10-Q

 FORM 10-Q

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT

Commission file number: 000-525-33

HANGOVER JOE’S HOLDING CORPORATION

 (Exact name of the registrant as specified in its charter)

Colorado	20-8097439
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

9457 S. University #349

Highlands Ranch, CO 80126

(Address of principal executive offices)

303-872-5939

Telephone number, including Area code

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

Large accelerated filer o       Accelerated filer o       Non-accelerated filer o       Smaller reporting Company x

There were 122,591,301 shares of the registrant's $0.001 par value common stock outstanding as of December 19, 2013

HANGOVER JOE’S HOLDING CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2013

CONTENTS

PART I – Financial Information	Page
Item 1.  Financial Statements	2
Consolidated Financial Statements (unaudited):
Consolidated Balance Sheets at September 30, 2013 and December 31, 2012	2
Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2013 and September 30, 2012	3
Consolidated Statement of Changes in Stockholders’ Deficit for the Nine Months Ended September 30, 2013	4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and September 30, 2012	5
Notes to Consolidated Financial Statements	6 – 18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18 - 23
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	23
PART II – Other Information
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 5.  Other Information	24
Item 6. Exhibits	24

1

HANGOVER JOE’S HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2013			2012
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	9,627		$	8,779
Accounts receivable, net		42,235			131,273
Inventory		52,813			26,634
Prepaid expenses		-			188,570
Total current assets		104,675			355,256
PROPERTY AND EQUIPMENT, NET		2,416			3,215
TOTAL ASSETS	$	107,091		$	358,471
LIABILITIES AND DEFICIT
CURRENT LIABILITIES
Accounts payable	$	919,542		$	594,866
Accrued expenses		362,612			960,465
Stock subscription deposit		320,500			-
Revolving note payable		378,216			97,611
Convertible note		117,733			-
Payable to shareholder		-			20,000
Mandatorily redeemable preferred stock		67,500			-
Notes payable - related party		89,422			89,422
TOTAL LIABILITIES, all current		2,255,525			1,762,364
COMMITMENTS AND CONTINGENCIES
DEFICIT
Preferred stock; $0.10 par value; authorized shares-10,000,000
Series A; 425,000 authorized shares, 87,501 and 87,501 shares
issued and outstanding, respectively		315,078			315,078
Common stock; $0.001 par value; 150,000,000 authorized shares,
122,591,301 and 120,846,348 shares issued and outstanding,
respectively		122,592			120,847
Additional paid-in capital		1,569,604			623,790
Accumulated deficit		(4,155,708	)		(2,463,608	)
Total  deficit		(2,148,434	)		(1,403,893	)
TOTAL LIABILITIES AND DEFICIT	$	107,091		$	358,471

 The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

HANGOVER JOE’S HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
NET SALES	$	4,145		$	386,560		$	322,120		$	736,081
COST OF GOODS SOLD		3,275			244,154			252,214			479,736
GROSS PROFIT		870			142,406			69,906			256,345
OPERATING EXPENSES
Selling and marketing		146,121			258,167			573,034			607,434
General and administrative		202,385			277,796			898,028			591,723
Total operating expenses		348,506			535,963			1,471,062			1,199,157
LOSS FROM OPERATIONS		(347,636	)		(393,557	)		(1,401,156	)		(942,812	)
OTHER EXPENSE
Interest expense		(52,455	)		4			(290,944	)		(211	)
NET LOSS	$	(400,091	)	$	(393,553	)	$	(1,692,100	)	$	(943,023	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE		*			*		$	(0.01	)	$	(0.01	)
Basic and diluted weighted average common shares outstanding		122,591,301			108,791,655			122,496,505			66,674,801

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

HANGOVER JOE’S HOLDING CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

NINE MONTHS ENDED SEPTEMBER 30, 2013

(Unaudited) 

							Preferred Stock				Additional
	Common Stock						Series A				paid-in		Accumulated
	Shares			Amount			Shares		Amount		capital		deficit			Total
Balances, January 1, 2013		120,846,348		$	120,847			87,501	$	315,078	$	623,790	$	(2,463,608	)	$	(1,403,893	)
Common shares returned by founder		(4,500,000	)		(4,500	)		-		-		4,500		-			-
Common shares issued for accrued
settlement costs		4,500,000			4,500			-		-		648,000		-			652,500
Common shares issued for
debt financing costs		194,953			195			-		-		21,055					21,250
Common shares issued for accrued
consulting services		1,500,000			1,500			-		-		223,500		-			225,000
Beneficial conversion feature		-			-			-		-		31,735		-			31,735
Common shares issued for settlement		50,000			50			-		-		5,450		-			5,500
Warrants to acquire common shares
issued for investor relations services		-			-			-		-		11,574		-			11,574
Net loss		-			-			-		-		-		(1,692,100	)		(1,692,100	)
Balances, September 30, 2013		122,591,301		$	122,592			87,501	$	315,078	$	1,569,604	$	(4,155,708	)	$	(2,148,434	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

HANGOVER JOE’S HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 30,
	2013			2012
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$	(1,692,100	)	$	(943,023	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Contributed services		-			50,000
Bad debt expense		82,405			11,624
Amortization of prepaid consulting paid for in stock		278,618			-
Amortization of debt issuance costs		231,475			-
Amortization of debt discount		10,578
Warrant issued for services		11,574			-
Settlement costs to dissenting shareholder		5,500			-
Depreciation expense		799			708
Stock-based compensation		-			18,688
Changes in operating assets and liabilities:
Accounts receivable		6,633			(107,123	)
Prepaid expenses		44,952			(70,110	)
Deposits		-			7,500
Inventory		(26,179	)		(80,379	)
Accounts payable		324,676			371,806
Customer deposits		-			99,140
Accrued expenses		144,647			(28,865	)
Net cash used in operating activities		(576,422	)		(670,034	)
CASH FLOW FROM INVESTING ACTIVITIES:
Net cash received from sale of subsidiary interest					10,044
Purchase of property, plant and equipment		-			(1,098	)
Net cash provided by investing activities		-			8,946
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		-			710,214
Deposit on stock subscription		320,500			-
Payment made to dissenting shareholder		(20,000	)		-
Borrowings under revolving credit facility		481,263			-
Payments under revolving credit facility		(103,046	)		-
Net payments under inventory financing payable		(97,610	)		(23,712	)
Cash received for convertible note payable		125,000			-
Cash paid for debt issuance costs		(71,337	)		-
Redemption of Series B Preferred Stock		(57,500	)		-
Advances (paid to) received from related party		-			(26,957	)
Withdrawals		-			(10,579	)
Net cash provided by financing activities		577,270			648,966
Net (decrease) increase in cash		848			(12,122	)
Cash, beginning of period		8,779			53,048
Cash, end of period	$	9,627		$	40,926
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid	$	23,445		$	223
SUPPLEMENTAL DISCLOSURE OF NONCASH ITEMS
Mandatorily redeemable preferred stock issued for
debt issuance costs	$	125,000		$	-
Common stock issued for debt issuance costs	$	21,250		$	-
Common stock issued for accrued settlement	$	652,500		$	-
Common stock issued for accrued consulting	$	225,000		$	-
Beneficial conversion recorded on convertible note	$	31,735		$	-
Discount issued for debt issuance costs	$	13,888		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

HANGOVER JOE'S HOLDING CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANICAL STATEMENTS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT’S PLANS

Organization:

Hangover Joe’s Holding Corporation (“HJHC” or the “Company”) was originally incorporated in the State of Colorado in December 2005 as Across American Real Estate Exchange, Inc. (“AAEX”). In May 2010, AAEX changed its name to Accredited Members Holding Corporation (“AMHC”). On July 25, 2012, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Hangover Joe’s, Inc., a privately-held Colorado corporation (“HOJ”), whereby on July 25, 2012, the Company acquired HOJ in a reverse triangular merger (the “Acquisition”).  Prior to the Acquisition, the Company had 36,807,801 shares outstanding. Upon closing the Acquisition, the Company issued 83,514,827 common shares to the HOJ shareholders in exchange for all of their ownership interests in HOJ such that the former owners of HOJ owned approximately 69% of the Company post Acquisition.  The shareholders of the Company prior to the Acquisition owned approximately 31% of the Company post Acquisition.  In connection with the Acquisition on July 25, 2012, the Company changed its name to Hangover Joe’s Holding Corporation.

The Merger Agreement further provided that within five business days after the closing of the Acquisition, the Company would sell to Accredited Members Acquisition Corporation (“Buyer”) all of the equity interests in three of the Company’s subsidiaries (the “Sale”), being Accredited Members, Inc., AMHC Managed Services, Inc. and World Wide Premium Packers, Inc. (collectively, the “Subsidiaries”).  Buyer is a privately-held Colorado corporation owned by two former directors of the Company, JW Roth and David Lavigne.  The parties closed the Sale on July 27, 2012.  The Buyer paid $10,000 and assumed all liabilities related to the business of the Subsidiaries in exchange for all of the shares in the Subsidiaries owned by the Company.

HOJ is a Colorado corporation formed on March 5, 2012.  HOJ was formed for the purpose of acquiring all of the assets of both Hangover Joe’s Products LLC (“HOJ LLC”) and Hangover Joe’s Joint Venture (“HOJ JV”).  HOJ LLC had conducted operations through HOJ JV, with the owner of HOJ LLC being one of the same owners and control persons of HOJ JV. Effective March 30, 2012, HOJ acquired the net assets of HOJ LLC and HOJ JV through the issuance of common stock of HOJ.  Because HOJ had no significant assets or business operations prior to the merger and each of these entities were owned by the same control group, this transaction was accounted for as a reorganization of entities under common control.  Accordingly, the historical results of operations of HOJ LLC and HOJ JV prior to March 30, 2012 are included in the results of operations of the Company.

Because all of the operating businesses of AMHC were contemporaneously sold within five business days after the Acquisition, the transaction has been accounted for as a recapitalization of HOJ.  Accordingly, the accompanying consolidated financial statements include the financial position, results of operations and cash flows of HOJ and its predecessor entities, HOJ LLC and HOJ JV, prior to the date of Acquisition. The historical results of operations and cash flows of AMHC and the Subsidiaries prior to the date of the Acquisition have been excluded from the accompanying consolidated financial statements. The stockholders’ equity of HOJ prior to the Acquisition has been retroactively restated for the equivalent number of shares received in the exchange after giving effect to any differences in the par value of the AMHC and HOJ common stock, with an offset to additional paid-in capital.  The restated consolidated accumulated deficit of the accounting acquirer (HOJ) has been carried forward after the exchange.

Description of Business:

The Company sells an all-natural, two-ounce beverage, formulated to help relieve the symptoms associated with alcohol induced hangovers – the Hangover Recovery Shot. The Hangover Recovery Shot is an officially licensed product of The Hangover movie series from Warner Brothers.  The Company has registered the trademark “Hangover Joe’s Get Up & Go” with the U.S. Patent and Trademark office. The assets consist of intellectual property relating to Hangover Joe’s Recovery Shot, including but not limited to a license agreement dated July 19, 2011, between HOJ LLC and Warner Bros. Consumer Products, Inc.  The license agreement permits HOJ to use the costumes, artwork logos, and other elements depicted in the 2009 movie “The Hangover” during the term of the license agreement, as amended, which expires January 31, 2016.  The Company sells its products primarily to convenience stores, liquor stores, and grocery stores through distribution agreements, as well as through online internet sales. The Company began selling a hangover recovery shot in February 2011 and began selling the licensed Hangover Joe’s Recovery Shot in July 2011. HOJ is actively seeking to expand the distribution of the Hangover Joe’s Recovery Shot, and has recently entered into distribution agreements to expand its reach to Australia, New Zealand and Canada.

6

 Management’s plans

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company reported a net loss of approximately $400,000 and $1,692,000 for the three and nine months ended September 30, 2013, and a working capital deficiency and accumulated deficit of approximately $2,150,000 and $4,155,000, respectively, at September 30, 2013.  The Company has a limited operating history and has relied primarily on debt financing and private placements of its common stock to fund its operations. It is also in default on its revolving credit facility with TCA Global Financial (note 3). The Company cannot provide any assurance it will be able to raise funds through a future issuance of debt or equity to carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts or classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Management’s plans with regards to these conditions are described below.

Management has taken various steps to increase capital resources and improve liquidity.  

-   On April 12, 2013, the Company executed a term sheet with an accredited investor (“Investor”) for a proposed investment of $1,000,000 in the Company in exchange for 15,000,000 shares of common stock, 5,000,000 shares of newly authorized Series C Preferred Stock (convertible into 15,000,000 shares of common stock) and warrants to acquire 500,000 shares of common stock at $0.12 for a period of five years. The first tranche of $500,000 was to be deposited on or before May 17, 2013 in exchange for 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. The second tranche of $500,000 is to be deposited on or before September 20, 2013 in exchange for 5,000,000 shares of Series C Preferred Stock and warrants to acquire 250,000 common shares described above (See Note 7). As of December 18, 2013, the Company received $340,500 toward the first investment tranche ($20,000 of which was received subsequent to September 30, 2013) (Note 7).

-   In June 2013, the Company entered into a 12% 12 month convertible note for up to a maximum borrowing of $500,000 with JMJ Financial, Inc. The Company was advanced $125,000, less fees and closing costs. (Note 3).  

-   In November 2013, the Company entered an arrangement with Fundable.com to raise $500,000. (Note 9). To date, this project has not commenced. Additionally the Company has entered into a $25,000 convertible note with JSJ Financial; however no funds have been received under this note agreement.

-   Management has also taken steps to reduce its operating costs. As part of this effort, certain executive officers and consultants agreed to defer a portion of their compensation effective October 1, 2012.   On December 16, 2013, the Company announced signing of a distribution contract for the sale of hangover recovery shots in Japan. Over the next three years the Company intends to distribute its recovery shots through up to 8,600 drug and food stores, and sales are expected to reach over 10 million bottles. This is the largest distribution agreement yet internationally for the Company to date. The Company intends to start shipping containers to Japan in early 2014. The contract calls for one million bottles to be shipped in 2014, which would exceed all of our sales to date, followed by three million bottles in 2015, and six million in 2016. The Company is pursuing additional opportunities but has no assurance they will materialize. The contract will require marketing support and additional capital which the company intends to pursue vigorously. There is no assurance the Company can raise the capital or perform the contractual requirements without capital.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial information contained herein should be read in conjunction with the Company's consolidated audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2012.

7

The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements included in this quarterly report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at the dates presented and the Company’s results of operations and cash flows for the periods presented.  The Company’s interim results are not necessarily indicative of the results to be expected for the entire year.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its 100%-owned subsidiary.  All intercompany accounts, transactions, and profits are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are used in accounting for certain items such as allowance for doubtful accounts, revenue recognition, and stock-based compensation. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.

