March 30, 2023 (that, as of the date of this Prospectus, we have not utilized). Taking into account our planned activities and sources of capital, we believe that we will not require approximately $[●] million to fundadditional funding of our financial obligations and operations for the next 12 months in excess of what we anticipate that we will generate from our operations.operations and the potential use of the EPA. However, our estimates of our operating revenues and expenses and working capital requirements could be incorrect, and we may use our cash resources faster than we anticipate. Further, some or all of our ongoing or planned investments may not be successful and could further deplete our capital without immediate, or any, cash returns.

Until we can generate sufficient revenues to finance our cash requirements from our operations, which we may never do, we may need to increase our liquidity and capital resources by one or more measures, which may include, among others, reducing operating expenses, restructuring our balance sheet by negotiating with creditors and vendors, entering into strategic partnerships or alliances, or raising additional financing through the issuance of debt, equity, or convertible securities. Further, even if our near-term liquidity expectations prove correct, we may still seek to raise capital through one or more of these financing alternatives. However, we may not be able to obtain capital when needed or desired, on terms acceptable to us or at all.

Inadequate working capital would have a material adverse effect on our business and operations and could cause us to fail to execute our business plan, fail to take advantage of future opportunities, or fail to respond to competitive pressures or customer requirements. A lack of sufficient funding may also require us to significantly modify our business model and/or reduce or cease our operations. Furthermore, if we continue to issue equity or convertible debt securities to raise additional funds, our existing stockholders may experience significant dilution, and the new equity or debt securities may have rights, preferences, and privileges that are superior to those of our existing stockholders. We may incur substantial costs in pursuing any future capital-raising transactions, including investment banking, legal and accounting fees, printing and distribution expenses, and other similar costs, which would reduce the benefit of the capital received from the transaction.

The COVID-19 pandemic could have a material adverse impact on our business, results of operations, and financial condition.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, the WHO declaredannounced a global health emergency because of a new strain of coronavirus (known as COVID-19) that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a “Public Health Emergency of International Concern.” This worldwide outbreak has resultedpandemic based on the rapid increase in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily closingglobal exposure. The COVID-19 pandemic is disrupting businesses and facilities. These restrictions continued in fiscal year 2021 with continued outbreaks,affecting production and future prevention and mitigation measures, have had an adverse impact on global economic conditions and subsequent adverse impact on consumer confidence and spending, and adversely affect the supplysales across a range of industries, as well as the demand for, our products. Uncertainties regarding the economic impact of COVID-19 have and are likely to result in sustained market turmoil, which could also negatively impact our business, financial condition, and cash flow. For example, to date, COVID-19 has adversely impacted new product launches by Kona and HighDrate, Gold Leaf’s distribution of new product lines, and the commencement of new distribution contracts, all of which adversely affected our business, financial condition, and cash flow. However, we acquired S and S during the COVID-19 pandemic and increased our product variety due to the acquisition, resultingcausing volatility in the commencement of distribution contracts.

Our co-packers source raw materials used in our products from suppliers located in the United States. The impact of COVID-19 on these suppliers, or any of our other suppliers, distributors and resellers, or transportation or logistics providers, have and may continue to negatively affect the price and availability of our ingredients and/or packaging materials and impact our supply chain. If the disruptions caused by COVID-19 continue for an extended period of time, our ability to meet the demands of our consumers may be materially impacted. To date, we have not experienced any reduction in the available supply of our products; however, we have been impacted by transportation and logistical delays. Additionally, at times during the COVID-19 pandemic, many of our employees, including members of our management team, have been working remotely as a result of the closure of our offices and warehouses in compliance with local and state regulations in response to the COVID-19 pandemic. To date, these employees have returned to our offices, and we are once again fully operational. Our warehouses operated as normal. If our operations or productivity become, or continue to be, impacted throughout the duration of the COVID-19 outbreak and government-mandated closures, those occurrences may negatively impact our business, financial condition, and cash flow. The extent to which the COVID-19 pandemic will further impact our business will depend on future developments and, given the uncertainty around the extent and timing of the potential future spread or mitigation and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our business at this time.

markets. The extent of the effectimpact of the COVID-19 pandemic on our operationalthe Company’s consumer demand, sales, and financial performance will depend on futurecertain developments, including, among other things, the duration spread, and intensityspread of the outbreak and the impact on the Company’s consumers and employees, all of which are uncertain and difficult to predict, considering the rapidly evolving landscape. As a result, itcannot be predicted. Management is not currently possible to ascertain the overall impact of COVID-19actively monitoring this situation and potential impacts on our business. However, if the pandemic continues for a prolonged period, it could have a material adverse effect on our business,financial condition, liquidity, and results of operations, financial condition, and cash flow and adversely impact the quoted price of our Common Stock on the over-the-counter market.operations.

We sell our products in highly competitive markets, which results in pressure on our profit margins and limits our ability to maintain or increase the market share of our products.

The beverage business is a highly competitive and risky business, and is subject to significant competition and pricing pressures. We compete with many national, regional, and local businesses, many of which have more resources than we do. We could experience increased competition from existing or new companies in the energy and beverage market, which could create increasing pressures to grow our business. Competitors could offer products with prices that may match or are lower than the prices we offer. While we believe that the products we offer are generally competitive with those offered by other companies, continued pricing pressure or improvements in research and shifts in consumer preferences away from hemp-based beverages could adversely impact our consumer base or pricing structure and could have a material and adverse effect on our business, financial condition, results of operations, and cash flow.

Our future growth is largely dependent upon our ability to expand successfully into new markets and new distribution channels, as well as to attract new consumers to our products.

Our business operates in markets that are characterized by rapidly changing products, evolving industry standards, and potential new entrants. Our future success depends upon a number of factors, including our ability to expand our product offerings into new territories and locations throughout the United States, including having our products offered in national retail stores such as Costco, Walmart, and Target. We cannot provide any assurance that our products will be offered in any such national chain. Failure to expand our distribution network to include distributors with reach into national retail stores will have an adverse effect on our growth, which, in turn, could adversely affect our business, financial condition, results of operations, and cash flow.

Changes in consumer preferences and perceptions may lessen the demand for our products, which would reduce sales and harm our business.

We believe we are highly dependent upon positive consumer perceptions of the safety and quality of our products, as well as similar products distributed by other companies. Consumer perception of CBD or hemp products in particular can be substantially influenced by scientific research findings, national media attention, and other publicity about product use. Adverse publicity from these sources regarding the safety, quality, or efficacy of our products could harm our reputation and results of operations. If consumer preferences and perceptions of our products change, the resulting demand for our products could decrease, which could adversely affect our business, financial condition, and results of operations.

Increases in our costs materially affect our operating results.

Our principal beverage products contain hemp, CBD, and ginseng. Increases in costs of these, or other ingredients in our products paid by our co-packers, with respect to our Company, or our suppliers, with respect to our Distribution Subsidiary, and the costs of which are passed on to us, could have a material adverse effect on our profit margins, as well as on our business, financial condition, and operating results. Further, other factors, such as inflation, increased food costs, increased labor and employee benefit costs, and increased energy costs may adversely affect our operating costs and we may not be able to pass along any such increased costs to our consumers. Increases in costs could adversely affect our profitability and operating results.

We do not have long-term contracts with any of our co-packers or our suppliers, and as a result they could seek to increase prices significantly or fail to deliver.

We do not rely on written contracts or long-term arrangements with our co-packers or our suppliers. Although we have not experienced significant problems with our co-packers or our suppliers, as applicable, our co-packers or suppliers may implement significant price increases or may not meet our requirements in a timely fashion, if at all. If any undesirable issues occur with our current co-packers or suppliers, we may be forced to find other co-packers and suppliers. We may encounter difficulties in finding substitute co-packers in a timely manner, if at all, given the strict licensing requirements in the CBD industry and the limited number of co-packers that currently hold such licenses that are necessary to comply with federal law. We may not be able to obtain terms as favorable as those received from our current co-packers and suppliers, which in turn would increase our costs. In addition, it is possible that the substitute co-packers and suppliers may not have the necessary materials to meet our demand.

