Item 1.01. Entry into a Material Definitive Agreement.
On April 21, 2015, Harrison
Vickers and Waterman Inc., a Nevada corporation (the “Company”), entered into a Purchase Agreement (the “Purchase
Agreement”), with the three original shareholders of Attitude Beer Holding Co., a Delaware corporation (“ABH”),
namely, Attitude Drinks, Inc., a Delaware corporation (“Attitude Drinks”), Alpha Capital Anstalt, a company organized
under the laws of
Liechtenstein
(“Alpha”) and Tarpon Bay Partners LLC,
a Florida limited liability company (“Tarpon Bay”), pursuant to which the shareholders sold to the Company all of the
outstanding shares of stock of ABH and ABH thereupon became a wholly owned subsidiary of the Company. In consideration for the
purchase of the shares of common stock of ABH, the Company issued: (i) to Attitude Drinks, 51 shares of a
newly created Series B Preferred Stock of the Company (the “Series B Preferred Stock”) and a seven year warrant
(the “B Warrant”) to purchase 5,000,000 shares of the Company’s common stock, par value $.0001 per share (the
“Common Stock”), at an exercise price of $0.075 per share (subject to customary anti-dilution adjustments); (ii) to
Alpha, a secured convertible note due April 20, 2017 (the “Secured Convertible Note”) in the principal amount of $1,619,375
a seven year warrant (the “Alpha Warrant”), to purchase 1,295,500,500, shares of Common Stock at an exercise price of
$0.0025 per share (subject to customary anti-dilution adjustments), and an additional investment right (“AIR”) to purchase
up to $3,750,000 in additional notes (the “AIR Note”) and corresponding warrants (“the “AIR Warrant”);
and (iii) to Tarpon, a Secured Convertible Note in the principal amount of $554,791.67, a seven year warrant (the “Tarpon
Warrant”) to purchase 443,833,333 shares of Common Stock at an exercise price of $0.0025 per share (subject to customary
anti-dilution adjustments), and an AIR to purchase up to $1,250,000 in additional notes and corresponding AIR Warrants. In addition, Alpha acquired 32,300 shares of the Company’s Series A Preferred Stock (convertible into 32,300,000
shares of the Company’s Common Stock) from HVW Holdings LLC (an entity of which Mr. James Giordano, the Company’s prior
Chief Executive Officer and Chairman of the Board, is the managing member), subject to the terms of a Purchase Agreement (the “Series
A Purchase Agreement”). Attitude Drinks purchased 87,990,000 shares of Common Stock from HVW Holdings LLC at a price of $65,000,
subject to the terms of a Purchase Agreement (the “Common Stock Purchase Agreement”). The Alpha Warrant and the Tarpon
Warrant are collectively referred to herein as the “A Warrants” and the B Warrant and the A Warrants are collectively
referred to herein as the “Warrants.”
In December 2014,
ABH entered into a joint venture with New England World of Beer and together opened a 4,000 sq. foot tavern in West
Hartford, Connecticut that sells a selection of over 500 craft and imported beers along with tavern food and other spirits
and cocktails. New England World of Beer holds franchise rights for all of Connecticut and Massachusetts. Similar taverns
are currently open in 20 states, namely AL, AZ, CO, CT, FL, GA, IL, LA, MD, MI, NC, NJ, NY, OH, SC, TN, TX, VA, WA and
WI.
The Secured Convertible
Note, dated April 21, 2015 (the “Original Issue Date”) issued to Alpha in the principal amount of $1,619,375 and Tarpon
in the principal amount of $554,791.67 both mature on April 20, 2017, provide for interest on the outstanding principal amount
compounded annually at the annual rate of 10% (subject to increase as set forth therein)
payable on the first anniversary
of the Original Issue Date and on the date of maturity. At any time after the Original Issue Date, the holders at their option,
may convert the outstanding principal balance and accrued interest into shares of Common Stock of the Company. The conversion price
for the principal and interest in connection with voluntary conversions by a holder of a note is equal to the lesser of: (i) $0.0025
or (ii) 50% of the lowest Closing Price (as defined in the Secured Convertible Note) of the Common Stock for the 30 trading days preceding the conversion date, subject to adjustment as provided therein. Each Secured Convertible Note,
for example, is subject to adjustment upon certain events such as stock splits and has full ratchet anti-dilution protections for
issuance of securities by the Company at a price that is lower than the conversion price. Each Secured Convertible Note also contains
certain negative covenants, including prohibitions on incurrence of indebtedness, liens, charter amendments, dividends, redemption.