Accounts Receivable and Concentration of Credit Risk

The Company is subject to credit risk through trade receivables. This credit risk is mitigated by the diversification of the Company’s operations, as well as its customer base. The Company grants varying payment terms to its customers. Payment terms for customers can vary from due upon receipt up to net 45 days.

Four customers comprise approximately 84% of trade accounts receivable at September 30, 2013; these individual customer balances represent approximately 26%, 21%, 19% and 18% of the trade accounts receivable.  Two customers comprise approximately 78% of the trade accounts receivable at December 31, 2012; these individual customer balances represent approximately 65%, and 13% of the total trade accounts receivable. No single customer accounted for 10% or more of net sales for the three or nine months ended September 30, 2013.  One customer accounted for 44% and 23% of net sales for the three months and nine months ended September 30, 2012 respectively.  

Ongoing credit evaluations of customers’ financial condition are performed. Collateral is not required. The Company maintains an allowance when necessary for doubtful accounts that is the Company’s best estimate of potentially uncollectible trade receivables. Provisions are made based upon a specific review of all significant outstanding invoices that are considered potentially uncollectible in whole or in part. For those invoices not specifically reviewed or considered uncollectible, general provisions are provided at different rates, based upon the age of the receivable, historical experience, and other currently available evidence. The allowance estimates are adjusted as additional information becomes known or as payments are made. As of September 30, 2013 the allowance for doubtful accounts was approximately $113,000 and at December 31, 2012, the allowance for doubtful accounts was $11,624.

Inventory

Inventory is valued at the lower of cost (first-in, first-out) or market value. The inventory at September 30, 2013 consisted of finished goods and packing supplies and at December 31, 2012 primarily consisted of packing supplies.

License and Royalties

The Company has a license with Warner Bros. Consumer Products, Inc. (“WBCP”) that allows the Company the use of the costumes, artwork, logos and other elements depicted in the 2009 movie, The Hangover.  This license, as amended, expires January 31, 2016.  The terms of the WBCP license provide for royalties based on a percentage of products sold, as defined, subject to agreed-upon guaranteed minimum royalties. Guaranteed minimum royalty payments are made periodically over the term of the license and are recorded when paid as a prepaid expense in the balance sheet.  The prepaid expense is amortized to royalties in cost of goods sold at a ratio of current period revenues to the total revenues expected to be recorded over the term of the license.  The Company reviews its sales projections quarterly to determine the likely recoverability of its prepaid asset, as well as any unpaid minimum obligation.  If management determines that the prepaid expense is unlikely to be recovered by product sales, prepaid license expense is charged to cost of goods sold, based on current and expected revenues, in the period in which such determination is made.   

8

Revenue Recognition

The Company has contractual agreements with certain third-party distributors.  Under the agreements, the Company is not guaranteed any minimum level of sales or transactions.  The Company also offers its products for sale through its website at www.hangoverjoes.com.

The Company recognizes revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists; (2) delivery to third party distributors and consumers via the Company’s website has occurred; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured.  Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract between the Company and the customer.  For sales to distributors, revenue is usually recognized at the time of delivery.  The Company defers revenues on products sold to distributors for which there is a lack of credit history or if the distribution may be in a new market in which the Company has no prior experience.  The Company defers revenue in these situations until cash is received.  For sales through the Company’s website, revenue is recognized at time of shipment.

Management evaluates the terms of its sales in consideration of the criteria outlined in Principal Agent Consideration with regards to its determination of gross versus net reporting of revenue for transactions with customers.  The Company sells, through its website, Hangover Joe’s Recovery Shots.  In these transactions, management has determined that the Company (i) acts as principal; (ii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns; and (iii) has latitude in establishing price with the customer.  For these transactions, the Company recognizes revenue on a gross basis.

The Company offers a variety of incentives and discounts to distributors, customers and consumers through various programs to support the distribution of its products.  These incentives and discounts include cash discounts, price allowances, volume based rebates and product placement fees.  These incentives and discounts are reflected as a reduction of gross sales to arrive at net sales. The aggregate deductions from gross sales recorded in relation to these programs were approximately $6,000 and $12,000 for the three months and nine months ended September 30, 2013 and $7,400 and $17,200 for the three and nine months ended September 30, 2012, respectively.

Cost of Goods Sold

Cost of goods sold consists of the costs of raw materials utilized in the production of its product, co-packing fees, and in-bound freight charges. Raw material costs account for the largest portion of the cost of goods sold. Raw materials include bottles, ingredients and packaging materials. The manufacturer is responsible for the ingredients. Costs of goods sold also include license and royalty expenses.

Supplier/Manufacturer Concentration

The Company relies on its third-party suppliers for raw materials necessary for its products, and it relies on third-party manufacturers for the production of its product.  Although the Company believes that it could utilize alternative suppliers and manufacturers, any delay in locating and establishing relationships with other suppliers/manufacturers could result in product shortages and back orders for the products, with a resulting loss of net sales and profitability.  The Company’s third-party manufacturer acquires some ingredients from suppliers outside of the United States.  Purchasing these ingredients is subject to the risks generally associated with importing raw materials from other countries, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, tariffs, trade disputes and foreign currency fluctuations.  These factors could result in a delay in or disruption of the supply of certain raw materials.  Any significant delay in or disruption of the supply of raw materials could have a material adverse effect on the Company’s business.

Sales and Marketing Expenses

Sales and marketing costs include selling expenses such as distribution expenses to transport products to customers and warehousing expenses after manufacture, as well as expenses for advertising, sampling and in-store demonstration costs, costs for merchandise displays, point-of-sale materials, trade shows, other marketing expenses and product design expenses.

Advertising Expenses

Advertising costs are expensed as incurred and are included in sales and marketing expense in the accompanying consolidated statements of operations. Total advertising expenses were approximately $1,000 and $101,000 for the three months and nine months ended September 30, 2013 and $47,000 and $104,000 for the three months and nine months ended September 30, 2012, respectively.

9

Income Taxes

Prior to March 2012, no provision for income taxes was provided in the accompanying financial statements because HOJ LLC (as a limited liability company), and HOJ JV (as a partnership), elected to file as partnerships, and therefore management believes that prior to September 30, 2012 the Company was not subject to income taxes, and, that such taxes were the responsibility of the individual member/partners.

Beginning in March 2012, as a corporation, the Company now records a provision for deferred income tax assets and liabilities in order to reflect the net tax effects of temporary differences between (i) the tax basis of assets and liabilities and (ii) their reported amounts in the financial statements.  The provision is based upon enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income.  The Company establishes a valuation allowance when necessary to reduce deferred income tax assets to the amounts expected to be realized.  The Company expects to file income tax returns in the US Federal jurisdiction and various State jurisdictions.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements.

The Company’s policy is to classify tax related interest and penalties as income tax expense. There is no interest or penalties estimated on the underpayment of income taxes as a result of unrecognized tax benefits.

Stock-Based Compensation

Stock-Based Compensation is recognized for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award.  Stock-Based Compensation expense is recognized over the period of service in exchange for the award (generally the vesting period).  The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

For shares issued to non-employees for goods or services, the Company accounts for these shares in accordance with ASC 505-50.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever are more reliably measurable (a) goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of the performance commitment date or performance completion date.

Net Loss per Share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Historical loss per share of the accounting acquirer (HOJ) has been adjusted retroactively to reflect the new capital structure of the Company as a result of the Merger Agreement.  Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Stock options, warrants, common shares underlying convertible preferred stock and convertible notes payable in the aggregate of  24,457,845, -0-, 24,457,845 and -0- shares as of and for the three and nine months ended September 30, 2013 and 2012 , respectively, were not included in the calculation of diluted net loss per common share because the effect would have been anti-dilutive.

Antidilutive shares of approximately 9,775,250 are included in the three and nine months ended September 30, 2013 for the prorated potential common share and warrant to be issued under the stock subscription agreement.

Fair Value of Financial Instruments

ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.

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The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.

·   Level 1: Quoted prices in active markets for identical assets or liabilities.

·   Level 2: Observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

·   Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2013 and December 31, 2012, the Company had no financial assets or liabilities required to be reported for fair value purposes.

The carrying value of the Company’s financial instruments, including cash, accounts receivable, accounts payable, line of credit, mandatorily redeemable preferred stock, and the inventory financing payable approximate fair value at September 30, 2013 and December 31, 2012, due to the relatively short maturity of the respective instruments. The fair value of related party payables is not practicable to estimate due to the related party nature of the underlying transactions.

Recent Accounting Pronouncements

In February 2013, FASB issued Accounting standards update 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires an entity to provide information about the amount reclassified out of accumulated other comprehensive income by component. The entity is also required to disclose significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting periods. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other discourses required under U.S. GAAP that provide additional detail about those amounts. The objective in this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update should be applied prospectively for reporting periods beginning after December 15, 2012. The adoption of this standard did not have a material impact on the Company's reported results of operations or financial position.

NOTE 3 – DEBT

Inventory financing and factoring arrangements

In September 2012, the Company entered into a factoring agreement with a finance company which provided financing up to $250,000, secured by the accounts receivable and inventory of the Company. The finance company advanced to the Company up to 80% of eligible accounts receivable and was entitled to collect receivables directly from the Company’s customers.  The Company paid a financing fee equal to 2.5% for receivable amounts outstanding up to 30 days and an additional rate of 0.084% per day (30.7% annualized) after the initial 30 days with a maximum exposure of 60 days.  

In October 2012, the Company entered into a purchase order financing arrangement with this same finance company which supplements the factoring agreement above.  The finance company advanced up to 100% of the manufacturing and shipping costs at the time a Company purchase order is submitted to the manufacturer.  The Company paid a financing fee equal to 3.85% of the purchase order amount for each transaction and an additional rate of 0.13% per day (47.4% annualized) after the initial 30 days. As of December 31, 2012, the inventory financing payable under the purchase order financing and factoring arrangement was $97,611.  Amounts outstanding under this agreement were paid in full in January 2013 when the Company entered into the revolving credit facility.

Revolving Credit Facility

On January 10, 2013, the Company entered into a senior secured lending arrangement with TCA for up to a maximum borrowing of $6,000,000. The credit facility provided for an initial line of credit of $425,000 based upon accounts receivables and projected sales and is to be used only as permitted under the specified use of proceeds for working capital purposes. The  initial line of credit has a six month term from the date of closing with a six month renewal option. The lending arrangement is secured by all of the assets of the Company. As a partial guaranty under the TCA lending arrangement, the Company’s CEO personally guaranteed certain representations made by the Company to TCA.  At closing, the Company was advanced $425,000 less fees and closing costs, and an additional $56,000 has been advanced to the company through September 30, 2013.

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In connection with the agreement above, TCA was issued an investment banking fee consisting of 125,000 shares of newly authorized Series B Preferred Shares in the Company equating to an aggregate of $125,000 in the Company’s capital stock. The shares are mandatorily redeemable and scheduled to be repaid over the remainder of calendar year 2013. See below for further discussion of the Series B Preferred shares. Also in connection with the TCA agreement, the Company issued 194,954 shares of common stock to a consulting firm as consideration for a finder’s fee for this transaction.

The Company is in default in its agreement with TCA and is currently trying to renegotiate its arrangement.

Mandatorily Redeemable Series B Preferred Stock

On January 10, 2013, the Board of Directors approved the authorization of 125,000 shares of Series B Preferred Stock (the “Series B Preferred Stock”).  In connection with the TCA transaction, the Company issued 125,000 shares of Series B Preferred Stock. The Series B Preferred Stock ranks pari passu to the Common Stock. The Holder of outstanding shares of Series B Preferred Stock shall be entitled to notice of any shareholders’ meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the holders of common stock. Each share of Series B Preferred Stock shall have one vote per share. All outstanding shares of Series B Preferred Stock will be entitled to be paid the “Liquidation Preference,” which is defined and calculated as follows: $125,000 in the aggregate (not on a per share basis), payable monthly at various amounts, and due in full by virtue of the TCA default discussed above.  The mandatorily redeemable preferred stock is presented as a current liability in the accompanying September 30, 2013 balance sheet.

Convertible Promissory Note

On June 19, 2013, the Company closed on a 12%, 12 month convertible promissory note (the “Note”) with JMJ Financial (“JMJ”). The face amount of the Note reflects a principal sum of $500,000 for total consideration of $450,000 (or a 10% original issue discount). Upon closing of the Note, the Company received $100,000 from JMJ. On September 24, 2013, the Company received an additional $25,000 from JMJ.

JMJ has the right, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The conversion price is the lesser of $0.05 or 70% of the average of the three lowest closing prices in the 25 trading days previous to the conversion.

The Note is subject to various default provisions (an “Event of Default”), and the occurrence of such an Event of Default will cause the outstanding principal amount under the Note, together with accrued and unpaid interest, and all other amounts payable under the Note, to become, at JMJ’s election, immediately due and payable to JMJ.

The Company determined a beneficial conversion feature exists at the commitment date. A beneficial conversion feature of $32,000 was recorded as a discount to the note and has been amortized over the life of the loan. The debt discount recorded at September 30, 2013 is approximately $22,000.

NOTE 4 – ACCRUED EXPENSES

Accrued expenses as of September 30, 2013 and December 31, 2012 consist of the following:

	September 30,		December 31,
	2013		2012
Accrued expenses	$	6,520	$	37,005
Deferred salaries		166,594		45,960
Accrued settlement costs – paid for in common stock		172,000		652,500
Accrued consulting costs – paid for in common stock		-		225,000
Accrued Interest		17,498		-
	$	362,612	$	960,465

In January 2013, the Company issued 4,500,000 and 1,500,000 common shares for the accrued settlement costs and accrued consulting costs, respectively. See Note 6 for further discussion of accrued settlement costs and accrued consulting costs.

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Investor Relations Agreement

On February 15, 2013, the Company entered into an investor relations agreement with a firm which required the Company to pay a consulting fee of $2,500 per month and to provide 100,000 shares of the Company's common stock per month and warrants to purchase 100,000 shares of the Company’s common stock per month. Based on the terms of the agreement, the Company determined that the measurement date of the shares to be issued is on the dates that the shares are earned, which is monthly.  The February and March common stock earned have an estimated fair value as $37,000 based on the closing market price on February 15, 2013 and March 1, April 1, and May 1,  respectively.   As the shares of common stock have not been issued as of September 30, 2013, the Company has recorded an accrued expense of $37,000 on the consolidated balance sheet until such shares are issued.