We must monitor our inventory and product mix against forecasted demand on a continuous basis. If we underestimate demand, we risk having inadequate supplies. We also face the risk of having too much inventory on hand that may reach its expiration date and become unsalable, and we may be forced to rely on markdowns or promotional sales to dispose of excess or slow-moving inventory. If we are unable to manage our supply chain effectively, our operating costs could increase and our profit margins could decrease, which could have a material adverse effect on our financial condition, operating results, and cash flow.

By virtue of the size of our operations, we may suffer from inflation-driven cost pressure and margin uncertainty and periodic shortages of raw materials and packaging.

Because of the size of our operations and the type of relationships that we have with our co-packers and suppliers, we are increasingly vulnerable to potentially unmanageable increases in the prices that we are charged, which increases we may not be able to pass on, directly or indirectly, in full to our customers, if at all. Further, by virtue of the supply chain issues that have arisen since the inception of the COVID-19 pandemic, we may not always be able to obtain raw materials or packaging materials for our products on the schedules that we require. This inflation-driven cost and margin uncertainty, coupled with raw materials and packaging materials issues could adversely affect our profitability and operating results.

Any prolonged disruption in the operations of any of our co-packing facilities could harm our business.

All of our distribution is managed domestically. Any prolonged disruption in the operations of any of these facilities, whether due to technical or labor difficulties, destruction or damage to the facility, real estate issues, or other reasons, could result in increased costs and reduced revenues and our profitability and prospects could be harmed.

We may not be able to manage our co-packing capabilities effectively, which may adversely affect our results of operations.

We must accurately forecast demand for all of our products in order to ensure that we have enough products available to meet the needs of our consumers. Our forecasts are based on multiple assumptions that may cause our estimates to be inaccurate and affect our ability to ensure that we have sufficient co-packing capacity to meet the demand for our products, which could prevent us from meeting increased consumer demand and harm our brand and our business. If we do not accurately align our co-packing capabilities with demand, our business, financial condition, and results of operations may be materially adversely affected.

If the ingredients used in our products are contaminated, alleged to be contaminated, or are otherwise rumored to have adverse effects, our results of operations could be adversely affected.

We, through our co-packers, buy ingredients from a variety of third-party suppliers. If these materials are alleged or prove to include contaminants that affect the safety or quality of our products or are otherwise rumored to have adverse effects, for any reason, we may sustain the costs of, and possible litigation resulting from, a product recall and need to find alternative ingredients, to delay production, or to discard or otherwise dispose of products, which could materially adversely affect our business, financial condition, and results of operations. In addition, even if product liability claims against us are not successful or are not fully pursued, these claims could be costly and time-consuming and could require our management to spend their time defending claims, rather than operating our business.

Our business depends, in part, on the sufficiency and effectiveness of our marketing.

Due to the competitive nature of our industry, we must effectively and efficiently promote and market our products through advertisements to sustain and improve our competitive position in our market. Marketing investments may be costly. In addition, we may, from time to time, change our marketing strategies and spending. We may also change our marketing strategies and spending in response to actions by our consumers, competitors, and other companies that produce and/or distribute beverage products. The sufficiency and effectiveness of our marketing are important to our ability to retain and improve our market share and margins. If our marketing is not successful or if we fail to implement sufficient and effective marketing or adequately respond to changes in industry marketing strategies, our business, financial condition, and results of operations may be adversely affected.

Loss of key personnel or our inability to attract and retain new qualified personnel could hurt our business and inhibit our ability to operate and grow successfully.

We have benefited substantially from the leadership and performance of our senior management, as well as other key employees. Our ability to grow our brand successfully hinges on our ability to retain our current management and key employees, and to attract and retain qualified personnel in the future. We cannot provide any assurance that we will be able to retain our personnel or attract new, qualified personnel. In addition, we do not maintain any “key person” life insurance policies. The loss of the services of members of our senior management or key employees could prevent or delay the implementation and completion of our strategic objectives or divert management’s attention to seeking qualified replacements. If we are unable to attract or retain key personnel, our profitability and growth potential could be harmed.

We may not be able to protect our intellectual property adequately, which could harm the value of our brands and branded products and adversely affect our business.

We depend in large part on our brands and branded products and believe that they are very important to our business, as well as on our proprietary hemp-infused processes. We rely on a combination of trademarks, trade secrets, and similar intellectual property rights to protect our brands and branded products. The success of our business depends on our continued ability to use our existing trademarks in order to increase brand awareness and further develop our branded products in domestic markets. We own three trademarks that are registered with the USPTO and have another trademark registration pending in the United States. We may not be able to protect our trademarks adequately and our use of trademarks may result in liability for trademark infringement, trademark dilution, or unfair competition. We may from time to time be required to institute litigation to enforce our trademarks or other intellectual property rights, or to protect our trade secrets. Such litigation could result in substantial costs and diversion of resources and could negatively affect our sales, profitability, and prospects, regardless of whether we are able to successfully enforce our rights. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations, and financial condition.

We may be subject to product liability claims or regulatory actions if our products are alleged to have caused significant loss or injury.

We may be subject to product liability claims, regulatory action, and litigation if our products are alleged to have caused loss or injury or failed to include adequate instructions for use or failed to include adequate warnings concerning possible side effects or interactions with other substances. Previously unknown adverse reactions resulting from consumption of CBD products alone or in combination with medications or other substances could also occur. In addition, the sale of any ingested product involves a risk of injury due to tampering by unauthorized third parties or product contamination. Our products may also be subject to product recalls, including voluntary recalls or withdrawals, if they are alleged to pose a risk of injury or illness, or if they are alleged to have been mislabeled, misbranded, or adulterated, or otherwise to be in violation of governmental regulations. A product liability claim or regulatory action against us could result in increased costs and could adversely affect our reputation and goodwill with our consumers generally. There can be no assurance that we will be able to obtain and maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or otherwise to protect against potential product liability claims could result in us becoming subject to significant liabilities that are uninsured and also could adversely affect our commercial arrangements with third parties.

Our annual and quarterly financial results are subject to significant fluctuations due to a variety of factors, many of which are beyond our control, which makes our results difficult to predict and could cause our results to fall short of expectations.

Our operating results can vary significantly from quarter-to-quarter and year-to-year depending on various factors, many of which are beyond our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our operating results in future quarters may fall below expectations. Each of the following factors may affect our operating results:

Consequently, our results of operations may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand for our products. We anticipate that fluctuations in operating results will continue in the future; thus, our historical operating results may not be useful to you in predicting our future operating results.

We may require additional capital to finance our operations in the future, but that capital may not be available when it is needed and could be dilutive to existing stockholders.

We may require additional capital for future operations. We plan to finance anticipated ongoing expenses and capital requirements with funds generated from the following sources: (i) cash provided by operating activities; (ii) available cash and cash investments; and (iii) capital raised through debt and equity transactions. Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only on unfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of other factors, many of which are outside of our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to raise additional capital successfully at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our liquidity, financial condition, results of operations, and prospects. Further, if we raise capital by issuing stock, the holdings of our existing stockholders will be diluted.

If we raise capital by issuing debt securities, such debt securities would rank senior to our shares of Common Stock,common stock, $0.00001 par value per share (our “Common Stock”), upon our bankruptcy or liquidation. In addition, we may raise capital by issuing equity securities that may be senior to our Common Stock for the purposes of dividend and liquidating distributions, which may adversely affect the market price of our Common Stock. Finally, upon bankruptcy or liquidation, holders of our debt securities and shares of our preferred stock and our lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our Common Stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our Common Stock, or both.

The success of our new and existing products isIs uncertain.