Neither Alpha nor Tarpon has the right to convert any portion of their Secured Convertible Note if it (together with its affiliates)
would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to
the exercise. The two Secured Convertible Notes are collectively collateralized by substantially all of the assets of the Company.
Pursuant to the terms of
an Exchange Agreement, dated April 21, 2015, by and among ABH, Attitude Drinks, Alpha and Tarpon, ABH and Attitude Drinks, Alpha
and Tarpon agreed to cancel ABH’s obligations under notes previously issued by ABH to Alpha and Tarpon and ABH and Attitude
Drinks agreed to guaranty the Secured Convertible Notes, and enter into the Pledge Agreement and Security Agreement described in
this paragraph. As such, the two Secured Convertible Note are collectively secured by a pledge of the 51 shares of Series
B Preferred Stock that were issued to Attitude Drinks, subject to the terms of a pledge agreement between Attitude Drinks and the
collateral agent on behalf of Alpha and Tarpon. In addition, ABH and Attitude Drinks guaranteed payment of all amounts owed under
the two Secured Convertible Notes, subject to the terms of a Guaranty executed by each of them with the collateral agent on behalf
of Alpha and Tarpon. The Company and each of its subsidiaries also granted Alpha and Tarpon a security interest in substantially
all of the assets of the Company, subject to the terms of a Security Agreements entered into by and among the Collateral Agent
for Alpha and Tarpon and the Company and each subsidiary.
As described above, the
Warrants are exercisable for shares of Common Stock upon the payment in cash of the exercise price and they are also exercisable
on a cashless basis at any time there is no effective registration statement registering the shares of Common Stock underlying
the Warrants. The exercise price of the Warrants is subject to adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions
of assets, including cash, stock or other property to our stockholder. The exercise price of the Warrants is also subject to full
ratchet price adjustment if the Company sells or grants any option to purchase, sell or re-price any Common Stock or Common Stock
Equivalents (as defined therein) at an exercise price lower that the current exercise price of the Warrant with the exception for
certain exempted issuance. In the event of a fundamental transaction, as described in the Warrants and generally including any
reorganization, recapitalization or reclassification of the Common Stock, the sale, transfer or other disposition of all or substantially
all of the Company’s properties or assets, the Company’s consolidation or merger with or into another person, the acquisition
of more than 50% of the outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power
represented by the outstanding Common Stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants
the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants
immediately prior to such fundamental transaction; provided that upon the occurrence of certain fundamental transactions, the holder
can require the Company to purchase the Warrant for cash at a price equal to the higher of the Black Scholes Value of the unexercised
portion of the Warrant or difference between the cash per share paid in the fundamental transaction and the exercise price per
share. The holder of Warrants will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates)
would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants.
Alpha and Tarpon were
each also issued an AIR to acquire for a period of twenty four months after the date of issuance of the AIR up to $3,750,000 and
$1,250,000, respectively, of principal amount of notes (the “AIR Notes”) and a corresponding amount of warrants (“AIR
Warrants”). Two Air Warrants to purchase Common Stock will be issued for each share of Common Stock that would be issued
on the exercise date of the AIR assuming full conversion of the AIR Note on such date at the conversion price of the AIR Note then
in effect. The AIR Warrant and AIR Note are identical to the Warrants and Secured Convertible Notes that were initially issued
to Alpha and Tarpon under the Purchase Agreement.