NOTE 5 – RELATED PARTY TRANSACTIONS

5.5% Promissory note payable, related party

The President/CEO of the Company has advanced funds to the Company from time to time for working capital.  As of September 30, 2013 and December 31, 2012, amounts payable to this party were $89,422 and $89,422, respectively.  These advances were non-interest bearing, unsecured, and due on demand. On March 1, 2013, the Company converted the outstanding advance amount of $89,422 into a promissory note.  Interest at the rate of 5.5% per annum is compounded and paid annually.  Principal payments in the amount of $14,966 and accrued interest shall be payable in six installments with the first payment due on June 15, 2013, which was not paid as of December 18, 2013.

Other related party transactions

During the three months and nine months ended September 30, 2013, the Company recorded net sales of $-0- and $4,693 for product sold to a Company that is 32% owned by a board of director.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

WBCP License Agreement

The Company has a license with WBCP that allows the Company the use of the costumes, artwork, logos and other elements depicted in the 2009 movie, The Hangover.  This license had an initial term through January 31, 2013 and provides for certain royalties based on a percentage of products sold subject to certain agreed-upon guaranteed minimum royalty payments over the term of the license.

In January 2013, the Company entered into an extension of its product license agreement with WBCP extending the term of the agreement to January 31, 2016. Further, the extension added certain channels of distribution and required certain agreed-upon additional Guaranteed Consideration of $200,000, as defined over the next three years. Pursuant to the agreement, $75,000 of Guaranteed Consideration was paid in January 2013, payments of $50,000 are due on or before October 1, 2013 and 2014, and a payment of $25,000 is due on or before October 1, 2015. The amount was recorded as a prepaid expense and was amortized to October 1, 2013 when the next payment is due. The Company recognized $27,000 and $75,000 in cost of sales for royalties on this agreement for the three months and nine months ended September 30, 2013.  The Company paid WBCP $20,000 of the $50,000 Guaranteed Consideration amount due as of October 1, 2013, subsequent to September 30, 2013.  The Company has negotiated an extension agreement with WBCP for the remaining amount due until December 31, 2013.

Royalty and Commission Agreements

The Company has a representative agreement with an individual who became a member of the Company’s board of directors in March 2012. Under this agreement, as amended, this individual is entitled to a commission of between 4% and 6% of sales made by this individual, based on the nature of the sales, and a royalty of 3% of all sales made by the Company, as defined. Commissions and royalty expense to this individual for the nine months ended September 30, 2013 and 2012 totaled approximately $43,000 and $41,000 respectively. Effective April 1, 2012, the Company agreed to pay this individual a $6,000 draw per month against commissions. As of September 30, 2013 and December 31, 2012, net prepaid expenses related to draws in excess of commissions were nil and approximately $28,000, respectively.

The Company has an agreement with a second individual for design services. Under this agreement, as amended, this individual is entitled to receive a royalty of 2% of net sales, as defined. Royalty expense to this individual was $8,465 and $2,500 for the three months ended September 30, 2013 and 2012, respectively. Effective April 1, 2012, the Company agreed to pay this individual a $3,000 draw per month against royalties. As of September 30, 2013 and December 31, 2012, net prepaid expenses related to draws in excess of royalties were nil and approximately  $17,000, respectively.

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Management Agreement with AMHC Managed Services

Effective March 1, 2012, HOJ entered into a management agreement (the “Management Agreement”) with AMHC Managed Services, Inc. (“AMHC Services”), a subsidiary of AMHC. The significant terms of the Management Agreement provided for monthly payments to AMHC Services in exchange for financial management and accounting services, corporate office and administrative services, and expertise regarding compliance with securities regulations.  The Management Agreement term was 24 months, and required the Company to pay AMHC Services $27,500 per month.

On October 1, 2012, AMHC Services suspended the accounting and financial management services provided under the Management Agreement due to a dispute under the contract.  In January 2013, the Company settled the dispute and terminated the Management Agreement in exchange for 3,000,000 shares of common stock (See below).

Settlement Agreement with AMHC Services and Other Claims

On January 14, 2013, the Company entered into a settlement agreement with AMHC Services, the principal owners of AMHC Services, and an independent third party pursuant to which the respective parties released each other from certain claims. Under the terms of the settlement, the Company issued AMHC Services 3,000,000 shares of its common stock, and issued the independent third party 1,500,000 shares of its common stock.  The fair value of the shares issued under this settlement was $652,500 based upon the closing price of the stock on the date of the signed settlement agreement. This settlement was recorded in year ended December 31, 2012 (see Note 4).

Strategic Consulting Agreement

In November 2012, the Company entered into a consulting agreement with The Bricktown Group (“Bricktown”) to provide beverage management and strategic advisory consulting services to the Company.  The consulting agreement has an initial term of nine months with an automatic extension of 180 days provided neither party has provided a written notice to not extend the agreement.  The contract can be terminated upon written notice at any time, but the Company is obligated to pay any fees accrued under the agreement.  The agreement requires the Company to pay an upfront retainer of $10,000 and monthly consulting fees of $10,000 per month, which was to be deferred until the Company raised at least $300,000 in debt or equity.  The Company is to issue 3,000,000 shares of the Company's common stock in two tranches, of which 1,500,000 shares are issuable upon request after January 4th, 2013 and 1,500,000 shares are issuable on March l, 2013. The first 1,500,000 shares are non-forfeitable and fully vested on the date of the agreement.

Based upon the terms of the agreement, the Company determined that the measurement date for the initial 1,500,000 shares to be issued under the agreement is the contract date and calculated a fair value of $225,000 based upon the closing market price on this date.  Accordingly, the Company recorded an accrued consulting cost liability of $225,000 on the consolidated balance sheet as of December 31, 2012 until such shares are issued.  The stock-based compensation associated with the initial shares of $225,000 was recorded as prepaid consulting costs and is being amortized over the initial 3 months of this agreement. For the nine months  ended September 30, 2013, the Company recognized consulting expense of $278,616 related to this agreement. The measurement date for the second tranche of 1,500,000 shares was March 1, 2013.  The fair value of these shares of $135,000 was determined based upon the closing market price of the Company’s common stock on this date and was amortized over the remaining 3 months of the contract.  On January 10, 2013, the Company issued the initial 1,500,000 shares of its common stock to Bricktown. The second tranche of shares have not been issued as of December 18, 2013. 

NOTE 7 – STOCKHOLDERS’ EQUITY

Preferred stock

The Company is authorized to issue up to 10,000,000 shares of Preferred stock, par value $0.10 per share.  The Articles of Incorporation provide that the Preferred stock may be issued from time to time in one or more series and gives the Board of Directors authority to establish the designations, preferences, limitations, restrictions, and relative rights of each series of Preferred Stock

Series A Preferred Stock

Of the 10,000,000 shares of the Company’s authorized Preferred Stock, ($0.10 par value per share), 425,000 shares are designated as Series A Convertible Preferred Stock (the “Series A Preferred”).  The holders of outstanding shares of Series A Preferred are entitled to notice of any shareholders’ meeting and to vote as a single class with the common stock upon any matter submitted for approval by the holders of common stock, on an as-converted basis, as defined. Each share of Series A Preferred shall have eight votes per share. If any dividend or distribution is declared or paid by the Company on common stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series A Preferred will be entitled to participate with the holders of common stock in such dividend or distribution, as defined.

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Additionally, upon liquidation, dissolution or winding up on the Company, the Series A Preferred shareholders are entitled to be paid together with the common shareholders on a pro-rata basis.  The Series A Preferred holders may convert such shares of Series A Preferred in whole or in part, at any time, or from time-to-time upon written notice to the Company subject to the terms set forth below. The Series A Preferred may, or shall, be converted into shares of the Company’s authorized but unissued common stock on the following bases: (i) At the option of the holder, at any time before the “Financial Milestone” is met each share of Series A Preferred shall be convertible into eight shares of the Company’s common stock. (ii) Upon the “Financial Milestone” being met, each share of Series A Preferred shall automatically be converted into 28.8 shares of the Company’s common stock. (iii) If the “Financial Milestone” has not been met by October 8, 2013, each share of Series A Preferred then outstanding shall automatically be converted into eight shares of the Corporation’s Common Stock.

Series C Preferred Stock

In April 2013, the Board of Directors approved the authorization of 5,000,000 shares of Series C Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred shares have voting rights equal to three votes per share and contain an automatic conversion into 15,000,000 common shares immediately upon the Company obtaining shareholder approval of, and filing with the Colorado Secretary of State, an increase in authorized common stock to at least 200,000,000 shares.

 On April 12, 2013, the Company executed a term sheet with an accredited investor (“Investor”) for a proposed investment of $1,000,000 in the Company in exchange for 15,000,000 shares of common stock, 5,000,000 shares of Series C Preferred Stock, and warrants to acquire 500,000 shares of common stock at $0.12 per share for a period of five years. The first tranche of $500,000 was to be deposited on or before May 17, 2013 in exchange for 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. The second tranche of $500,000 is to be deposited on or before September 20, 2013 in exchange for 5,000,000 shares of Series C Preferred Stock and warrants to acquire 250,000 common shares described above. As of September 30, 2013, the Company received $320,500 toward the first investment tranche.

The common shares and underlying common shares attributable to the Series C Preferred Stock and warrants will have piggyback registration rights that will be triggered if the Company files a registration statement with the Securities and Exchange Commission for the resale of other securities. The warrants may be redeemed by the Company if certain conditions are met, including that the shares underlying the warrants have been registered and the common stock trades at or above $.20 per share for 20 trading days. The Investor will be entitled to one seat on the Company's Board of Directors, and certain other development and distribution rights, as defined.

Common stock

The Company is authorized to issue up to 150,000,000 shares of $0.001 par value common stock. As discussed in Note 1, the Company entered into the Merger Agreement with HOJ, whereby the Company issued 83,514,827 common shares in exchange for all the outstanding shares of HOJ. This transaction has been accounted for as a recapitalization of HOJ and accordingly the historical stockholders’ equity transactions of HOJ prior to the Acquisition has been retroactively restated for the equivalent number of shares received in the exchange after giving effect to any differences in the par value of the AMHC and HOJ common stock, with an offset to additional paid-in capital. 

Surrender of Founder’s shares

In January 2013, a shareholder of the Company surrendered 4,500,000 shares of common stock to the Company’s treasury for no consideration.  The shares were initially issued to a founder in March 2012 and were returned to increase the number of common shares available.

Dissenting Shareholder

In connection with the Acquisition, an HOJ shareholder holding the equivalent of 612,953 shares of common stock asserted his rights as a dissenting shareholder under the Colorado Business Corporation Act and demanded payment for the fair value amount of his shares as of the date of the Acquisition.  In July 2012, the Company estimated the fair value of these shares to be $20,000 and recorded a payable to shareholder in the amount of $20,000 and corresponding decrease to Equity.

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On February 15, 2013, the Company entered into a settlement agreement with the dissenting HOJ shareholder.  Under the terms of the settlement agreement, the Company agreed to pay $5,000 cash at closing and $15,000 plus accrued interest at 5% within 90 days.  The Company also agreed to issue 50,000 shares of the Company’s common stock.  The fair value of the common stock at the date of settlement was $5,500.  As of September 30, 2013, the outstanding amount has been repaid in full.

Stock options

Effective March 11, 2009, AMHC established the 2009 Stock Option Plan (“the “2009 Plan).  The 2009 Plan established by AMHC was retained by the Company after the Acquisition.  Under the 2009 Plan, the Company may grant non-statutory and incentive options to employees, directors and consultants for up to a total of 7,000,000 shares of common stock. The exercise prices of the options granted are determined by the Plan Committee, whose members are appointed by the Board of Directors, and the exercise prices are generally to be established at the estimated fair value of the Company's common stock at the date of grant. Options granted have terms that do not exceed five years. As of September 30, 2013, stock options to purchase 650,000 shares of common stock are outstanding under the 2009 Plan.

On July 26, 2012, the Company’s shareholders approved the 2012 Stock Option Plan (the “2012 Plan”). Under the Plan, the Company may grant stock options, restricted and other equity awarded to any employee, consultant, independent contractor, director or officer of the Company for up to a total of 11,500,000 shares of common stock. As of September 30, 2013, stock options to purchase 2,266,190 shares of common stock are outstanding under the 2012 Plan.

In April 2013, the Company’s Board of Directors reduced the number of common shares reserved under the 2012 Stock Option Plan from 11,500,000 shares to 4,500,000 and reduced the number of common shares reserved under the 2009 Stock Option Plan from 7,000,000 shares to 650,000 shares thereby increasing the number of common shares available for issuance by 13,350,000.

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton valuation model. Expected volatility is based upon weighted average of historical volatility over the expected term of the option and implied volatility. The expected term of stock options is based upon historical exercise behavior and expected exercised behavior. The risk-free interest rate is based upon implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The dividend yield is assumed to be none as the Company does not anticipate paying any dividends in the foreseeable future.

The following is a summary of stock option activity for the nine months ended September 30, 2013:

					Weighted
			Weighted		Average
	Shares		average		Remaining		Aggregate
	under		exercise		contractual		intrinsic
Options	Option		price		Life		value
Outstanding at January 1, 2013		2,916,190	$	0.11
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding at September 30, 2013		2,916,190	$	0.11	2.26		75,796
Vested or Expected to Vest at September 30, 2013		2,150,000	$	0.14		2.44		26,250
Exercisable at September 30, 2013		2,150,000	$	0.14		2.44		26,250

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company’s common stock on September 30, 2013, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on September 30, 2013.

As a result of the reorganization described in Note 1, the Company has not recognized any stock-based compensation cost previously recorded on the books of AMHC prior to the date of reorganization.  No stock-based compensation was recognized during the three and nine months ended September 30, 2013 or during the three and nine months ended September 30, 2012. As of September 30, 2013, the Company does not expect outstanding options to acquire 766,190 shares of common stock will vest due to the performance criteria outlined in the option agreement. Compensation cost is revised if subsequent information indicates that the actual number of options vested is likely to differ from previous estimates.

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The following table summarizes the activity and value of non-vested options as of and for the nine months ended September 30, 2013:

			Weighted
	Number		Average
	Of		grant date
	Options		fair value
Non-vested options at January 1, 2013		766,190	$	0.06
Granted		-		-
Vested		-		-
Forfeited/cancelled		-		-
Non-vested options at September 30, 2013		766,190	$	0.06

As of September 30, 2013, there was $42,159 of total unrecognized compensation cost related to non-vested share based compensation arrangements granted under the qualified stock option plans. That cost is expected to be recognized over a weighted average period of 1.0 years if certain performance criteria are met.