We have committed, and expect to continue to commit, significant resources and capital to develop and market existing product enhancements and new products. These products are relatively untested, and we cannot assure you that we will achieve market acceptance for these products, or other new products that we may offer in the future. Moreover, these and other new products may be subject to significant competition with offerings by new and existing competitors. In addition, new products and enhancements may pose a variety of technical challenges and require us to attract additional qualified employees. The failure to develop and market these new products or enhancements successfully could seriously harm our business, financial condition, and results of operations.

Our business is dependent upon market acceptance by consumers.

We are substantially dependent on market acceptance of our products by consumers, our ability to change with consumer tastes, and to meet consumer needs with new products. If consumers do not accept our products, our sales and revenue will either fail to materialize or decline, resulting in a reduction in our operating income or possible increases in losses. Demand for CBD and hemp products is also influenced by the popularity of certain aesthetics, cultural and demographic trends, marketing and advertising expenditures, legality concerns, and general economic conditions. Because these factors can change rapidly, consumer demand also can shift quickly. The success of new product introductions depends on various factors, including product selection and quality, sales and marketing efforts, and timely production. We may not always be able to respond quickly and effectively to changes in consumer taste and demand due to the amount of time and financial resources that may be required to bring new products to market. The inability to respond quickly to market changes could have an impact on our expected growth potential and the growth potential of the market for CBD and hemp beverages. Even if this market develops, we may not succeed in our plan to become a category leader. Although we believe that our products in the United States are gaining better consumer acceptance, we cannot predict the future growth rate and size of this market.

If we are able to expand our operations, we may be unable to manage our future growth successfully.

If we are able to expand our operations in the United States, as planned, we may experience periods of rapid growth, which will require additional resources. Any such growth could place substantial strain on our management and our operational, financial, and other resources, and we will need to train, motivate, and manage current employees, as well as attract management, sales, finance and accounting, technical, and other professionals. In addition, we will need to expand the scope of our infrastructure and our physical resources. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with our business objectives and such growth could have a material adverse effect on our business and results of operations.

Any future litigation, or settlements resulting from legal proceedings relating to our business operations, could have a material adverse impact on our results of operations, and financial condition, and liquidity.

From time to time, we may be subject to allegations, and may be party to legal claims and regulatory proceedings, relating to our business operations. Such allegations, claims, and proceedings may be brought by third parties, including our consumers, employees, governmental or regulatory bodies, or competitors. Defending against such claims and proceedings, regardless of their merits or outcomes, is costly and time consuming and may divert management’s attention and personnel resources from our normal business operations, and the outcome of many of these claims and proceedings cannot be predicted. If any of these claims or proceedings were to be determined adversely to us, a judgment, a fine, or a settlement involving a payment of a material sum of money were to occur, or injunctive relief were issued against us, our business, financial condition, and results of operations could be materially adversely affected. Our reputation could also be affected and such adverse litigation results or publicity may also negatively impact our business, financial condition, and results of operations.

Premiums for our insurance coverage may not continue to be commercially justifiable, and our insurance coverage may have limitations and other exclusions and may not be sufficient to cover our potential liabilities.

We have insurance to protect our assets, operations, and employees. While we believe our insurance coverage addresses all material risks to which we are exposed and is adequate and customary in our current state of operations, such insurance is subject to coverage limits and exclusions and may not be available for the risks and hazards to which we are exposed. No assurance can be given that such insurance will be adequate to cover our liabilities or will be generally available in the future or, if available, that premiums will be commercially justifiable. In addition, insurance that is otherwise readily available, such as general liability, and directors’ and officers’ insurance, may become more difficult for us to find, and become more expensive, due to our CBD products. We cannot provide any assurance that we will be able to obtain such insurance in the future, or that the cost will be affordable to us. If we are unable to obtain such insurance, or if we were to incur substantial liability that was not covered by insurance or was in excess of policy limits, we may be prevented from entering into certain business sectors, our growth may be inhibited, and we may be exposed to additional risk and financial liabilities, which could have a material adverse effect on our business, results of operations, and financial condition.

Risks Related to the Regulation of Our Business and Products

We and our co-packers and suppliers are subject to extensive governmental regulation and may be subject to enforcement if we are not in compliance with applicable requirements.

We and our co-packers and suppliers are subject to a broad range of federal, state, and local laws and regulations that govern, among other issues, the testing, development, production, distribution, marketing, and post-market reporting of foods, including those that contain CBD. These include laws administered by the U.S. Food and Drug Administration (“FDA”), the U.S. Federal Trade Commission (“FTC”), the U.S. Department of Agriculture (“USDA”), and other federal, state, and local regulatory authorities. Because we market products that are regulated as food, we, and the companies that co-pack our products, are subject to the requirements of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and regulations promulgated thereunder by the FDA. The statute and regulations govern, among other things, the production, composition, ingredients, packaging, labeling, and safety of beverages. The FDA requires that facilities that produce food products comply with a range of requirements, including hazard analysis and preventative controls regulations, current good manufacturing practices (“cGMPs”), and supplier verification requirements. Production facilities are subject to periodic inspection by federal, state, and local authorities. If we cannot successfully contract with co-packers for our products and if they cannot conform to our specifications and the strict regulatory requirements of the FDA and applicable state and local laws, they may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products, could result in their inability to continue to co-pack for us, or could result in a recall of our products that have already been distributed. If the FDA or other regulatory authority determines that we or they have not complied with the applicable regulatory requirements, our business, financial condition, and results of operations may be materially adversely impacted. If we do not comply with labeling requirements, including making unlawful claims about our products, we could be subject to public warning letters and possible further enforcement actions (which other companies distributing CBD products have faced).

Failure by us, our co-packers, or our suppliers to comply with applicable laws and regulations or to obtain and maintain necessary permits, licenses, and registrations relating to our operations could subject us to administrative and civil penalties, including fines, injunctions, recalls or seizures, warning letters, restrictions on the production or marketing of our products, or refusals to permit the import or export of products, as well as potential criminal sanctions, any or all of which could result in increased operating costs resulting in a material effect on our operating results and business.

The FDA has stated that it interprets the FDCA to prohibit the sale of food products that contain CBD. The FDA is currently evaluating a potential regulatory pathway for CBD products pursuant to its current authority; but, unless and until such changes are promulgated, the FDA and other federal and state regulatory authorities could take enforcement action to prevent us from marketing beverages with CBD, which could adversely impact our business, financial condition, and results of operations or cause us to halt product sales altogether.

Although hemp and CBD are no longer controlled substances subject to regulation by the U.S. Drug Enforcement Agency (the “DEA”), the FDA has stated publicly that it is nonetheless unlawful under the FDCA to introduce food containing CBD into interstate commerce. The FDCA prohibits the introduction or delivery for introduction into interstate commerce of any food that contains an approved drug or a drug for which substantial clinical investigations have been instituted and made public, unless a statutory exemption applies. The FDA has publicly stated its conclusion that none of the statutory exceptions has been met for CBD.

On May 31, 2019, the FDA held a public hearing to obtain scientific data and information about the safety, production, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds (such as CBD) to provide the FDA with information as it considers policy options related to the regulation of these products, particularly in light of the changes to the legal status of hemp enacted in the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The FDA has also formed an internal working group to evaluate the potential pathways to market for CBD products, which could include seeking statutory changes from Congress or promulgating new regulations. If legislative action is necessary, such legislative changes could take years to finalize and may not include provisions that would enable us to produce, market, and/or sell our CBD products, and the FDA could similarly take years to promulgate new regulations. Additionally, while the FDA’s enforcement focus to date has primarily been on CBD products that are associated with therapeutic claims, the agency has recently issued warning letters to companies that market CBD products without such claims. There is an unquantifiable risk that the FDA could take enforcement action against us, our co-packers, or our suppliers, or those marketing similar products to us, which could limit or prevent us from marketing our products and have a material adverse impact on our business, financial condition, and results of operations. While the FDA announced on March 5, 2020 that it is currently evaluating a risk-based enforcement policy for CBD to provide more clarity to the industry and the public while the agency takes potential steps to establish a clear regulatory pathway, it remains unclear whether or when the FDA will ultimately issue such an enforcement policy.