On April 22, 2015, the
Company filed the Series B Preferred Stock Certificate of Designation with the Secretary of State of Nevada (the “Certificate
of Designation”) setting forth the rights and preferences of the Series B Preferred Stock. A summary of material provisions
of the Series B Preferred Stock as set forth in the Certificate of Designations is set forth in Item 5.03 below.
The descriptions
in this Current Report on Form 8-K of the Series A Preferred Stock, the Series B Preferred Stock, the A Warrants issued to
Alpha, the A Warrant issued to Tarpon, the B Warrant, the Secured Convertible Note issued to Alpha, the Secured Convertible
Note issued to Tarpon the Additional Investment Right issued to Alpha, the Secured Convertible Note issued to Tarpon, and the
terms of the Purchase Agreement, Pledge Agreement, Security Agreement, Guaranty of ABH, Guaranty of Attitude Drinks, Inc.,
the Exchange Agreement, the Series A Purchase Agreement and the Common Stock Purchase Agreement are qualified in their
entirety by reference to the full text of such documents, copies of which are filed as Exhibits 3.1, 3.2. 4.1, 4.2. 4.3, 4.4,
4.5, 4.6, 4.7, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 99.1 and 99.2 to this Current Report on Form 8-K, respectively, and
are incorporated by reference herein.
Item
2.01
Completion of Acquisition or Disposition of Assets
On April 21, 2015, the
Company entered into a Purchase Agreement (the “Purchase Agreement”), with the three original shareholders of Attitude
Beer Holding Co., a Delaware corporation (“ABH”), namely, Attitude Drinks, Incorporated, a Delaware corporation (“Attitude
Drinks”), Alpha Capital Anstalt, a company organized under the laws of Liechtenstein (“Alpha”) and Tarpon Bay
Partners LLC, a Florida limited liability company (“Tarpon Bay”), pursuant to which the shareholders sold to the Company
all of the outstanding shares of stock of ABH and ABH thereupon became a wholly owned subsidiary of the Company. In consideration
for the purchase of the shares of common stock of ABH, the Company issued: (i) to Attitude Drinks, 51 shares of a newly
created Series B Preferred Stock of the Company (the “Series B Preferred Stock”) and a seven year warrant (the “B
Warrant”) to purchase 5,000,000 shares of the Company’s common stock, par value $.0001 per share (the “Common
Stock”), at an exercise price of $0.075 per share (subject to customary anti-dilution adjustments); (ii) to Alpha, a secured
convertible note due April 20, 2017 (the “Secured Convertible Note”) in the principal amount of $1,619,375 a seven
year warrant (the “Alpha Warrant”), to purchase 1,295,500,500, shares of Common Stock at an exercise price of $0.0025
per share (subject to customary anti-dilution adjustments), and an additional investment right (“AIR”) to purchase
up to $3,750,000 in additional notes (the “AIR Note”) and corresponding warrants (“the “AIR Warrant”);
and (iii) to Tarpon, a Secured Convertible Note in the principal amount of $554,792, a seven year warrant (the “Tarpon Warrant”)
to purchase 443,833,333 shares of Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments),
and an AIR to purchase up to $1,250,000 in additional notes and corresponding AIR Warrants. In addition, Alpha acquired
32,300 shares of the Company’s Series A Preferred Stock (convertible into 32,300,000 shares of the Company’s Common
Stock) from HVW Holdings LLC (an entity of which Mr. James Giordano, the Company’s prior Chief Executive Officer and Chairman
of the Board, is the managing member), subject to the terms of a Purchase Agreement (the “Series A Purchase Agreement”).
Attitude Drinks purchased 87,990,000 shares of Common Stock from HVW Holdings LLC at a price of $65,000, subject to the terms
of a Purchase Agreement (the “Common Stock Purchase Agreement”). The Alpha Warrant and the Tarpon Warrant are collectively
referred to herein as the “A Warrants” and the B Warrant and the A Warrants are collectively referred to herein as
the “Warrants”.