Warrants:

Summarized information about warrants outstanding and exercisable at September 30, 2013 is as follows:

						Weighted
				Weighted		Average
				average		Remaining		Aggregate
				exercise		contractual		intrinsic
Warrants	Shares			Price		Life		value
Outstanding at January 1, 2013		6,739,528		$	0.05
Issued for Services		150,000		$	0.10
Exercised		-		$	-
Forfeited/Cancelled		(3,564,764	)	$	0.04
Outstanding at September 30, 2013		3,324,764		$	0.07	$	1.89	$	0
Vested or Expected to Vest at September 30, 2013		260,000		$	0.11	$	2.53	$	0
Exercisable at September 30, 2013		260,000		$	0.11	$	2.53	$	0

In April 2012, the Company granted a warrant to a sales consultant and director of the Company to purchase up to 6,129,528 shares of common stock in connection with a two-year service agreement.  This warrant has a three-year term and an exercise price of $0.0326 per share with 3,064,764 shares vesting each on January 1, 2013 and January 1, 2014 if the Company’s sales exceed certain thresholds in 2012 and 2013, respectively.  On January 1, 2013, the board of directors concluded the sales target for 2012 was not met and warrants to purchase 3,064,764 shares of Company common stock were cancelled. Management has evaluated the performance criteria and currently does not anticipate that the sales thresholds for 2013 will be met and accordingly no stock-based compensation has been recognized during the three and nine months ended September 30, 2013. Compensation cost is revised if subsequent information indicates that the actual number of warrants vested is likely to differ from previous estimates.

In February and March 2013, the Company granted a warrant to an investor relations firm to purchase up to 150,000 shares of common stock that vested immediately.  The warrants have a three-year term and an exercise price of $0.11 and $.09 per share, and $11,574 of stock based compensation related to this warrant and is recorded in general and administrative expenses during the nine months ended September 30, 2013.

Contributed Services

Prior to September 30, 2012, the Company’s owners/officers contributed management and administrative services to the Company.  The fair value of those services has been recorded as an expense in the accompanying consolidated financial statements based on the estimated fair value for such services, with a corresponding credit to contributed capital.  The fair value of the historical services was estimated based on the compensation per employment terms that were entered into in March 2012.  Contributed services were $0, $0, $0 and $50,000 for the three and nine months ended September 30, 2013 and 2012, respectively.

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NOTE 8 – INCOME TAXES

As discussed in Note 1, the Company entered into the Merger Agreement with HOJ, whereby on July 25, 2012, the Company acquired HOJ in a reverse triangular merger (the “Acquisition”). Because all of the operating businesses of AMHC were contemporaneously sold within five business days after the Acquisition, the transaction has been accounted for as a recapitalization of HOJ. Accordingly, the consolidated statement of operations includes the historical results of HOJ (a Colorado Corporation) and its predecessor entities, HOJ LLC (a limited liability company) and HOJ JV (a partnership).

Through March 5, 2012 (the date of incorporation of HOJ), no provision for income taxes has been provided in the accompanying combined financial statements because HOJ LLC and HOJ JV elected to file as partnerships, and therefore HOJ was not subject to income taxes, and, that such taxes are the responsibility of the individual member/partners.

Beginning March 5, 2012, HOJ began recording a provision for deferred income tax assets and liabilities in order to reflect the net tax effects of temporary differences between (i) the tax basis of assets and liabilities and (ii) their reported amounts in the financial statements. The provision is based upon enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income. The Company establishes a valuation allowance when necessary to reduce deferred income tax assets to the amounts expected to be realized.

On July 25, 2012, the Company acquired HOJ and began recording a provision for deferred income tax assets and liabilities for the combined companies. The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year.  The Company’s expected income tax benefit was approximately $575,000 for the nine months ended September 30, 2013.  The expected income tax benefit differs from the actual benefit of $0 each period, due primarily to the change in valuation allowance.

NOTE 9 – SUBSEQUENT EVENTS

On December 16, 2013, we announced signing of a distribution contract for the sale of hangover recovery shots in Japan. Over the next three years our product is to be distributed through up to 8,600 drug and food stores and sales are expected to reach over 10 million bottles. This is the largest distribution agreement yet internationally for the Company to date. We intend to start shipping containers to Japan in early 2014. The contract calls for one million bottles to be shipped in 2014, which would exceed all of our sales to date, followed by three million bottles in 2015, and six million in 2016.

On November 6, 2013, the Company reached an agreement with Fundable.com, an online portal, to raise up to $500,000 in 200,000 units sold at $2.50 per unit. Each unit consists of one share of Series D Preferred Stock and 100 five year warrants exercisable at $.05 per share upon a successful increase of the Company’s authorized common shares to 500,000,000. Terms of the preferred stock are as follows:

Series D Preferred Stock

Of the 10,000,000 shares of the Company’s authorized Preferred Stock, ($0.10 par value per share), 200,000 shares are designated as Series D Convertible Preferred Stock (the “Series D Preferred”).  The holders of outstanding shares of Series D Preferred are entitled to notice of any shareholders’ meeting and to vote as a single class with the common stock upon any matter submitted for approval by the holders of common stock, on an as-converted basis, as defined. Each share of Series D Preferred shall have one hundred votes per share. If any dividend or distribution is declared or paid by the Company on common stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series D Preferred will be entitled to participate with the holders of common stock in such dividend or distribution, as defined.

Additionally, upon liquidation, dissolution or winding up on the Company, the Series D Preferred shareholders are entitled to be paid together with the common shareholders on a pro-rata basis.  The Series D Preferred holders may convert such shares of Series D Preferred in whole or in part, at any time, or from time-to-time upon written notice to the Company subject to the terms set forth below. The Series D Preferred may, or shall, be converted into shares of the Company’s authorized but unissued common stock at the option of the holder, at any time after the Company is able to successfully increase its authorized common shares to 500,000,000 each share of Series D Preferred shall be convertible into one hundred shares of the Company’s common stock.  Additionally, The Company may automatically convert such shares six months after the increase in authorized shares.

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ITEM 2.   MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement about Forward-Looking Statements

This Form 10-Q contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “hopes,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, including projections under our licensing and distribution arrangements, the Company’s anticipated growth potential in its business, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified under “Risk Factors” in our Form 10-K for the year ended December 31, 2012.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.   

The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.

Background

Hangover Joe’s Holding Corporation (“HJHC” or the “Company”) was originally incorporated in the State of Colorado in December 2005 as Across American Real Estate Exchange, Inc. (“AAEX”).  In February 2010, Accredited Members, Inc. (“AMI”), a provider of investor research and management services, was merged with and into a wholly-owned subsidiary of AAEX, and AMI became a wholly-owned subsidiary of the Company.  In May 2010, AAEX changed its name to Accredited Members Holding Corporation.

On July 25, 2012, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Hangover Joe’s, Inc., a privately-held Colorado corporation (“HOJ”), whereby on July 25, 2012, the Company acquired HOJ in a reverse triangular merger (the “Acquisition”).  Upon closing the Acquisition, the Company issued 83,514,827 common shares to the HOJ shareholders in exchange for all of their ownership interests in HOJ such that the former owners of HOJ owned approximately 69% of the Company post Acquisition.  The shareholders of the Company prior to the Acquisition owned approximately 31% of the Company post Acquisition.  As a result of the Acquisition on July 25, 2012, the Company changed its name to Hangover Joe’s Holding Corporation.

The Merger Agreement further provided that, within five business days after the closing of the Acquisition the Company would sell to Accredited Members Acquisition Corporation (“Buyer”) all of the equity interests in three of the Company’s subsidiaries (the “Sale”), being Accredited Members, Inc., AMHC Managed Services, Inc. and World Wide Premium Packers, Inc. (collectively, the “Subsidiaries”).  Buyer is a privately-held Colorado corporation owned by two former directors of the Company, JW Roth and David Lavigne.  The parties closed the Sale on July 27, 2012.  Buyer paid $10,000 and assumed all liabilities of the Subsidiaries in exchange for all of the shares in the Subsidiaries owned by the Company.

HOJ is a Colorado corporation formed on March 5, 2012.  HOJ was formed for the purpose of acquiring all of the assets of both Hangover Joe’s Products LLC (“HOJ LLC”) and Hangover Joe’s Joint Venture (“HOJ JV”).  HOJ LLC had conducted operations through HOJ JV, with the owner of HOJ LLC being one of the same owners and control persons of HOJ JV. Effective March 30, 2012, HOJ acquired the net assets of HOJ LLC and HOJ JV through the issuance of common stock of HOJ.  Because HOJ had no significant assets or business operations prior to the merger and each of these entities were owned by the same control group, this transaction was accounted for as a reorganization of entities under common control.  Accordingly, the historical results of operations of HOJ LLC and HOJ JV are included in the results of operations of the Company.

Because all of the operating businesses of AMHC were contemporaneously sold within five business days after the Acquisition, the transaction has been accounted for as a recapitalization of HOJ.  Accordingly, the accompanying consolidated financial statements include the financial position, results of operations and cash flows of HOJ and its predecessor entities, HOJ LLC and HOJ JV, prior to the date of Acquisition. The historical results of operations and cash flows of AMHC and the Subsidiaries prior to the date of the Acquisition have been excluded from the accompanying consolidated financial statements. The historical stockholders’ equity of HOJ prior to the exchange was retroactively restated (a recapitalization) for the equivalent number of shares received in the exchange after giving effect to any differences in the par value of the AMHC and HOJ common stock, with an offset to additional paid-in capital.  The restated consolidated accumulated deficit of the accounting acquirer (HOJ) has been carried forward after the exchange.

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The term the “Company” as used herein is intended to refer to the Hangover Joes Holding Corporation and its wholly owned subsidiary, Hangover Joes Inc. The Company has a limited operating history and there will be limited continuing impact regarding these operations, and the Company cannot provide any assurance it will be able to raise funds through a future issuance of equity or debt to carry out its business plan.

Plan of Operation

The Company sells an all-natural, two-ounce beverage, formulated to help relieve the symptoms associated with alcohol induced hangovers – the Hangover Recovery Shot. The Hangover Recovery Shot is also an officially licensed product of The Hangover movie series from Warner Brothers.  The Company has registered the trademark “Hangover Joe’s Get Up & Go” with the U.S. Patent and Trademark office. The assets consist of intellectual property relating to Hangover Joe’s Recovery Shot, including but not limited to a license agreement dated July 19, 2011, between the LLC and Warner Bros. Consumer Products, Inc.  The license agreement permits HOJ to use the costumes, artwork logos, and other elements depicted in the 2009 movie “The Hangover” during the term of the license agreement, as amended, which expired January 31, 2016.  

The Company sells its products primarily to convenience stores, liquor stores and grocery stores through distribution agreements, as well as through online internet sales. The Company began selling its products in February 2011. HOJ is actively seeking to expand the distribution of its product, the Hangover Joe’s Recovery Shot, and has recently entered into distribution agreements to expand its reach to Australia, New Zealand and Canada.

Management Changes

Effective March 1, 2013, the Board of Directors appointed Eric Skae to serve as interim Chief Operating Officer (“COO”). Mr. Skae was to be paid an annual salary of $100,000 in the same manner as other officers of the Company. Mr. Skae resigned on August 6, 2013. The Company also appointed Jeff Jonke as its Executive Vice President and General Manager on August 19, 2013. Mr. Jonke resigned effective October 31, 2013. Effective December 1, 2013, the Board of Directors appointed Shawn Adamson to serve as Chief Sales and Marketing Officer. Mr. Adamson will be paid an annual salary of $100,000, a royalty of one cent per bottle, a 12.5% bonus of the proceeds of sale in the event the Company is sold plus benefits and stock. Also, Effective December 1, 2013, the Board of Directors appointed Matthew Veal to serve as Chief Financial Officer (“CFO”) and Interim Chief Executive Officer (“CEO”) and added Mr. Veal to the board of directors. Mr. Veal will be paid an annual salary of $180,000, a royalty of one cent per bottle, a 5% bonus of the proceeds of sale in the event the Company is sold plus benefits and stock. Also, Effective December 1, 2013, the Board of Directors reappointed Michael Jaynes to serve as Chairman of the Board. Mr. Jaynes will be paid an annual salary of $100,000, a royalty of one cent per bottle, a 12.5% bonus of the proceeds of sale in the event the Company is sold plus benefits and stock.

Results of Operations

Through the second Quarter of 2013, the Company’s operations have generally grown as the Company has expanded its marketing efforts.  Although the Company’s increased operations have resulted in greater net sales for the Company, the Company’s costs of goods sold and operating costs have also increased.  

Three Months Ended September 30, 2013 and September 30, 2012

For the three months ended September 30, 2013, we experienced a consolidated net loss of $400,000 compared to a consolidated net loss of $394,000 during the comparable period last year.  Net Sales and gross profits decreased $382,000 and $142,000 or 99% and 99%, respectively from the comparable period last year.  These decreases were offset by a $112,000 decrease in sales & marketing costs and a $75,000 decrease in general and administrative expenses from the comparable period last year.

Net Sales

During the three months ended September 30, 2013, the Company generated approximately $4,000 in net sales compared to $387,000 in net sales in the comparable period last year.  The $382,000 or 99% decrease in net sales from the comparable period last year was primarily due to the lack of resources not only for sales and marketing but production and shipping and due to the deferral of revenue on certain sales (approximately $14,000) to distributors in which the Company determined that collectibility was not assured. The Company has reviewed its sales channels, and a concern exists due to the lack of resources we can devote to the necessary sales and marketing and brand building to ensure product success.

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Cost of Goods Sold

Cost of goods sold, which includes product costs and product royalties, decreased in the aggregate from $241,000 for the three months ended September 30, 2012 as compared to $3,000 for the same period this year.  As a percentage of sales, cost of sales changed from 63% of sales for the quarter ended September 30, 2012 to 79% for the quarter ended September 30, 2013.  This change was primarily due to increased costs related to instability – including change in contract bottler, change in materials, old inventory being cleared in prior year,  initial fixed guaranteed royalty costs to Warner Brothers from our new marketing campaign (see net sales above) and financial challenges relating ability to negotiate lower costs.

Gross Profit

During the three months ended September 30, 2013, the Company realized a gross profit of $1,000 or 21% of net sales compared to a gross profit of $142,000 or 37% of net sales during the same period last year.  Although  average sales prices in 2013 were higher compared to the quarter ended September 30, 2012, lower product sales quantities, and higher product costs (described in cost of sales above) resulted in the overall decrease in gross profit in both dollar and percentage terms during the three months ended September 30, 2013.

Sales & Marketing Costs

Sales & marketing costs decreased $112,000 or 43% to $146,000 for the three months ended September 30, 2013 as compared to $258,000 for the comparable period last year.  This decrease was primarily due to a reduction in resources available for sales salaries and consulting expense, trade shows, and graphic design costs in this area.