Moreover, local, state, federal, and international CBD, hemp, and cannabis laws and regulations are rapidly changing and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance requirements or alteration of certain aspects of our business plan in the event that our CBD products become subject to new restrictions. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. It is also possible that regulations may be enacted in the future that will be directly applicable to our products. We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our activities in the hemp and CBD industry. The constant evolution of laws and regulations may require us to incur substantial costs associated with legal and compliance fees and ultimately require us to alter our business plan.

Our products contain CBD derived from hemp. The 2018 Farm Bill enacted a number of changes to the legal status of hemp and hemp products, including removal from the statutory list of controlled substances. However, implementation of the 2018 Farm Bill is ongoing, and there is still significant uncertainty regarding the legal status of hemp and hemp-based products under U.S. law.

Our products that contain CBD are subject to various state and federal laws regarding the production and sale of hemp-based products. Historically, the DEA had interpreted CBD to be subject to the Controlled Substances Act (the “CSA”) under the definition for “marijuana,” a Schedule I controlled substance. However, the 2018 Farm Bill removed “hemp,” from the definition of “marijuana.” “Hemp” is defined as the plant, Cannabis sativa L., and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (“THC”) concentration of not more than 0.3% on a dry weight basis. As a result of the enactment of the 2018 Farm Bill, and since we believe that the CBD contained in our products and the hemp from which it is derived meet the definition of “hemp,” we believe that our CBD products and the hemp from which they are derived are not Schedule I controlled substances under the CSA. However, there is a risk that we could be subject to enforcement action, including prosecution, if any of our products are determined not to meet the definition of “hemp” and to constitute “marijuana” under the CSA based on THC levels or other violations, which would have a negative impact on our business and operations.

In addition, the 2018 Farm Bill contained provisions that require the USDA, among other things, to promulgate a new regulatory framework that will govern the growth and cultivation of hemp, where hemp grown in compliance with the framework would be permitted in interstate commerce throughout the United States. On October 31, 2019, the USDA issued an interim final rule (“IFR”) establishing the regulations necessary for domestic hemp production, including provisions for the USDA to approve plans submitted by states and Native American tribes for the monitoring and regulation of hemp production at the state level. Effective March 22, 2021, The USDA issued the final rule, which creates the U.S. Domestic Hemp Production Program. The program provides requirements for maintaining records about the land where hemp is produced, testing the levels of total delta-9 tetrahydrocannabinol, disposing of non-compliant plants, licensing hemp producers, and ensuring compliance under the new program. The Agricultural Marketing Service (AMS), has been delegated authority to administer the U.S. Domestic Hemp Production Program. While the 2018 Farm Bill requires state and tribal plans to meet certain basic requirements as outlined in the IFR, nothing preempts or limits state or tribal laws that are more stringent than the 2018 Farm Bill, and the requirements for lawful hemp production will vary from state to state. We and our co-packers and suppliers must expend resources to monitor the evolving federal and state legal landscape for hemp production, and any violations of these laws, or alleged violations, could disrupt our business and result in a material adverse effect on our operations.

Within the United States, we and our co-packers and suppliers face a variety of state and local restrictions on the cultivation of hemp, and if state or local regulatory authorities take enforcement action to prevent us from selling our products, our business, financial condition, and results of operations could be materially adversely impacted.

The growth and cultivation of hemp is subject to a complex regulatory framework that is implemented and affected by multiple federal agencies, as well as state and local authorities. In 2014, four years prior to enacting the 2018 Farm Bill, Congress enacted the Agricultural Act of 2014 (the “2014 Farm Bill”) to allow for the limited growth and cultivation of industrial hemp under federal law. This statute allowed institutions of higher education and state departments of agriculture to grow and cultivate industrial hemp for agricultural or other academic research purposes, or for hemp to be grown under the auspices of a state agricultural pilot program, in states where such growth and cultivation is legal under state law. While the 2014 Farm Bill will be repealed after October 31, 2020, and although the 2018 Farm Bill created a pathway under which hemp and its derivatives, including CBD, would no longer be a Schedule I controlled substance under the CSA and would be protected from interference in interstate commerce, the USDA only recently issued the IFR that contains the regulatory framework that will govern the growth and cultivation of hemp, and, currently, several states continue to operate under the 2014 Farm Bill. Alongside the current federal regulatory developments, state and local authorities have enacted their own restrictions on the cultivation or sale of hemp or hemp-derived CBD, including laws that ban the cultivation or possession of hemp or any other plant of the cannabis genus and derivatives thereof, such as CBD. Currently several states ban the cultivation and possession of hemp or CBD, while others have taken enforcement action against human food products that contain CBD, and states may enact new laws or regulations that prohibit or limit the sale of such products at any time. In the event of a change in federal or state laws and regulations that are adverse to our CBD products, we may be restricted or limited with respect to sale or distribution of those products, which could adversely impact our intended business plan with respect to such products.

The USDA has only recently issued the IFR and started accepting state and tribal hemp production plans for review, and it remains to be seen which states will submit their own regulatory plans for the cultivation of hemp and which will become subject to the USDA framework. The timing and content of state regulatory plans may impact our ability to obtain sufficient quantities of CBD at an acceptable price and on a timely basis. If our current co-packers and suppliers were to face increased regulation or be unable to continue to supply our business, we may be unable to fulfill orders for our products or find a suitable replacement co-packers and suppliers in a timely fashion or with comparable pricing. If our current co-packers or suppliers or any future co-packers or suppliers fail to comply with the applicable regulatory requirements, our business may suffer.

Changes in existing laws or regulations, including how such existing laws or regulations are enforced by federal, state, and local authorities, or the adoption of new laws or regulations may increase our costs and otherwise adversely affect our business, financial condition, and results of operations.

In addition to the legal framework applicable to hemp and CBD, the production and marketing of food products is highly regulated, and we and our co-packers and suppliers are subject to a variety of federal and state laws and regulations applicable to food. These laws and regulations apply to many aspects of our business, including the co-packing, packaging, labeling, distribution, advertising, sale, quality, and safety of our products. We could incur costs, including fines, penalties, and third-party claims, in the event of any violations of, or liabilities under, such requirements, including any competitor or consumer challenges relating to compliance with such requirements. For example, in connection with the marketing and advertising of our products, we could be the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and state consumer protection statutes.

The regulatory environment in which we operate could change significantly and adversely in the future. The laws and regulations that apply to our products and business may change in the future and we may incur (directly or indirectly through our co-packers or suppliers) material costs to comply with current or future laws and regulations or any required product recalls. Any change in production, labeling, or marketing requirements for our products may lead to an increase in costs or interruptions in our production or raw material supply, either or both of which could adversely affect our operations and financial condition. For example, recent federal and state attention to the sale of CBD-containing products, and specifically food products that contain CBD, could result in standards or requirements that mandate changes to our current product ingredients, labeling, or marketing. New or revised government laws and regulations could significantly limit our ability to operate our business as it is currently being conducted, result in additional compliance costs, and, in the event of noncompliance, could lead to administrative or civil remedies, including fines, injunctions, withdrawals, recalls, or seizures and confiscations, as well as potential criminal sanctions.

Any such changes or actions by the FDA or other regulatory agencies could have a material adverse effect on our co-packers, our suppliers, and our business, financial condition, and results of operations.

Government scrutiny, warnings, and public perception could increase our costs of production and increase our legal and regulatory expenses, and if we are unable to comply with the applicable requirements for marketing beverages, we could face substantial civil and criminal penalties.

Producing, processing, labeling, packaging, storing, and distributing food products are activities that are subject to extensive federal, state, and local regulation. In the United States, these operations are regulated by the FDA and various state and local public health and agricultural agencies. The FDA Food Safety Modernization Act of 2011 provides direct recall authority to the FDA for food products and includes a number of other provisions that are designed to enhance food safety, including increased inspections by the FDA of domestic food facilities. Compliance with government regulation can be costly or may otherwise adversely affect our business. Moreover, failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls, or seizures, as well as potential criminal sanctions, which could in turn have a material adverse effect on our business, financial condition, and results of operations.