General & Administrative Expenses

General and administrative expenses decreased $76,000 or 27% to $202,000 for the three months ended September 30, 2013 as compared to $278,000 for the same period last year.  The increase was due to several factors amortization of costs from our contract with the Bricktown Group, and higher investor relations costs during 2013 also contributed to the increase for the three months ended September 30, 2013 as compared to the three months ended September 30, 2012.

Nine Months Ended September 30, 2013 and September 30, 2012

For the nine months ended September 30, 2013, we experienced a consolidated net loss of $1,692,000 compared to a consolidated net loss of $943,000 during the comparable period last year.  Net Sales and gross profits each decreased $414,000 and $186,000 or 56% and 73%, respectively from the comparable period last year.  These decreases were slightly offset by a $34,000 decrease in general and administrative expenses from the comparable period last year.

Net Sales

During the nine months ended September 30, 2013, the Company generated approximately $322,000 in net sales compared to $736,000 in net sales in the comparable period last year.  The $414,000 or 56% decrease in net sales from the comparable period last year was primarily due to lower sales volume from new distribution partners in the United States related to the May 20 marketing campaign began from the movie Hangover III. The Company has reviewed its sales channels, and while we did incur drops in comparison to the second half of the prior year, we believe new channels can be opened to supplement what we have and replace some of the business we no longer have, but we believe additional marketing resources will be needed to build our customer base to its full potential.

Cost of Goods Sold

Cost of goods sold, which includes product costs, packaging materials, and product royalties, decreased in the aggregate from $480,000 for the nine months ended September 30, 2012 as compared to $252,000 for the same period this year.  As a percentage of sales, cost of sales increased from 65% of sales for the nine months ended September 30, 2012 to 78% for the nine months ended September 30, 2013.  This decrease was primarily due to higher costs, particularly royalty guaranteed amounts.

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Gross Profit

During the nine months ended September 30, 2013, the Company realized a gross profit of $70,000 or 22% of net sales compared to $256,000 or 35% of net sales during the same period last year.  Although  average sales prices in 2013 were substantially the same when compared to the nine months ended September 30, 2012, lower product sales quantities and higher product costs (described in cost of sales above) resulted in the overall decrease in gross profit in both dollar and percentage terms during the nine months ended September 30, 2013.

Sales & Marketing Costs

Sales & marketing costs decreased $34,000 or 6% for the nine months ended September 30, 2013 when the total was $573,000 as compared to $607,000 for the nine months ended September 30, 2012.  This increase was due to increases in advertising and sales consulting expenses.

General & Administrative Expenses

General and administrative expenses increased $306,000 or 52% to $898,000 for the nine months ended September 30, 2013 as compared to $592,000 for the same period last year.  The increase was due to several factors including higher  accounting and ancillary costs associated with becoming a public entity such as $30,000 spent on public relations/awareness, amortization of approximately $278,000 of costs from our contract with the Bricktown Group, higher legal costs associated with negotiating financing transactions and licensing, higher salaries, and higher investor relations costs during 2013 also contributed to the increase for the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012.

Material Changes in Financial Condition; Liquidity and Capital Resources

The Company’s consolidated financial statements for the three months ended September 30, 2013, have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Report of our Independent Registered Public Accounting Firm on the Company’s consolidated financial statements as of and for the year ended December 31, 2012, includes a “going concern” explanatory paragraph which means that the auditors stated that conditions exist that raise doubt about the Company’s ability to continue as a going concern.

Cash Flows

During the nine months ended September 30, 2013, we used proceeds from the borrowing of approximately $492,000 under our new credit facilities to fund our operations whereas during the comparable period in 2012, we used cash accumulated from prior periods to fund our operations.  As described above, the company significantly increased its sales and marketing costs during 2012 to expand its distribution network in the United States, Canada, and Australia.  Cash as of September 30, 2013 was $10,000 as compared to $9,000 at December 31, 2012.

Cash flows used in operating activities for the nine months ended September 30, 2013 was $576,000 as compared to $670,000 for the comparable period last year. This decrease in cash used in operations was primarily due to higher operating expenses during 2013 as compared to the same period last year, and was offset by increases in accounts payable.

Cash flow provided by financing activities for the nine months ended September 30, 2013 was $577,000 compared to $9,000 for the comparable period last year. This was due to the above referenced net borrowings under the credit facility in 2013 discussed above offset by amounts paid off on other inventory credit arrangement and cash raised from the sale of equity.

Capital Resources

As of September 30, 2013, we had cash of $10,000 and a working capital deficit of $2,151,000 as compared to cash of $9,000 and working capital deficit of $1,407,000 as of December 31, 2012. The improvement in our cash was due to our new credit facilities, however, due to our losses, our working capital deficit increased.

Although the Company has generated revenue through the sale of its products, the Company’s cash flow has not been sufficient to cover its operating expenses and the Company has had to rely upon proceeds from borrowings under its credit facilities and from the sale of common stock through private placements to fund its operations.  During the three months ended September 30, 2013, the Company received gross proceeds of $425,000 under its credit facility.   We anticipate that we will need to rely on sales of our securities in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will be able to complete any additional sales of our equity securities or that we will be able arrange for other financing to fund our planned business activities. If we are unable to fund future operations by way of financing, including public or private offerings of equity or debt securities, our business, financial condition and operating activities will be adversely impacted.

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Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, net sales or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.

Recently issued and adopted accounting pronouncements

In the third quarter of 2013, there was no new adopted or proposed accounting guidance that could have a material impact on the Company’s financial statements.

Critical Accounting Policies

There have been no changes to the Company’s critical accounting policies in the three months ended September 30, 2013, from those contained in the Company’s 2012 Annual Report on Form 10-K.

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

As discussed in Note 3 – Debt, the Company is in default for nonpayment of its revolving credit facility with TCA.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of September 30, 2013, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer and acting principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are not effective to timely alert management to material information required to be included in our periodic reports filed with the Securities and Exchange Commission  and to ensure that information required to be disclosed in such reports is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.  However, management believes that the financial statements included in this report present fairly, in all material respects, the Company’s consolidated financial position, results of operations and cash flows for the periods presented.  Due to our limited financial resources and limited personnel we are not able to immediately take any action to remediate the material weaknesses identified.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer/principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

No.

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PART II - OTHER INFORMATION

Item 1A. RISK FACTORS

There have been no material changes to the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

All sales of unregistered equity securities that occurred during the period covered by this report have been previously disclosed in our current report on Form10-K filed on April 16, 2013, our current reports on Form10-Q filed on May 20, 2013 and August 19, 2013 and other current reports on Form 8-K filed during the first quarter.

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS

Exhibit No.	Title
10.1	License Agreement between the Company and Warner Brothers Japan dated December 16, 2013 Filed herewith.
10.2	Employment agreement between company and Michael Jaynes, Chairman. Filed herewith.
10.3	Employment agreement between company and Matthew Veal, CFO and CEO.  Filed herewith.
10.4	Employment agreement between company and Shawn Adamson, Chief Sales and Marketing Officer. Filed herewith.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Matthew Veal, Chief Executive Officer).  Filed herewith.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Matthew Veal, Chief Financial Officer). Filed herewith.
32.1	Certification Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Matthew Veal, Chief Executive Officer).  Filed herewith.
32.2	Certification Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Matthew Veal, Chief Financial Officer). Filed herewith.
101.INS	XBRL Instance Document. Filed herewith.
101.SCH	XBRL Schema Document. Filed herewith.
101.CAL	XBRL Calculation Linkbase Document. Filed herewith.
101.DEF	XBRL Definition Linkbase Document. Filed herewith.
101.LAB	XBRL Labels Linkbase Document. Filed herewith.
101.PRE	XBRL Presentation Linkbase Document. Filed herewith.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

	HANGOVER JOE’S HOLDING CORPORATION
Date:  December 19, 2013	By:	/s/ Matthew Veal
		Interim Chief Executive Officer
Date:  December 19, 2013	By:	/s/ Matthew Veal
		Chief Financial Officer

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EX-10.1

Exhibit 10.1

DISTRIBUTION AGREEMENT

THIS AGREEMENT is entered into as of October, 1 2013, by and between Hangover Joes Products Inc., (“Supplier”) Media2u . Co. Ltd. (“Distributor”), as follows:

WITNESSETH

WHEREAS Supplier produces and/or markets quality beverage alcohol products; and

WHEREAS, Distributor desires to distribute Supplier's products in the Territory as set out below;

NOW, THEREFORE, for and in consideration of the mutual promises set forth below, the parties agree as follows:

ARTICLE 1

DEFINITIONS

For the purposes of this Agreement

1.1 "Effective Date" means October 1st 2013.

1.2 "Expiration Date" means October 15, 2018, as it is extended pursuant to Section 2.2 hereof, subject to earlier termination as provided in this Agreement.

1.3 ''Fiscal Year" means a year beginning January 1st and ending December 31st.

1.4 "Products" means, as of the Effective Date of this Agreement, the products listed on Exhibit A to this Agreement, as may be amended pursuant to this Agreement or by written agreement of the parties.

1.5 "Trademarks" means any and all registered or unregistered trademarks, service marks, logos, designs, commercial symbols, and trade dress which are approved by Supplier for use in connection with Products.

1.6 "Territory" means the country of Japan.

ARTICLE 2

APPOINTMENT

2.1 Appointment of Distributor: Supplier hereby appoints Distributor as the exclusive distributor of the Products in the Territory. All sales hereunder shall be on Supplier's standard conditions of sale then in effect, except as expressly provided otherwise in this Agreement. This appointment is pending approval from Warner Bros. in executing a third party licensing agreement for the Product and Territory with the Supplier and Distributor having the rights to manufacture and distribute the product in the Territory.

2.2 Term of Appointment:  The Term of this Agreement shall be five (5) years beginning on the Effective Date and expiring on the Expiration Date, unless earlier terminated pursuant to this Agreement; provided, however that the Tem1 shall automatically be extended for an additional five (5) years unless either party shall give the other party one (1) year prior written notice that the term shall not so extend.  For the purposes of this Agreement, ''Term" shall include the initial five (5) years of this Agreement and all extensions thereof until this Agreement is terminated by written notice from one party to the other pursuant to this Section 2.2 or earlier termination pursuant to this Agreement.

2.3 Additional Territory:

2.3.1  Additional countries will be approved country by country by the Supplier pending approval from Warner Bros.

ARTICLE 3

SALES OF PRODUCT TO DISTRIBUTOR

3.1  Product Quantities: During the term of this Agreement, Supplier will sell to Distributor and Distributor will buy from Supplier all of Products in such quantities as are necessary to fill Distributors requirements to meet the demand therefor in the Territory. Supplier acknowledges that in the normal course of business an ''adequate inventory" by brand of Products as determined and communicated by Distn1mtor is to be maintained to properly service retail outlets in the Territory.

3.2 Product Pricing: Prices for Products charged by Distributor to its customers are in the sole discretion and unilateral judgment of Distributor. However, Supplier shall have the right to suggest and recommend resale prices.

3.3 Purchase Quantities: Distributor agrees to purchase from Supplier a minimum of 1,008,000 bottles during the first year of the contract, 3,024,000 bottles during the second year: of the contract and over 6,000,000 bottles during the third of the contract and thereafter in following years. If the distributor does not meet the minimum case purchases, the supplier may terminate the agreement for cause.

ARTICLE 4

AGREEMENTS AND COVENANTS OF SUPPLIER

4.1  New Products or Brands: Supplier agrees show new brands to the distributor from time to time for possible inclusion of this distribution agreement.

ARTICLE 5

DISTRIBUTOR'S DUTIES

5.1  Distribution Efforts: Distributor will be responsible for distribution of all Products in the Territory.

5.2  Distributor Reports: Sales and inventory records showing Distributor's Sales and closing inventory of Products for the preceding month shall be made available to Supplier not later than the tenth (10th) working day of the month following the reporting period. In addition, when Supplier requests, Distributor shall make available ill a timely manner reasonable marketing information, such as distribution surveys, key account information and sales figures, account so1d reports, and similar information relating to field activities in order for Supplier to be fully informed of sales and depletions of Products in the Territory. Supplier may, upon reasonable notice take a physical inventory of Products stored in Distributors warehouses.

5.3  Additional Duties: Distributor hereby agrees with Supplier that, in the performance of this Agreement, it will:

5.3.1 own sufficient inventory of Products to meet expected demand, which may vary by Product;

5.3.2  handle Products carefully, to prevent damage or deterioration;

5.3.3 not alter, obscure or remove any markings or other indication of source or origin which Supplier may place on Products;

5.3.4 not take any action which might reduce or impair the value or goodwill associated with Products or their related Trademarks or copyrights;

5.3.5  notify Supplier of any infringement of any Trademark or copyrights and, at the request of Supplier, provide reasonable assistance in defending against such infringement at Supplier's expense;

5.3.6  notify Supplier of any complaints from consumers related to Products; and

5.3.7 allow Supplier's market managers to work alongside Distributor's salesmen, promoters, merchandisers, and representatives, and share customer and sales information with Supplier.

ARTICLE 6

PRICES

6.1 Generally: Supplier shall sell and Distributor shall buy Products at prices currently in effect in the Territory at the time of shipment. Supplier may, however, in good faith, change its prices, in its sole discretion, from time to time on 90 days' notice unless state law requires longer notice, except any price change brought about by changes in taxation may be accomplished without such notice.

6.2 Payment Terms: All invoices for Products shall be due and payable in advance of shipment unless other payment terms are established and approved by Distributor. In addition to any rights now or hereafter granted under applicable law or any other agreement between the parties, and not by way of limitation of such rights.

ARTICLE 7

TERMINATION

7.1 By Either Party: Either party may terminate this Agreement for the following reasons upon 60 days' notice:

7.1.1 the appointment of a trustee, receiver or other similar custodian for all or any part of the other party's property;

7.1.2  insolvency of the other party;

7.1.3  the filing of a petition by the other party or an answer, not denying jurisdiction, in bankruptcy or under Chapter X or XI of the Federal Bankruptcy Act or similar law, state or federal, whether now or later existing, or if such a petition is filed against the other party and not vacated or stayed within 30 days;

7.1.4  the making by the other party of an assignment for the benefit of creditors;

7.1.5 an attachment of a material portion of the other party's property or the filing of any similar process against it which is not discharged within 30 days;

7.1.6  the loss by the other party of any federal, state, or local license required for the performance of this Agreement, whether lost through revocation, failure to renew, or suspension of more than 60 days which has a material adverse effect on Distributor 's ability to perform its obligations under this agreement;

7.1.7  the enactment of a law making the sale of Products illegal in the Territory; or

7.1.8  the failure by either party to materially satisfy any of the material terms or conditions of this Agreement and such failure continues unabated for sixty (60) days after receipt of a written notice detailing the material term or terms not complied with.

7.1.9 failure to meet minimum purchase requirements.

7.2 Post-termination Obligations: If the agreement is terminated, the distributor is required to return all artwork, marketing material and discontinue companies use of brand and trademarks on all websites and social media outlets of all kinds.

7.3 Reversion of Rights: Upon termination or expiration of this Agreement, all IP Rights shall immediately revert to Supplier who shall be free to license others to use such rights. Distributor shall then refrain from further use of the IP Rights or any further reference to them, either directly or indirectly.

ARTICLE 8

INTELLECTUAL PROPERTY

8.1 Permitted Use: Supplier hereby grants Distributor a non-exclusive, royalty-free, non-assignable right, without the right to grant such right to others, to use the Hangover Joes Trademarks solely in connection with Distributor's sales of Products and for no other purpose. The Hangover Movie Trademarks are property of Warner Bros and can only be used by Distributor and Supplier if the proper licensing agreement is put in p]ace with Warner Bros and Supplier and Distributor. Distributor shall not use any of the Trademarks, or any portion thereof, as part of a trade name, fictitious business name, or name of a partnership or corporation without Supplier's prior permission. Distributor shall not produce or authorize the production of any promotional merchandise or point of sale/purchase materials bearing the Trademarks, such rights being reserved solely to Supplier, unless otherwise permitted by Supplier.

8.2  Modifications of the Trademarks: Distributor acknowledges that from time to time and without notice to Distributor, it may be necessary or desirable for Supplier to modify certain elements of the Trademarks used in connection with

Products, to add elements to the Trademarks, or to discontinue use of some or all of their elements. Accordingly, Supplier does not represent or warrant that the Trademarks or any of their elements will be maintained or used in any particular fashion.

8.3 Exclusive Property of Supplier. With respect to the Trademarks, and any other intellectual/industrial property rights which Distributor may be permitted to use (collectively the "IP Rights") including all rights therein and the good will pertaining thereto. Distributor acknowledges and agrees as follows:          ·

8.3.1 This Agreement shall in no way be construed as an assignment to Distributor of any right, title and/or interest in and to the IP Rights. Distributor shall not acquire property rights or any proprietary interest therein without Supplier's prior written consent;

8.3.2 All goodwill arising out of the use of the Trademarks in the Territory shall inure to the sole benefit of Supplier, or the respective owner of the Trademark in question;

8.3.3 The IP Rights are the exclusive property of Supplier (or their respective owner) and the Trademarks have acquired secondary meaning;

8.3.4 Distributor shall not challenge , attack or contest the ownership or validity of Supplier's (or the applicable owner's) rights in the IP Rights or their· respective applications or registrations;

8.3.5 Distributor shall not apply for, or be the assignee of, any industrial property protection which would affect any of the ownership rights in the IP Rights, or file any document with any governmental authority, or take any other action which could affect the ownership of the IP Rights, or aid or abet anyone else in doing so and

8.3.6 Distributor shall not commit any act or engage in any conduct which adversely affects the IP Rights which Distributor is permitted to use, regardless of any submission of ideas or related input by Distributor or its customers.

8.4 Infringement: Distributor shall use commercially reasonable efforts in detecting possible infringements of Supplier's IP Rights and shall inform Supplier of any known infringement Distributor agrees to assist Supplier, at Supplier's expense, to the extent necessary to help Supplier protect its rights in the IP Rights. In the event a third party infringes or threatens to infringe the IP Rights, or asserts that such properties infringe upon such third party's rights, Supplier shall have the sole right to take such action as it believes is necessary. All costs and expenses. including attorneys' fees, incurred in connection any action shall be paid by

Supplier and Supplier shall be entitled to receive and retain all amounts awarded, as damages, profits or otherwise in connection with such suits.

ARTICLE 9

REPRESENTATIONS, WARRANTIES, AND INDEMNIFICATION

9.1 Distributor Warranties: Distributor represents and warrants as follows:

9.1.1 Distributor shall comply with all laws, regulations and policies having the force of law in the Territory applicable to the conduct of Distributor's business pursuant to this Agreement.

9.1.2 Distributor shall not do (or allow to be done) any act or thing which in any way may impair the owner's rights in or to the Trademarks-in particular, Distributor will not represent that it has any right of ownership or title to the Trademarks.

9.2 Supplier's Warranties: Supplier represents and warrants as follows:

9.2.1 Supplier shall maintain in full force and effect general liability insurance with product-completed operations liability coverage in connection with the purchase and resale of product s by Distributor, Distributor 's designees and customers, in an amount of not less than one million dollars ($1,000,000) for a single occurrence. Such insurance will list Distributor as an additional named insured and shall also contain a· broad form vendor's endorsement, further providing that Distributor shall be notified in writing of any cancellation, expiration or non-renewal not less than thirty (30) days in advance by the insurer. Supplier shall cause the insurer, on an annual basis, to send Distributor certificates confirming such coverage.

9.2.2 Supplier shall comply with all laws, regulations and policies having the force of law in the Territory applicable to the conduct of Supplier's business pursuant to this Agreement.

9.2.3 The Products are fit for human consumption and comply with all applicable laws and regulations, including, without limitation, laws and regulations applicable to, or promulgated by, the United States Food and Drug Administration. The Products provided to Distributor hereunder, including without limitation, the containers and labels for such Products, are of a merchantable quality, fit for their intended purpose and meet all applicable government standards in the Territory .

9.2.4 Supplier shall ensure that all shipments of the Products to Distributor are prepared jn a manner suitable for transportation o Distributor and in accordance with good industry practice.

9.3 Cross-indemnification:

9.3.1 By Supplier: Supplier agrees to indemnify, defend, and hold Distributor and each of its direct and indirect parents, members; shareholders, subsidiaries, agents, employees and affiliates (collectively, ''Distributor Affiliates") harmless from any claim, suit, loss, damage, liability, or expense (including, without limitation, court costs and reasonable fees of counsel and other experts) (collectively "Losses") arising from or alleged by any third party to have arisen from:

(a) any allegations asserted or demanded by third parties related to defects in the design, manufacture, production , labeling, or packaging of the Products;

(b) any allegations asserted or demanded by third parties that the Trademarks infringe a third party's intellectual property right;

(c) any negligent or intentional act or omission by Supplier; or

(d) any failure by Supplier to perform any other responsibility expressly assigned to it by this Agreement. or any other breach of Supplier hereunder .

9.3.2 By Distributor:   Distributor agrees to indemnify, defend, and hold Supplier and its shareholders, officers, directors. affiliates, agents, and employees (collectively, ''Supplier Affi1iates'7) harmless from any tosses arising from or alleged by any third party to have arisen from:

(a) any negligent or intentional act or omission by Distributor: or

(b) any failure by Distributor to perform any responsibility expressly assigned to it by this Agreement , or any other breach of Distributor hereunder.

9.3.3  Notice of Claims: Each party agrees to give prompt written notice to the other of the occurrence of any event or the assertion of any claim by a third party which might give rise to a claim under this Section.

9.4  Supplier and Distributor Representations and Warranties.

9.4.1 Each of Supplier and Distributor hereby represent and warrant to each other that (i) such party has full power and all corporate and other authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and (ii) the execution and delivery of this Agreement, and the performance of their respective obligations hereunder, will not violate, conflict with, or result in the breach of. any terms of any currently effective agreement to which such party is or was a party, or by which such party js or was otherwise bound, including in the case of Supplier, any other distribution agreements, whether written or oral, for the distribution of the Products in the Territory.

9.4.2 The parties each acknowledge that the other party is entering into this Agreement in reliance on, among other things, the representations and warranties contained in this Article 9.

ARTICLE 10

CONFIDENTIALITY

10.1  Confidential Information:

10.1.1  the obligation of each party to protect Confidential Information (as defined below)

10.1.2 of the other party shall survive the termination of this Agreement for one (1) year following the effective date of termination. Each party shall keep confidential and not disclose or reveal any Confidential Information provided to it during the course of fulfilling its obligations under this Agreement other than to those of its Representatives who need to know such information for the purposes of this Agreement and whom such party will cause to observe the terms of this Agreement and be liable for any breaches by such Representatives. "Confidential Information'' includes, but is not limited to, all information designated (in writing or orally) as ''confidential'' or "Proprietary" by the disclosing party. A party may not disclose or reveal Confidential Information provided to it by the other party except (i) as expressly required by law; provided such party shall give the other party prompt advance written notice thereof such that the other party has the opportunity to oppose such request, seek a protective order or other appropriate remedy to protect its interest in the Confidential Information; (ii) as necessary to enforce the terms of this Agreement; (iii) as necessary to advise the parties ' respective legal, accounting, and financial advisors; or (iv) with the express written consent of the other party. Confidential Information does not include information which: (i) was in the public domain or comes into the public domain other than as a result of a breach of an obligation of confidentiality; (ii) was lawfully obtained by a third party that was not under any obligation of confidentiality; or (iii) was independently developed by such party without making use of any such Confidential information.  For purposes of this Paragraph,

"Representatives" means with respect to each party, such party's officers, directors, employees, agent, attorneys and advisors .

10.1.2 The parties agree that all terms and conditions of this Agreement, all information and data of either party, whether in written , oral or electronic format, disclosed directly or indirectly , after the date this Agreement, whether or not having independent material economic value, including, but not limited to, financial information and data, marketing data or information, pricing information or strategies, trade secrets, business strategies and confidential business information that otherwise does not qualify as trade secrets, and any other information concerning either party's actual or anticipated business, research and development, as well as any modifications or enhancements of any of the foregoing, will be considered Confidential Information .

ARTICLE 11

MISCELLANEOUS

11.1 Governing Law:

11.1.1 This Agreement shall be construed and governed according to laws the State of Colorado, United States of America.

11.1.2 Anything in this Agreement to the contrary notwithstanding this Agreement can only be terminated pursuant to the provisions of the laws, rules and regulations of the The United States of America. To the extent that this Agreement or the terms and conditions contained herein is in contradiction with the laws, rules and regulations of such state governing the sale of beverage alcohol products to Distributor, then the terms of this Agreement are deemed modified to conform to all said laws, rules and regulations of such state.

11.2 Arbitration: If the parties disagree as to any matter arising out of or relating to this Agreement or the transactions contemplated by this Agreement. the parties will promptly consult with one another in an effort to resolve the disagreement. If such effort is unsuccessful, any controversy or claim arising out of or relating to this Agreement, or the breach of this Agreement, will be settled exclusively by arbitration in the city where Distributor 's principal place of business is within the state where the Territory is located in accordance with the Commercial Arbitration Rules of the American Arbitration Association (subject to the provisions stated below). Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The arbitrator(s) will have the power to render equitable, as we11 as other awards and relief.

11.3 Counsel Fees: In an arbitration arising hereunder, each party shall bear its own costs and fees. In any litigation arising hereunder to compel or enforce arbitration, the prevailing party shall be entitled to recover its court costs and reasonable attorney's fees from the other party.

11.4  Force Majeure; Neither party sha11 be liable for failure to perform any obligation of this Agreement which may arise as a result of strikes, trade disputes, dec1ared wars, fires, floods, or other matters constituting force majeure.

11.5  Non-waiver: Any failure by any party to enforce at any time or for any period of time any term or condition of this Agreement shall not be deemed a waiver of such term or condition.

11.6 Assignment: Supplier may, with Distributor's prior written consent, assign its rights or delegate its duties under this Agreement to any person, firm, association, or corporation if such transferee shall agree in writing to assume all Supplier's duties in this Agreement. Upon such assignment and assumption, Supplier shall be under no further obligation under this Agreement, except for any accrued liabilities. Distributor may assign its rights or delegate its duties under this Agreement

11.7 Relationship between parties: This Agreement creates only a supplier· distributor relationship between Supplier and Distributor. Distributor shall not be deemed to be Supplier's agent, employee, partner, or joint venture partner based on this Agreement's terms. Distributor is prohibited from representing itself as Supplier's agent or as able to bind Supplier in any way.

11.8 Entire Agreement: Amendment: This Agreement represents the parties' entire understanding with respect to its subject matter and supersedes and cancels all prior written or oral contracts, agreements and understandings of the parties with respect to it. This Agreement can be amended only in writing, and then only if the amendment is executed by both parties.               ·

11.9 Headings: The use of titles and headings with reference to certain portions of this Agreement are solely for the convenience of the reader and are of no legal effect.

11.10 Notices: All notices, claims, requests , demands and other communications hereunder will be in writing and will be deemed given if delivered by hand, if mailed (by registered or certified mail, return receipt requested and postage prepaid), if sent by reputable overnight courier service for next business day delivery, or if sent by facsimile transmission , as follows:

if to Distributor:	Media2u Co., Ltd . ACE High-End Tower 9th Rm. 8 102 233, Gasandigital 1-ro, Geumcheon-gu, Seoul 153-803 KOREA Attention: James Choi / Geoffrey Kim
if to Supplier:	Hangover Joes Products 9457 S. University Blvd #349 Highland Ranch, CO 80126-4976 Attention: Michael Malm

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith . Any such communication will be effective (a) if given by facsimile transmission, when transmitted to the applicable number specified in (or pursuant to) this Section and an appropriate mechanical or voice confirmation is received. (b) if given by United States mail , on the earlier of the date of receipt or the fifth day after deposit in the mails, or (c) if given by any other means, on the date of receipt.

11.11 Survival: The terms of this Agreement which are expressly or by implication to continue in force notwithstanding its termination or expiration (from whatever reason). will so continue in force.

11.12 Counterparts: This Agreement may be signed by each party upon a separate copy or separate signature page, and any combination of separate copies signed by all parties or including signature pages so signed will constitute a single counterpart of this Agreement. This Agreement may be signed in any number of counterparts; each of which will be deemed to be an original. but all of which together will constitute one and the same agreement  It will not be necessary, in proving this Agreement in any proceeding , to produce or account for more than one counterpart of this Agreement. This Agreement will become effective when one or more counterparts have been signed by each party, and delivered to the other parties, respectively . Any party may deliver an executed copy of this Agreement (and an executed copy of any documents contemplated by this Agreement) by facsimile transmission to another party, and such delivery will have the same force and effect as any other delivery of a manually signed copy of this Agreement (or such other document).

[Signature Page Fo11ows]

IN  WITNESS WHEREOF, witness the hands of the parties on the dates set out below but effective as of the Effective Date.