We operate in a highly regulated environment with constantly evolving legal and regulatory frameworks. Consequently, we are subject to heightened risk of legal claims, government investigations, or regulatory enforcement actions. Although we have implemented policies and procedures designed to ensure compliance with existing laws and regulations, there can be no assurance that our employees, temporary workers, contractors, or agents might not violate our policies and procedures. Moreover, a failure to maintain effective regulatory compliance policies and procedures could lead to violations, unintentional or otherwise, of laws and regulations. Legal claims, government investigations, or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations could subject us to civil and criminal penalties that could materially and adversely affect our product sales, reputation, financial condition, and operating results. In addition, the costs and other effects of defending potential and pending litigation and administrative actions against us may be difficult to determine and could materially adversely affect our business, financial condition, and results of operations.

Because there has been limited study on the effects of CBD, future nonclinical and clinical research studies and analysis of such studies by third parties, including government agencies, may lead to conclusions that dispute or conflict with our understandings and beliefs regarding the benefits, viability, safety, dosing, and social acceptance of CBD.

Research in the United States and internationally regarding the benefits, viability, safety, and dosing of isolated cannabinoids (such as CBD or THC) remains in relatively early stages. There have been few clinical trials on the benefits of CBD conducted on humans or animals, including studies focused on the consumption of CBD in foods.

Future research and clinical trials may draw opposing conclusions to statements contained in current articles, reports, and studies regarding CBD or could reach different or negative conclusions regarding the medical benefits, viability, safety, dosing, or other facts and perceptions related to CBD, which could adversely affect acceptance of CBD in foods and the demand for such products. Future research may also cause regulatory authorities to change how they enforce regulatory restrictions applicable to hemp and CBD. We cannot predict any negative research and clinical trial findings in the future that may have a material adverse impact on our business, financial condition, and results of operation.

Negative publicity from being in the hemp and CBD space could have a material adverse effect on our business, financial condition, and results of operations.

Hemp and marijuana are both varieties of the plant, Cannabis sativa L., except that hemp, as defined by federal law for exemption from Schedule I of the CSA, has a delta-9 THC concentration of not more than 0.3% on a dry weight basis. The same plant with a higher THC content is considered to be marijuana, which is legal for medical and recreational use under certain state laws, but which is not legal under federal law. The similarities between these plants can cause confusion, and our activities with hemp may be incorrectly perceived that we are involved in federally illegal marijuana activities.

Further, despite growing support for the cannabis industry and the legalization of marijuana in certain U.S. states, many individuals and businesses remain opposed to the cultivation and sale of cannabis and cannabis-derived products. Any negative publicity resulting from an incorrect perception that we operate in the marijuana space could result in a loss of current or future business. It could also adversely affect the public’s perception of us or our Common Stock and could lead to reluctance by new parties to do business with or to invest in us. We cannot assure you that additional business partners, including, but not limited to, financial institutions and distributors and resellers, will not attempt to end or curtail their relationships with us. Any such negative press or impacts to our business relationships could have a material adverse effect on our business, financial condition, and results of operations.

Our ability to deduct certain business expenses for income tax purposes is subject to uncertainty.

Section 280E of the Internal Revenue Code of 1986, as amended (the “Code”), prohibits the deduction of certain otherwise ordinary business expenses from carrying on any trade or business that consists of “trafficking” Schedule I or II controlled substances, as defined by the CSA. Under existing Internal Revenue Service guidance, the bulk of operating costs and general administrative costs of trades or businesses that are subject to Section 280E of the Code are not permitted to be deducted. Although the 2018 Farm Bill created a pathway under which hemp and its derivatives, including CBD, would no longer be a Schedule I controlled substance under the CSA, until the USDA implements regulations pursuant to the 2018 Farm Bill, we believe our ability to deduct certain ordinary business expenses requires compliance with the 2014 Farm Bill. We do not believe that Section 280E of the Code currently forbids our deduction of otherwise ordinary business expenses because we believe that we are in compliance with the 2014 Farm Bill and/or the products we sell are from co-packers and suppliers that are compliant with the 2014 Farm Bill. However, until the USDA promulgates regulations under the 2018 Farm Bill, governmentally determined non-compliance with the 2014 Farm Bill by us, our co-packers, or their suppliers may have a material adverse tax effect on us.

Risks Related to an Investment in Our Common Stock

There is currently a limited public market for our Common Stock; a trading market for our Common Stock may never develop; and our Common Stock prices may be volatile and could decline substantially.

Although from April 15, 2020 to March 14, 2022, our Common Stock iswas quoted on the Pink,OTCQB^® Venture Market, an over-the-counter quotation system maintained by the OTCM,OTC Markets Group Inc. (the “OTCM”), under the symbol “KGKG,” and, is currently quoted on the Pink^® Open Market (the “Pink Market”), there is a limitedhas been no material public market for our Common Stock. In the over-the-counter market, our stockholders may find it more difficult to obtain accurate quotations as to the market value of their shares of our Common Stock and may find fewer buyers to purchase their stock and fewer market makers to support its price than if our Common Stock were listed on a national securities exchange, such as the New York Stock Exchange, the NYSE American, or the Nasdaq Stock Market. As a result of these and other factors, investors may be unable to resell shares of our Common Stock at or above the price at which they purchased them, at or near quoted bid prices, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future, and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our Common Stock as currency.

We intend to list shares of our Common Stock on a national securities exchange in the Nasdaq Stock Market;future; but, we do not now, and may not in the future, meet itsthe initial listing standards i.e., bid or closing priceof any national securities exchange, which often provides a more widely-traded and stockholders’ equity. We expect,liquid market. Some, but can give no assurance, that, as a resultnot all, of the Specific Reverse Split, we will meetfactors that may delay or prevent the bid or closing price standard. Further, we expect, but can give no assurance that, aslisting of shares of our Common Stock on a result of this offering, we will meetnational securities exchange include the following: our stockholders’ equity standard. We believe thatmay be insufficient; the market value of our outstanding Common Stock may be too low; our net income from operations may be too low or not sustained for the requisite period of time; our Common Stock may not be sufficiently widely held; we currently meet the other initial listing standards, but can give no assurance thatmay not be able to secure market makers for our Common Stock; and we will continuemay fail to meet each of them.other rules and requirements mandated by the several exchanges and markets to have our Common Stock listed. Should we fail to satisfy the initial listing standards of the Nasdaq Stock Market,national securities exchanges, or if our Common Stock is otherwise rejected for listing, and remains quoted on the Pink Market or again is quoted on the OTCQB^® Venture Market, the quoted price of our Common Stock could suffer and the trading market for our Common Stock may become less liquid and our Common Stock price may be subject to increased volatility.

Therefore, an active, liquid, and orderly trading market for our Common Stock may not initially develop or be sustained, which could significantly depress the public price of our Common Stock and/or result in significant volatility, which could affect your ability to sell your shares of our Common Stock. Even if an active trading market were to develop for our Common Stock, were to be sustained, the market price of our Common Stock may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates, and market conditions in general could have a significant impact on the future market price of our Common Stock.

We are not subject to the rules of Nasdaq or any othera national securities exchange requiring the adoption of certain corporate governance measures and, as a result, our stockholders do not have the same protections.

Because our Common Stock was quoted on the OTCQB^® Venture Market from April 15, 2020 to March 14, 2022, and currently, is quoted on the Pink Market, we are not subject to the rules of a national securities exchange, such as the New York Stock Exchange, the NYSE-American, or the Nasdaq Stock Market. National securities exchanges generally require more rigorous measures relating to corporate governance that are designed to enhance the integrity of corporate management. The requirements of the OTCQB^® Venture Market and the Pink Market afford our stockholders fewer corporate governance protections than those of a national securities exchange. Until we comply with such greater corporate governance measures, even though such compliance is not required by the OTCM for quotations of shares of our Common Stock on the OTCQB^® Venture Market or the Pink Market, our stockholders will have fewer protections, such as those related to director independence, stockholder approval rights, and governance measures that are designed to provide oversight of a corporation’s management by its board of directors.

Our Common Stock is currently subject to the “penny stock” rules; accordingly, it could adversely affect the market price of our Common Stock and increase your transaction costs to sell those shares.

The SEC has adopted Rule 3a51-1, which defines a “penny stock” 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. Because the price of our Common Stock is less than $5.00 (and we do not meet any of the alternative exemptive criteria), our Common Stock is deemed to be a penny stock. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires that a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. 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.

Our stock price has been extremely volatile, which could cause the value of an investment in our Common Stock to decline.

The market price of our Common Stock has been extremely volatile and could be subject to significant fluctuations due to changes in sentiment in the market regarding our operations or business prospects, among other factors. The public price of our Common Stock following the date of this prospectusProspectus also could be subject to wide fluctuations in response to the risk factors described in this prospectusProspectus and others beyond our control, including:

In addition, the stock market in general has experienced extreme price and volume fluctuations that often have been unrelated or disproportionate to the operating performance of those companies. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results, and financial condition.

Because we are a “smaller reporting company,” we will not be required to comply with certain disclosure requirements that are applicable to other public companies and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors.

We are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. As a smaller reporting company, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to:

We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million plus we have any public common equity float or public float of more than $700 million. We also would not be eligible for status as smaller reporting company if we become an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company.

Sales by our stockholders of a substantial number of shares of our Common Stock in the public market could adversely affect the market price of our Common Stock.

A substantial portion of the total outstanding shares of our Common Stock may be sold into the market at any time. Some of these shares are owned by our executive officers and directors, and we believe that such holders have no current intention to sell a significant number of shares of our stock. If all of the major stockholders were to decide to sell large amounts of stock over a short period of time, such sales could cause the market price of our Common Stock to drop significantly, even if our business were doing well.

Requirements associated with being a reporting public company will require significant company resources and management attention.

From and after December 31, 2020, we became subject to the reporting requirements of the Exchange Act and the other rules and regulations of the SEC relating to public companies. We are working with independent legal, accounting, and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as an SEC reporting company. These areas include corporate governance, internal control, internal audit, disclosure controls, and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal control over financial reporting. However, we cannot provide assurances that these and other measures we may take will be sufficient to allow us to satisfy our obligations as an SEC reporting company on a timely basis. Further, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

In addition, compliance with reporting and other requirements applicable to SEC reporting companies will create additional costs for us, will require the time and attention of management, and will require the hiring of additional personnel and legal, audit, and other professionals. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs, or the impact that our management’s attention to these matters will have on our business and operations.

Our management constitutes some of our largest stockholders, which will allow them to exert significant control over our business and affairs and have actual or potential interests that may depart from those of investors.

As of October [●], 2022,March 31, 2023, members of our management team beneficially owned approximately [●]%25.03% of our Common Stock. As a result, management has the virtual unfettered ability to control substantially all matters submitted to our stockholders for approval including (i) election of our Board; (ii) removal of any of our directors; (iii) amendment of our Amended and Restated Certificate of Incorporation (our “A&R Certificate of Incorporation”) or our Amended and Restated Bylaws (our “A&R Bylaws”); and (iii) adoption of measures that could delay or prevent a change in control or impede a merger, takeover, or other business combination involving us.

In addition, management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Any investors will own a minority percentage of our Common Stock and will have minority voting rights.

Our preferred stock may have rights senior to those of our Common Stock, which could adversely affect holders of our Common Stock.

Our A&R Certificate of Incorporation gives our Board the authority to issue one or more additional series of our preferred stock without a vote or any action by our stockholders. Our Board also has the authority to determine the terms of those various series of our preferred stock, including price, preferences, and voting rights. The rights granted to holders of shares of our preferred stock in the future may adversely affect the rights of holders of shares of our Common Stock. Any such authorized series of preferred stock may have a liquidation preference – a pre-set distribution in the event of a liquidation of our Company – that would reduce the amount available for distribution to the holders of shares of our Common Stock or may have dividend rights superior to those provided to the holders of shares of our Common Stock, which could reduce the amount of available for distribution as dividends to holders of shares of our Common Stock. In addition, an authorized series of our preferred stock may have voting rights that are superior to the voting right of the holders of shares of our Common Stock.

We do not expect to pay any cash dividends in the foreseeable future.

We intend to retain our future earnings, if any, in order to reinvest in the development and growth of our business and, therefore, do not intend to pay dividends on our Common Stock for the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, and such other factors as our Board deems relevant. Accordingly, investors may need to sell their shares of our Common Stock to realize a return on their investment, and they may not be able to sell such shares at or above the price paid for them.

We can sell additional shares of our Common Stock without approval of our stockholders and without offering shares to existing stockholders, which would result in dilution of existing stockholders’ interests in us and could depress our stock price.

Our A&R Certificate of Incorporation authorizes 2,500,000,00010,500,000,000 shares of our Common Stock, of which 1,781,156,8662,226,940,557 are issued and outstanding as of the date of this prospectus;March 31, 2023; 1,200,000 shares of our Series B Preferred Stock, of which 488,000 shares are issued and outstanding as of the date of this prospectus; 250March 31, 2023; 2,000 shares of our Series C Preferred Stock, of which no1,000 shares are issued and outstanding as of the date of this prospectus;March 31, 2023; and 500,000 shares of our Series D Preferred Stock, of which 500,000 shares are issued and outstanding as of the date of this prospectus,March 31, 2023, for an aggregate of 988,000989,000 issued and outstanding shares of our preferred stock as of the date of this prospectus,March 31, 2023, which shares of issued and outstanding shares of our preferred stock are convertible into an aggregate of 500,488,000 shares of our Common Stock. Although our Board intends to utilize its reasonable business judgment to fulfill its fiduciary obligations to our then-existing stockholders in connection with any future issuance of our capital stock, the future issuance of additional shares of our Common Stock or preferred stock convertible into shares of our Common Stock would cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a material effect on the market value of the shares. In addition, the exercise price of any convertible debt securities or the conversion price of any convertible equity securities we may sell and issue in the future could be significantly lower than the market price of our Common Stock on the respective issuance, exercise, or conversion date. Alternatively, we could issue equity securities at a significant discount to the market price of our Common Stock on the issuance date, the occurrence of any of such events could have a material adverse effect on the market price of our Common Stock.

Further, shares of our Common Stock do not have preemptive rights, which means that we can sell shares of our Common Stock to other persons without offering the holders of shares of our Common Stock, or the purchasers in this offering, the right to purchase their proportionate share of such offered shares. Therefore, any additional sales of our capital stock by us could dilute an existing stockholder’s ownership interest in us.

We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our Common Stock less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act, enacted in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the SOX Act, reduced disclosure obligations regarding executive compensation in this annual reportProspectus and our periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years following the year in which we complete this offering, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which requires the market value of our Common Stock that is held by non-affiliates to exceed $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected to “opt out” of this exemption and, therefore, we will adopt new or revised accounting standards at the time public companies adopt the new or revised accounting standards and, therefore, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standards.

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to continue to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the SOX, and reduced disclosure obligations regarding executive compensation in this annual reportProspectus and our periodic reports and proxy statements, to the extent we are required to make such filings. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

Provisions in our A&R Certificate of Incorporation and A&R Bylaws and Delaware law may discourage a takeover attempt even if a takeover might be beneficial to our stockholders.