HANGOVER JOES PRODUCTS INC.	MEDIA2U., LTD
/s/ Michael Malm	/s/ James Choi
Title:  VP	Title:  CEO
Date:  9/30/2013	Date:  10/03/2013

Exhibit A

Products

Hangover Joes Recovery Shot

Cost:$ 20.40 (.85 a bottle) a case with a minimum order of 6,000 cases (1 container) per order plus direct licensing fees to Warner Bros as per the terms of a the third party licensing agreement the Distributor and Supplier will be entering into with Warner Bros .

Freight is paid by Distributor.

EX-10.2

Exhibit 10.2

HANGOVER JOES HOLDING CORPORATION

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by and between Hangover Joes Holding Corporation, a Colorado corporation, (the “Company”), its successors and assigns, and Michael Jaynes (“Executive”) effective as of December 1, 2013 ("Start Date").

RECITAL

The Company desires to employ Executive, and Executive is willing to accept employment by the Company, in each case on the terms and subject to the conditions set forth in this Agreement.

The Company acknowledges that Executive has disclosed all material information about his business dealings in the past or present that may have a detrimental effect on its business and is comfortable with all matters thereto.

NOW, THEREFORE, the parties hereto hereby agree as follows:

AGREEMENT

1.   Position and Duties.

1.1  Position.   During the term of this Agreement, Executive agrees to be employed by and to serve the Company as Chairman of the Board of Directors (CHAIRMAN), to perform such duties consistent with such position as may be assigned to him from time to time by the Board of Directors.  Executive’s principal place of business with respect to his services to the Company shall be wherever necessary, provided that Executive agrees to undertake such travel as may be required in the performance of his duties.   All travel expenses of Executive shall be reimbursed in accordance with Section 3.4 (c) below.

1.2  Supervision and Direction. Executive shall carry out his duties under the general supervision and direction of the Board of Directors of the Company in accordance with the Company’s policies, rules and procedures in force from time to time.

1.3  Time Required.   Executive shall devote the necessary time, attention, skill and efforts to his tasks and duties hereunder to the affairs of the Company.  However, Executive shall be able to provide services for compensation to any other person or business entity during the Term of his employment by the Company, as defined in paragraph 2.1, and engage in any other business activity, whether or not such other business activity is pursued for profit or pecuniary advantage until such time as an arrangement can be worked out to ensure Executive the necessary income security and compensation for lost business. Executive shall take no action to intentionally injure Company related to outside employment, but shall not be prohibited from working in arrangements where a potential conflict exists between the Company and any of his other employers. In such a case, he shall notify the Company of any potential conflict and alternative arrangements, if any, shall be pursued.

2.   Term of Employment, Termination.

2.1  Term. The term of employment under this Agreement (the “Term”) shall begin on Start Date and shall continue through two calendar years after the Start Date (the “Expiration Date”), unless earlier terminated in accordance with Article 2 or extended pursuant to the following sentence.   Unless written notice is given by the Company or Executive to the other at least ninety days prior to the Expiration Date (or any later date to which the Term shall have been extended in accordance with this Section 2.1) advising that the one giving such notice does not desire to extend or does desire to further extend this Agreement, the Term shall automatically be extended for additional one-year periods without further action of either the Company or Executive.

2.2  Termination for Cause.Termination for Cause (as defined in Section 2.8(a) below) may be effected by the Company at any time during the Term of this Agreement and shall be effected by written notification to Executive from the Chairman of the Board of Directors or by action of a majority of the directors, in the event the Executive is the Chairman, stating the reason for termination.   Such termination shall be effective immediately upon the giving of such notice, unless the Board of Directors shall otherwise determine.   Upon Termination for Cause, Executive shall be paid all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation payand any appropriate business expenses incurred by Executive in connection with his duties hereunder prior to such termination, all to the date of termination, but Executive shall not be entitled to any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.3  Voluntary Termination.   In the event of a Voluntary Termination (as defined in Section 2.8(c) below), the Company shall pay to Executive all accrued salary, bonus compensation to the extent earned, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but no other compensation or reimbursement of any kind, including without limitation, severance compensation.  Executive may affect a Voluntary Termination by giving sixty (60) days’ written notice of such termination to the Company.

2.4  Termination by Death.   In the event of Executive’s death during the Term of this Agreement, Executive’s employment shall be deemed to have terminated as of the last day of the month during which his death occurs and the Company shall pay to his estate or such beneficiaries, as Executive may from time to time designate, all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but Executive’s estate shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.5  Termination by Reason of Disability.   If, during the Term of this Agreement, a physician selected by the Company certifies that Executive has become physically or mentally incapacitated or unable to perform his full-time duties under this Agreement, and that such incapacity has continued for a period of 180 calendar days within any period of 365 consecutive days, the Company shall have the right to terminate Executive’s employment hereunder by written notification to Executive, and such termination shall be effective on the seventh day following the giving of such notice (“Termination by Reason of Disability”).   In such event, the Company will pay to Executive all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay, any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, and all severance compensation required under Section 4.1,    In the event of a Termination by Reason of Disability, upon the termination of the disability, the Company will use its best efforts to reemploy Executive, provided that such reemployment need not be in the same capacity or at the same salary or benefits level as in effect prior to the Termination by Reason of Disability.

2.6  Executive’s Obligation Upon Termination.  Upon the Termination of Executive’s employment for any reason, Executive shall within ten days of such termination return to the Company all personal property and proprietary information in Executive’s possession belonging to the Company.   Unless and until the Executive has complied with this Section (which shall be determined by the Company's standard termination and check-out procedures), the Company shall have no obligation to make any payment of any kind to Executive hereunder.

2.7  Definitions.   For purposes of this Agreement the following terms shall have the following meanings:

(a)  “Termination for Cause” shall mean termination by the Company of Executive’s employment by the Company by reason of:

(i)  Executive’s willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, or breach of fiduciary duty to, the Company;

(ii)  Executive’s material breach of this Agreement, including any Exhibit hereto, or any other agreement to which Executive and the Company are parties;

(iii)  Executive’s use or possession of illegal drugs at any time, use of alcoholic beverages during working hours or on Company property except when specifically allowed by a company sponsored function, improper use of prescription drugs during working hours or on Company property or Executive reporting to work (which includes activities away from Company offices) under the influence of illegal drugs or alcohol;

(iv)  Conduct by Executive, whether or not in connection with the performance of the duties contemplated hereunder, that would result in serious prejudice to the interests of the Company if Executive were to continue to be employed, including, without limitation, the conviction of a felony or a good faith determination by the Board of Directors that Executive has committed acts involving moral turpitude;

(v)  Any material violation of any rule, regulation or policy of the Company by Executive or Executive’s failure to follow reasonable instructions or directions of the Board of Directors of the Company (as it relates to the Executive’s written job description) or any policy, rule or procedure of the Company in force from time to time.   All Company policies, rules, regulations and procedures currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company policies, rules and procedures must be provided to Executive in writing ten days prior to the changes becoming effective.

(b)  “Voluntary Termination” shall mean termination by Executive of Executive’s employment other than (i) Termination by Reason of Disability and (ii) Termination by reason of Executive’s Death.

3.   Salary, Benefits and Bonus Compensation.

3.1  Base Salary.   As payment for the services to be rendered by Executive as provided in Section 1 and subject to the terms and conditions of Section 2, the Company agrees to pay to Executive a “Base” Salary at an initial rate of $100,000 per annum payable in accordance with the Company’s regular payroll practices (twice monthly). The Base Salary shall be increased each year under the Agreement, for as long as it is in place by a minimum of 5% per annum and upon establishment of executive to full time status.  Such rate and Executive’s performance shall be reviewed by the Company’s Board of Directors on an annual basis, commencing Starting Date, for a determination of whether an adjustment in Executive’s Base Salary should be made, which adjustment shall be in sole discretion of the Company’s Board of Directors.

3.2  Partial Payments.  Until further notice, Executive agrees to defer his salary based on the company’s financial condition. Until appropriate level of funding is obtained, the Company and Executive may arrange for partial payments of the base salary, providing that the Executive may waive salary during the period prior to funding.   The remaining amount unpaid shall be accrued and owed to the Executive.   The Executive shall have the option to receive the accrued amount in cash or in common shares of the Company at the discounted rate of 50% per share .

3.3  Bonus:  Executive will be eligible for certain bonuses, for the attainment of certain goals. The Board of Directors will establish goals for the Company each year, which may include a target revenue goal, consummation of a merger with a candidate, asset base, etc.   Executive shall be entitled to a bonus of computed as a percentage of revenue over the goal established by the Board, or a specific dollar number and/or additional common stock of the Company for the attainment of other established goals.

3.4  Additional Benefits:  During the Term of this Agreement, Executive shall be entitled to the following fringe benefits:

(a)  Executive Benefits:  Executive shall be included in all group insurance plans and other benefit plans and programs made available to management Executives of the Company.

(b)  Vacation:  Executive is entitled to take two weeks paid vacation per year within six months from his Starting Date.

(c)    Reimbursement for Expenses:  The Company shall reimburse Executive for reasonable out-of-pocket, business, travel, and entertainment expenses incurred by Executive in connection with his duties under this Agreement in accordance with the Company’s reimbursement policy in effect from time to time.   To receive reimbursement, the Executive must submit a monthly, written expense report, attaching receipts thereto, listing all expenses to be reimbursed, the amount of each, the business purpose or benefit of the expense and such other information as may be required to satisfy the requirements of the Internal Revenue Code for deduction of such expenses by the Company.   Company’s reimbursement policy currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company’s policy must be provided to Executive in writing thirty (30) days prior to the changes becoming effective.

(d)  Automobile Allowance.  The Company shall pay to or for the benefit of Executive an automobile allowance when away from executive’s residence of Sarasota, FL, which may include a vehicle lease payments for an automobile selected by Executive and leased by the Company; provided, that in the event a cash payment is required for a leased vehicle, the cash payment shall be amortized over the lease term for purposes of the monthly automobile allowance provided herein.

(e)  Health Allowance.  The Company shall pay to or for the benefit of Executive full 100% health insurance upon achievement of full time status with the Company.

3.5. Stock Compensation. Company agrees to pay a bonus of 2.5% of outstanding shares as an employment bonus and each year thereafter a bonus to add an additional 2.5% by Dec. 1, 2014, and an additional 2.5% by Dec 1, 2015. All stock compensation shall be calculated on a fully diluted basis.

3.6. Bonus Upon Sale of Company. In the event of a sale of company Executive shall be entitled to 12.5% of gross proceeds from sale.

3.7 Royalty – Company agrees to grant a royalty of a penny per bottle to Executive for co-founding the brand and company into perpetuity.

4.   Severance Compensation.

4.1  Acceleration of Payments.   The Company will, if Executive so requests within thirty days following a Termination by Reason of Disability, elect to pay to Executive a lump sum severance payment by bank cashier’s check equal to the value of the cash payments that would otherwise be paid to Executive.

4.2.   No Severance Compensation Under Other Termination.   In the event of a Voluntary Termination, Termination for Cause, or Termination by reason of Executive’s Death, neither Executive nor his estate shall be paid any severance compensation.

5.   Other Agreements.   Executive agrees that to induce the Company to enter into this Agreement, he has concurrently executed and delivered to the Company all customary noncompetition and nondisclosure agreements it requires of its other executives during the term of this agreement.   Executive hereby covenants and agrees to fully abide by each and every term of such agreements, and agrees and understands that a breach or violation by Executive of any provision of any provision of either of such agreements shall constitute grounds for Termination for Cause under Section 2.8(a)(ii) of this Agreement, and that no such termination shall limit or affect any other rights and remedies of the Company arising out of or in connection with any such breach or violation.   The covenants on the part of Executive contained in such agreements shall survive termination of this Agreement, regardless of the reason for such termination, unless specifically excluded by this agreement.  Executive hereby represents and acknowledges that the Company is relying on the covenants contained in such agreements in entering into this Agreement, and that the terms and conditions of the covenants contained in such agreements are fair and reasonable.

6.   Miscellaneous.

6.1  Waiver.   The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.

6.2  Entire Agreement; Modifications.   This Agreement represents the entire understanding among the parties with respect to the subject matter hereof, and this Agreement supersedes any and all prior understandings, agreements, plans and negotiations, whether written or oral with respect to the subject matter hereof including without limitation, any understandings, agreements or obligations respecting any past or future compensation, bonuses, reimbursements or other payments to Executive from the Company.   All modifications to this Agreement must be in writing and signed by both parties hereto.

6.3  Notices.   All notices and other communications under this Agreement shall be in writing and shall be given by first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three (3) days after mailing to the respective persons named below:

If to the Company:

Hangover Joes Holding Corporation

9457 S. University #349

Highlands Ranch, CO 80126

Attn: Michael Jaynes,

Chairman

If to Executive:

Michael Jaynes

c/o

Any part may change such party’s address for notices by notice duly given pursuant to this Section

6.4  Headings.   The Section headings herein are intended for reference and shall not by themselves determine the construction or interpretation of this Agreement.

6.5  Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

6.6  Severability.   Should a court or other body of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, and all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.

6.7  Benefits of Agreement.   The provisions of this Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by the Company (except to an affiliate of the Company) or by Executive.

6.8  Counterparts.   This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.

6.9  Withholdings.   All compensation and benefits to Executive hereunder shall be subject to all applicable federal, state, local and other withholdings and similar taxes and other payments required by applicable law.

6.10  Remedies.   All rights and remedies of the Company and of the Executive hereunder shall be cumulative and the exercise of any right or remedy shall not preclude the exercise of another.

6.11  Interpretation Review.   Counsel in the negotiation and execution of this Agreement has represented both parties to this Agreement, and no inference shall be drawn against the drafting party.   Executive acknowledges that he has in fact reviewed and discussed this Agreement with his counsel and that he understands and assents to the terms hereof.

6.12  Arbitration.   Any controversy or claim arising out of or relating to this agreement, or breach thereof (other than any action by the Company seeking an injunction or equitable relief under the Executive Non-Disclosure Agreement and Proprietary Rights Assignment or the Non-Solicitation and Non-Competition Agreement executed by the Executive, as amended from time to time) shall be settled by binding arbitration to be held in Tampa, Florida, in accordance with the Rules of the American Arbitration Association, and judgment upon any proper award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  There shall be three arbitrators, one to be chosen directly by each party at will, and the third arbitrator to be selected by the two arbitrators so chosen.  To the extent permitted by the rules of the American Arbitration Association, the selected arbitrators may grant equitable relief.  Each party shall pay the fees of the arbitrator selected by him and his own attorneys, and the expenses of his witnesses and all other expenses connected with the presentation of his case.  The cost of the arbitration including the cost of the record of transcripts thereof, in any, administrative fees, and all other fees and cost shall be borne equally by the parties.   The rules of discovery of the Federal District Court for the ------- District of Colorado shall govern discovery conducted by the parties, who shall have the right to apply to said court for enforcement thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

	HANGOVER JOES HOLDING CORPORATION	EXECUTIVE
By:	/s/ Matthew A. Veal	/s/ Michael Jaynes
	CEO	Michael Jaynes

EXHIBIT "A"

EX-10.3

Exhibit 10.3

HANGOVER JOES HOLDING CORPORATION

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by and between Hangover Joes Holding Corporation, a Colorado corporation, (the “Company”), its successors and assigns, and Matthew A. Veal (“Executive”) effective as of December 1, 2013 ("Start Date").