Provisions contained in our A&R Certificate of Incorporation and A&R Bylaws could make it more difficult for a third party to acquire us. Provisions in our A&R Certificate of Incorporation and A&R Bylaws impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our A&R Certificate of Incorporation authorizes our Board to determine the rights, preferences, privileges, and restrictions of unissued series of our preferred stock without any vote or action by our stockholders. Thus, our Board can authorize and issue shares of our preferred stock with voting or conversion rights that could dilute the voting power of holders of other series of our capital stock. These rights may have the effect of delaying or deterring a change of control of us. Additionally, our A&R Certificate of Incorporation and/or A&R Bylaws establish limitations on the removal of directors and on the ability of our stockholders to call special meetings and include advance notice requirements for nominations for election to our Board and for proposing matters that can be acted upon at stockholder meetings.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), which prohibits an “interested stockholder” owning in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which such stockholder acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

See “Description of Securities – Anti-Takeover Effects of Provisions of Our A&R Certificate of Incorporation, Our A&R Bylaws and Delaware Law.” These provisions could limit the price that certain investors might be willing to pay in the future for shares of our Common Stock.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our A&R Certificate of Incorporation provides that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. In addition, as permitted by Section 145 of the DGCL, our A&R Certificate of Incorporation provides that:

We previously effected a dividend distribution of Common Stockcommon stock of Elev8 Hemp, as our wholly-owned subsidiary, and Branded Legacy, Inc., formerly known as Elev8 Brands, Inc. and, prior to that, known as PLAD, Inc. (“Branded Legacy”), which may have violated Section 5 of the Securities Act.

The shares of common stock of Branded Legacy that we distributed to our stockholders were not registered under the Securities Act, and we may not have fully complied with SEC Legal Bulletin No. 4, which requires a company to satisfy five conditions in connection with the spin-off. As a result, we may have violated Section 5 of the Securities Act in that we did not file a registration statement with the SEC and have the same declared effective by the SEC prior to distributing the shares of Branded Legacy common stock. In addition, it is possible that the SEC could commence an enforcement action against us. For additional information regarding the dividend distribution, see “Management’s Discussion and Analysis and Results of Operations – Liquidity and Capital Resources” for additional information.

Risks Related to Our Securities and this Offering

Our share price is likely to be volatile and the market price of our shares of Common Stock after this offering may drop below the price you pay.

You should consider an investment in our securities as risky and invest only if you can withstand a significant loss and wide fluctuations in the market value of your investment. You may be unable to sell your securities at or above the initial public offering price due to fluctuations in the market price of our shares of Common Stock arising from changes in our operating performance or prospects..prospects. Some of the factors that may cause the market price of our shares of Common Stock to fluctuate or decrease below the price paid in this offering include:

In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit and divert the time and attention of our management, which could seriously harm our business.

Substantial future sales of our shares of Common Stock, or the perception that these sales could occur, may cause the price of our shares of Common Stock to drop significantly, even if our business is performing well.

A large volume of sales of our shares of Common Stock could decrease the prevailing market price of our shares of Common Stock and could impair our ability to raise additional capital through the sale of equity securities in the future. Even if a substantial number of sales of our shares of Common Stock does not occur, the mere perception of the possibility of these sales could depress the market price of our shares of Common Stock and have a negative effect on our ability to raise capital in the future.

While the shares of our Common Stock are currently quoted on the Pink, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the related rules and regulations implemented by the SEC, or Nasdaq, will increase legal and financial compliance costs and will make some compliance activities more time consuming. We are currently evaluating these rules, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from our other business activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. In connection with this offering, we will increase our directors’ and officers’ insurance coverage which will increase our insurance cost. In the future, it may be more expensive or more difficult for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

Under the corporate governance standards of Nasdaq, a majority of our Board and each member of our audit committee must be an independent director no later than the first anniversary of the completion of this offering. We may encounter difficulty in attracting qualified persons to serve on our Board and the audit committee, and our Board and management may be required to divert significant time and attention and resources away from our business to identify qualified directors. If we fail to attract and retain the required number of independent directors, we may be subject to the delisting of our shares of Common Stock from Nasdaq.

We are an “emerging growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our shares of Common Stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an “emerging growth company,” we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company” for up to five years following the completion of this offering, although, if we have more than $1.07 billion in annual revenue, if the market value of our shares of Common Stock held by non-affiliates exceeds $700 million as of June 30 of any year, or we issue more than $1.0 billion of non-convertible debt over a three-year period before the end of that five-year period, we would cease to be an “emerging growth company” as of the following December 31. Investors could find our shares of Common Stock less attractive if we choose to rely on these exemptions. If some investors find our shares of Common Stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our shares of Common Stock and our share price may be more volatile. We have elected not to take advantage of the extended transition period allowed for emerging growth companies for complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our shares of Common Stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our shares of Common Stock.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. We could be an “emerging growth company” for up to five years following this offering. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We have elected not to take advantage of the extended transition period allowed for emerging growth companies for complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act.

There is no public market for the Pre-funded Warrants or the Common Stock Purchase Warrants being offered by us in this offering.

There is no current public trading market for the Pre-funded Warrants or the Common Stock Purchase Warrants and we do not expect a market to develop. In addition, we do not intend to apply to list the Pre-funded Warrants [or the Common Stock Purchase Warrants] on the Nasdaq Stock Market or other nationally recognized trading system, including the QTCQB. Without an active market, the liquidity of the Pre-funded Warrants and [the Common Stock Purchase Warrants] will be limited, which may adversely affect their value.

Holders of Pre-funded Warrants or Common Stock Purchase Warrants purchased in this offering will have no rights as common stockholders until such holders exercise their Pre-funded Warrants or Common Stock Purchase Warrants and acquire our shares of Common Stock.

Until holders of Pre-funded Warrants or Common Stock Purchase Warrants acquire our shares of Common Stock upon exercise thereof, such holders will have no rights with respect to our shares of Common Stock underlying the Pre-funded Warrants and Common Stock Purchase Warrants. Upon exercise of the Pre-funded Warrants or Common Stock Purchase Warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.

The Pre-funded Warrants and the Common Stock Purchase Warrants are speculative in nature.

The Pre-funded Warrants and the Common Stock Purchase Warrants do not confer any rights of share of Common Stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of Common Stock at a fixed price for a limited period of time. Following this offering, the market value of the Pre-funded Warrants and the Common Stock Purchase Warrants, if any, is uncertain and there can be no assurance that the market value of the Pre-funded Warrants and the Common Stock Purchase Warrants will equal or exceed their imputed offering price. The Pre-funded Warrants [and the Common Stock Purchase Warrants] will not be listed or quoted for trading on any market or exchange. There can be no assurance that the market price of the shares of Common Stock will ever equal or exceed the exercise price of the Pre-funded Warrants or the Common Stock Purchase Warrants, respectively, and consequently, it may not ever be profitable for holders of the Pre-funded Warrants and the Common Stock Purchase Warrants to exercise them.

Our management team will have broad discretion to use the net proceeds from this offering and its investment of these proceeds may not yield a favorable return. They may invest the proceeds of this offering in ways with which investors disagree.

Our management team will have broad discretion in the application of the net proceeds from this offering and could spend or invest the proceeds in ways with which our stockholders disagree. Accordingly, investors will need to rely on our management team’s judgment with respect to the use of these proceeds. We intend to use the proceeds from this offering in the manner described under “Use of Proceeds.” The failure by management to apply these funds effectively could negatively affect our ability to operate and grow our business.

We cannot specify with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering. In addition, the amount, allocation and timing of our actual expenditures will depend upon numerous factors, including milestone payments received from our strategic partnerships and royalties received on sale of our approved product and any future approved product.

Accordingly, we will have broad discretion in using these proceeds. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

Investors in this offering will pay a much higher price than the book value of our shares of Common Stock and therefore you will incur immediate and substantial dilution of your investment.

The initial public offering price will be substantially higher than the net tangible book value per share of Common Stock based on the total value of our tangible assets less our total liabilities immediately following this offering. Therefore, if you purchase securities in this offering, you will experience immediate and substantial dilution of approximately $[●] per share, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to this offering at an assumed initial public offering price of $[●] per security. As at [●], 2022, and giving effect to the Specific Reverse Split, we have issued [●] outstanding stock options and [●] outstanding Warrants to acquire shares of Common Stock. To the extent these outstanding options and Warrants are ultimately exercised, you will experience further dilution. See “Dilution.”

An active trading market for our shares of Common Stock may never develop or be sustained.

We have applied to list our shares of Common Stock on Nasdaq. However, there has been a limited public trading market on the QTCQB. We cannot assure you that an active trading market for our shares of Common Stock will develop on Nasdaq or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our shares of Common Stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of our shares of Common Stock when desired, or the prices that you may obtain for your shares of Common Stock.

We cannot assure you that the market price of our shares of Common Stock will remain high enough to have the intended effect of complying with Nasdaq’s minimum price requirement.

In connection with this offering and the intended uplisting of our shares of Common Stock to Nasdaq, we have effected the Specific Reverse Split at a ratio that currently achieves the requisite increase in the market price of our shares of Common Stock to allow us to obtain Nasdaq approval of our initial listing application. However, there can be no assurance that the market price of our shares of Common Stock following the Specific Reverse Split will remain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company’s shares of Common Stock to decline in the period following a Reverse Split. If the market price of our shares of Common Stock declines following the effectuation of the Specific Reverse Split, the percentage decline may be greater than would occur in the absence of a Reverse Split. In any event, other factors unrelated to the number of shares of Common Stock outstanding, such as negative financial or operational results, could adversely affect the market price of our shares of Common Stock and thus jeopardize our ability to meet or maintain the Nasdaq’s minimum price requirement. If we are unable to satisfy these requirements or standards, we would not be able to meet the initial listing application standards, which could cause us to terminate the offering. We can provide no assurance that any such action taken by us would allow our shares of Common Stock to be listed, stabilize the market price, or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

We might be unable to list our shares of Common Stock on Nasdaq, or if shares of our Common Stock are again quoted on the OTCQB, the OTCM may delist our Common Stock, which could limit investors’ ability to make transactions in our Common Stock and subject us to additional trading restrictions.

We have applied to apply to list our shares of Common Stock on Nasdaq. In order to make a final determination of compliance with its listing criteria, Nasdaq may look to the first trading day’s activity and, particularly, the last bid price on such day. In the event the trading price for our shares of Common Stock drops below Nasdaq’s minimum bid or closing price requirements, Nasdaq could rescind our initial listing approval. If we fail to list the shares of Common Stock on Nasdaq, the liquidity for our shares of Common Stock would be significantly impaired, which may substantially decrease the trading price of our shares of Common Stock.

In addition, in the future, our Common Stock may fail to meet the continued listing requirements to be listed on Nasdaq. If Nasdaq delists our shares of Common Stock from trading on its exchange, we could face significant material adverse consequences, including:

Sales of a substantial number of our shares of Common Stock by our existing stockholders in the public market could cause our share price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our shares of Common Stock in the public market after the lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our shares of Common Stock could decline. Based on the number of shares of Common Stock outstanding as of , 2022, upon the closing of this offering, we will have outstanding a total of shares of Common Stock, assuming none of the Warrants issued in this offering are exercised and no sale of any Pre-funded Warrants. Of these shares, only the shares of Common Stock sold in this offering by us, plus any shares sold upon exercise of the underwriters’ option to purchase additional shares, will be freely tradable without restriction in the public market immediately following this offering, unless purchased by our affiliates. In connection with this offering, our officers, directors and significant stockholders have agreed to be subject to a contractual lock-up with the underwriters, which will expire 90 days after the date of this prospectus. The representatives, however, may, in their sole discretion, permit our officers, directors and other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

Shares of Common Stock that are either subject to outstanding options or are reserved for future issuance under our Equity Incentive Plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, any relevant lock-up agreements, and Rule 144 under the Securities Act of 1933, as amended, (the “Securities Act”). Additionally, shares of Common Stock that are issuable upon the exercise of outstanding Warrants to purchase shares of our Common Stock, and warrants to purchase shares of our Common Stock that may be granted in connection with the closing of this offering, will become eligible for sale in the public market to the extent permitted by the lock-up agreements and Rule 144 under the Securities Act, if the resale of which shares of Common Stock is not otherwise registered under the Securities Act. If these additional shares of Common Stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our shares of Common Stock could decline.

We do not expect to pay dividends in the future. As a result, any return on investment may be limited to the value of our Common Stock.

We do not anticipate paying cash dividends on our Common Stock in the foreseeable future. The payment of dividends on our Common Stock will depend on our earnings, financial condition and other business and economic factors as our Board may consider relevant. If we do not pay dividends, our shares of Common Stock may be less valuable because a return on an investment in our shares of Common Stock will only occur if our stock price appreciates.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Prospectus, including statements regarding our future financial position, business strategy and plans, objectives of management for future operations, and statements related to the expected effects on our business on our business from the COVID-19 pandemic, and other similar matters, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions described in “Risk Factors” and elsewhere in this Prospectus.

Other sections of this Prospectus may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

We undertake no obligation to update publicly or revise any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events or performance. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or will occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We have an ongoing obligation to continually disclose material future changes in our Company and its operations.

MARKET, INDUSTRY AND OTHER DATA

Unless otherwise indicated, information contained in this prospectusProspectus concerning our industry and the market in which we operate, including our market position, market opportunity and market size, is based on information from various sources such as industry publications, on assumptions that we have made based on such data and other similar sources and on our knowledge of the markets for our products. These data involve a number of assumptions and limitations.

In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors” and elsewhere in this prospectus.Prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

USE OF PROCEEDS

This Prospectus relates to shares of our Common Stock that may be offered and sold from time to time by the Selling Stockholders. We will receive no proceeds from the sale of shares of Common Stock by the Selling Stockholders in this Offering. The proceeds from the sales will belong to the Selling Stockholders. However, we will receive proceeds from the sale of the Put Shares to Mast Hill pursuant to the EPA and from the exercise of the Warrants held by the Selling Stockholders if they are exercised for cash and not on a “Cashless” basis.

We intend to use the proceeds that we may receive for general corporate purposes and working capital requirements. There can be no assurance that we will sell any of the Put Shares or that the Warrants will be exercised. We cannot provide any assurance that we will be able to draw down any or all of the Maximum Commitment Amount, such that the proceeds received would be a source of financing for us.

THE SELLING STOCKHOLDERS

This Prospectus relates to the possible resale from time to time by the Selling Stockholders named in the table below of any or all of the Common Stock that has been or may be issued by us to the Selling Stockholders under the EPA. We are registering the Common Stock pursuant to the provisions of the Registration Rights Agreement entered into with Mast Hill in order to permit Mast Hill to offer its shares for resale from time to time.

The table below presents information regarding the Selling Stockholders and the Common Stock they may offer from time to time under this Prospectus. This table is prepared based on information supplied to us by the Selling Stockholders and reflects holdings as of May 15, 2023. As used in this Prospectus, the term “Selling Stockholders” includes each Selling Stockholder, and any donees, pledgees, transferees, or other successors-in-interest selling shares received after the date of this Prospectus from such Selling Stockholders as a gift, pledge, or other non-sale related transfer. The number of shares in the column “Maximum Number of Common Stock to be Offered Pursuant to this Prospectus” represents all of the Common Stock that each Selling Stockholder may offer under this Prospectus. Each Selling Stockholder may sell some, all or none of its shares offered by this Prospectus. We do not know how long any Selling Stockholder will hold its shares before selling them, and we currently have no agreements, arrangements, or understandings with the Selling Stockholders regarding the sale of any of the shares.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act and includes Common Stock with respect to which the Selling Stockholders have voting and investment power. With respect to the Equity Line with Mast Hill, because the purchase price of the Common Stock issuable under the EPA is determined on each settlement date, the number of shares that may actually be sold by us under the EPA may be fewer than the number of shares being offered by this Prospectus. The fourth column assumes the sale of all of the shares offered by the Selling Stockholders pursuant to this Prospectus.