RECITAL

The Company desires to employ Executive, and Executive is willing to accept employment by the Company, in each case on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, the parties hereto hereby agree as follows:

AGREEMENT

1.   Position and Duties.

1.1  Position.   During the term of this Agreement, Executive agrees to be employed by and to serve the Company as Chief Financial (CFO) and Interim Chief Executive Officer (CEO), to perform such duties consistent with such position as may be assigned to him from time to time by the Board of Directors.  Executive shall be appointed to the Company’s board of directors for a one year term as part of this agreement. Executive’s principal place of business with respect to his services to the Company shall be wherever necessary, provided that Executive agrees to undertake such travel as may be required in the performance of his duties.   All travel expenses of Executive shall be reimbursed in accordance with Section 3.4 (c) below.

1.2  Supervision and Direction. Executive shall carry out his duties under the general supervision and direction of the Board of Directors of the Company in accordance with the Company’s policies, rules and procedures in force from time to time.

1.3  Time Required.   Executive shall devote the necessary time, attention, skill and efforts to his tasks and duties hereunder to the affairs of the Company.  However, Executive shall be able to provide services for compensation to any other person or business entity during the Term of his employment by the Company, as defined in paragraph 2.1, and engage in any other business activity, whether or not such other business activity is pursued for profit or pecuniary advantage until such time as an arrangement can be worked out to ensure Executive the necessary income security and compensation for lost business. Executive shall take no action to intentionally injure Company related to outside employment, but shall not be prohibited from working in arrangements where a potential conflict exists between the Company and any of his other employers. In such a case, he shall notify the Company of any potential conflict and alternative arrangements, if any, shall be pursued.

2.   Term of Employment, Termination.

2.1  Term. The term of employment under this Agreement (the “Term”) shall begin on Start Date and shall continue through two calendar years after the Start Date (the “Expiration Date”), unless earlier terminated in accordance with Article 2 or extended pursuant to the following sentence.   Unless written notice is given by the Company or Executive to the other at least ninety days prior to the Expiration Date (or any later date to which the Term shall have been extended in accordance with this Section 2.1) advising that the one giving such notice does not desire to extend or does desire to further extend this Agreement, the Term shall automatically be extended for additional one-year periods without further action of either the Company or Executive.

2.2  Termination for Cause.Termination for Cause (as defined in Section 2.8(a) below) may be effected by the Company at any time during the Term of this Agreement and shall be effected by written notification to Executive from the Chairman of the Board of Directors or by action of a majority of the directors, in the event the Executive is the Chairman, stating the reason for termination.   Such termination shall be effective immediately upon the giving of such notice, unless the Board of Directors shall otherwise determine.   Upon Termination for Cause, Executive shall be paid all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation payand any appropriate business expenses incurred by Executive in connection with his duties hereunder prior to such termination, all to the date of termination, but Executive shall not be entitled to any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.3  Voluntary Termination.   In the event of a Voluntary Termination (as defined in Section 2.8(c) below), the Company shall pay to Executive all accrued salary, bonus compensation to the extent earned, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but no other compensation or reimbursement of any kind, including without limitation, severance compensation.  Executive may affect a Voluntary Termination by giving sixty (60) days’ written notice of such termination to the Company.

2.4  Termination by Death.   In the event of Executive’s death during the Term of this Agreement, Executive’s employment shall be deemed to have terminated as of the last day of the month during which his death occurs and the Company shall pay to his estate or such beneficiaries, as Executive may from time to time designate, all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but Executive’s estate shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.5  Termination by Reason of Disability.   If, during the Term of this Agreement, a physician selected by the Company certifies that Executive has become physically or mentally incapacitated or unable to perform his full-time duties under this Agreement, and that such incapacity has continued for a period of 180 calendar days within any period of 365 consecutive days, the Company shall have the right to terminate Executive’s employment hereunder by written notification to Executive, and such termination shall be effective on the seventh day following the giving of such notice (“Termination by Reason of Disability”).   In such event, the Company will pay to Executive all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay, any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, and all severance compensation required under Section 4.1,    In the event of a Termination by Reason of Disability, upon the termination of the disability, the Company will use its best efforts to reemploy Executive, provided that such reemployment need not be in the same capacity or at the same salary or benefits level as in effect prior to the Termination by Reason of Disability.

2.6  Executive’s Obligation Upon Termination.  Upon the Termination of Executive’s employment for any reason, Executive shall within ten days of such termination return to the Company all personal property and proprietary information in Executive’s possession belonging to the Company.   Unless and until the Executive has complied with this Section (which shall be determined by the Company's standard termination and check-out procedures), the Company shall have no obligation to make any payment of any kind to Executive hereunder.

2.7  Definitions.   For purposes of this Agreement the following terms shall have the following meanings:

(a)  “Termination for Cause” shall mean termination by the Company of Executive’s employment by the Company by reason of:

(i)  Executive’s willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, or breach of fiduciary duty to, the Company;

(ii)  Executive’s material breach of this Agreement, including any Exhibit hereto, or any other agreement to which Executive and the Company are parties;

(iii)  Executive’s use or possession of illegal drugs at any time, use of alcoholic beverages during working hours or on Company property except when specifically allowed by a company sponsored function, improper use of prescription drugs during working hours or on Company property or Executive reporting to work (which includes activities away from Company offices) under the influence of illegal drugs or alcohol;

(iv)  Conduct by Executive, whether or not in connection with the performance of the duties contemplated hereunder, that would result in serious prejudice to the interests of the Company if Executive were to continue to be employed, including, without limitation, the conviction of a felony or a good faith determination by the Board of Directors that Executive has committed acts involving moral turpitude;

(v)  Any material violation of any rule, regulation or policy of the Company by Executive or Executive’s failure to follow reasonable instructions or directions of the Board of Directors of the Company (as it relates to the Executive’s written job description) or any policy, rule or procedure of the Company in force from time to time.   All Company policies, rules, regulations and procedures currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company policies, rules and procedures must be provided to Executive in writing ten days prior to the changes becoming effective.

(b)  “Voluntary Termination” shall mean termination by Executive of Executive’s employment other than (i) Termination by Reason of Disability and (ii) Termination by reason of Executive’s Death.

3.   Salary, Benefits and Bonus Compensation.

3.1  Base Salary.   As payment for the services to be rendered by Executive as provided in Section 1 and subject to the terms and conditions of Section 2, the Company agrees to pay to Executive a “Base” Salary for CFO at an initial rate of $90,000 per annum payable in accordance with the Company’s regular payroll practices (twice monthly).  Company agrees to pay same amount, subject to deferral due to cash flow,  an additional $90,000 per annum for servce as interim CEO. The Base Salary shall be increased each year under the Agreement, for as long as it is in place by a minimum of 5% per annum and upon establishment of executive to full time status.  Such rate and Executive’s performance shall be reviewed by the Company’s Board of Directors on an annual basis, commencing Starting Date, for a determination of whether an adjustment in Executive’s Base Salary should be made, which adjustment shall be in sole discretion of the Company’s Board of Directors.

3.2  Partial Payments.   Until appropriate level of funding is obtained, the Company and Executive may arrange for partial payments of the base salary, providing that the Executive may waive salary during the period prior to funding.   The remaining amount unpaid shall be accrued and owed to the Executive.   The Executive shall have the option to receive the accrued amount in cash or in common shares of the Company at the discounted rate of 50% per share .

3.3  Bonus:  Executive will be eligible for certain bonuses, for the attainment of certain goals. The Board of Directors will establish goals for the Company each year, which may include a target revenue goal, consummation of a merger with a candidate, asset base, etc.   Executive shall be entitled to a bonus of computed as a percentage of revenue over the goal established by the Board, or a specific dollar number and/or additional common stock of the Company for the attainment of other established goals.

3.4  Additional Benefits:  During the Term of this Agreement, Executive shall be entitled to the following fringe benefits:

(a)  Executive Benefits:  Executive shall be included in all group insurance plans and other benefit plans and programs made available to management Executives of the Company.

(b)  Vacation:  Executive is entitled to take two weeks paid vacation per year within six months from his Starting Date.

(c)    Reimbursement for Expenses:  The Company shall reimburse Executive for reasonable out-of-pocket, business, travel, and entertainment expenses incurred by Executive in connection with his duties under this Agreement in accordance with the Company’s reimbursement policy in effect from time to time.   To receive reimbursement, the Executive must submit a monthly, written expense report, attaching receipts thereto, listing all expenses to be reimbursed, the amount of each, the business purpose or benefit of the expense and such other information as may be required to satisfy the requirements of the Internal Revenue Code for deduction of such expenses by the Company.   Company’s reimbursement policy currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company’s policy must be provided to Executive in writing thirty (30) days prior to the changes becoming effective.

(d)  Automobile Allowance.  The Company shall pay to or for the benefit of Executive an automobile allowance when away from executive’s residence of Sarasota, FL, which may include a vehicle lease payments for an automobile selected by Executive and leased by the Company; provided, that in the event a cash payment is required for a leased vehicle, the cash payment shall be amortized over the lease term for purposes of the monthly automobile allowance provided herein.

(e)  Health Allowance.  The Company shall pay to or for the benefit of Executive full 100% health insurance upon achievement of full time status with the Company.

(f) Settlement of prior wages owed. Company agrees to pay .4 of one percent of the company’s shares outstanding in settlement of prior wages owed as of the start date of the contract.

3.5. Stock Compensation. Company agrees to pay a bonus of .5% of outstanding shares as an employment bonus and each year thereafter a bonus to get to 3% by Dec. 1, 2014, 5% by Dec 1, 2015. All stock compensation shall be calculated on a fully diluted basis. Company agrees to grant an additional 2% per year of outstanding shares, on a prorated basis, for service as interim CEO.

3.6. Bonus Upon Sale of Company. In the event of a sale of company Executive shall be entitled to 5% of gross proceeds from sale. This amount shall be reduced to 2% in the event of termination for any reason.

3.7 Royalty – Company agrees to grant a royalty of a penny per bottle to Executive for service as interim CEO during the term of this agreement.

4.   Severance Compensation.

4.1  Acceleration of Payments.   The Company will, if Executive so requests within thirty days following a Termination by Reason of Disability, elect to pay to Executive a lump sum severance payment by bank cashier’s check equal to the value of the cash payments that would otherwise be paid to Executive.

4.2.   No Severance Compensation Under Other Termination.   In the event of a Voluntary Termination, Termination for Cause, or Termination by reason of Executive’s Death, neither Executive nor his estate shall be paid any severance compensation.

5.   Other Agreements.   Executive agrees that to induce the Company to enter into this Agreement, he has concurrently executed and delivered to the Company (a) a Confidentiality Agreement dated as of event date herewith, in the form of Exhibit A hereto.   Executive hereby covenants and agrees to fully abide by each and every term of such agreements, and agrees and understands that a breach or violation by Executive of any provision of any provision of either of such agreements shall constitute grounds for Termination for Cause under Section 2.8(a)(ii) of this Agreement, and that no such termination shall limit or affect any other rights and remedies of the Company arising out of or in connection with any such breach or violation.   The covenants on the part of Executive contained in such agreements shall survive termination of this Agreement, regardless of the reason for such termination, unless specifically excluded by this agreement.  Executive hereby represents and acknowledges that the Company is relying on the covenants contained in such agreements in entering into this Agreement, and that the terms and conditions of the covenants contained in such agreements are fair and reasonable.

Confidentiality: Each of the parties hereto (the “Recipient Party”) will from time to time receive certain trade secrets and confidential information ("Confidential Information") from each other and unaffiliated third parties (including prospective investor(s)) and their respective representatives, employees and agents (the "Disclosing Party").  The Recipient Party agrees not to use (except in connection with the performance of its duties hereunder) or disclose at any time (except to the Recipient Party's employees and agents who require the same for the purposes hereof and who are bound to the Recipient Party by like obligations as to confidentiality and use restrictions as contained in this Agreement) Confidential Information provided to it by the Disclosing Party or its agents and advisors.  Confidential Information shall include, without limitation, computer models and databases, lists of contacts and any other information identified in advance by the Disclosing Party as confidential. Confidential Information shall not include any information that (i) was in the public domain prior to disclosure, or (ii) is independently developed,  (iii) is received from a third party with no breach of a duty owed hereunder or (iv) otherwise known or acquired by the Recipient Party from prior experience or knowledge in the industry.  The Recipient Party agrees not to disclose or to use in a competitive manner Confidential Information for a period of the greater of two years following the termination of this Agreement or the term of any confidentiality agreement governing such Confidential Information.

Non-Compete: In addition, Consultant agrees not to work (or assist anyone else)  in selling,manufacturing, promoting  or distributing any energy drink products which competewith HJOE products relating to this subject, other than accounting work periodically performed by Consultant for New Leaf Brands, which has been determined to not be competitive with HJOE as of the signing of this agreement.  This Agreement may be modified only by a duly authorized party and executed in writing signed by the parties hereto.

6.   Miscellaneous.

6.1  Waiver.   The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.

6.2  Entire Agreement; Modifications.   This Agreement represents the entire understanding among the parties with respect to the subject matter hereof, and this Agreement supersedes any and all prior understandings, agreements, plans and negotiations, whether written or oral with respect to the subject matter hereof including without limitation, any understandings, agreements or obligations respecting any past or future compensation, bonuses, reimbursements or other payments to Executive from the Company.   All modifications to this Agreement must be in writing and signed by both parties hereto.

6.3  Notices.   All notices and other communications under this Agreement shall be in writing and shall be given by first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three (3) days after mailing to the respective persons named below:

If to the Company:

Hangover Joes Holding Corporation

9457 S. University #349

Highlands Ranch, CO 80126

Attn: Michael Jaynes,

Chairman

If to Executive:

Matthew A. Veal

7937 Broadmoor Pines Blvd.

Sarasota, FL 34243

Any part may change such party’s address for notices by notice duly given pursuant to this Section

6.4  Headings.   The Section headings herein are intended for reference and shall not by themselves determine the construction or interpretation of this Agreement.

6.5  Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

6.6  Severability.   Should a court or other body of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, and all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.

6.7  Benefits of Agreement.   The provisions of this Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by the Company (except to an affiliate of the Company) or by Executive.

6.8  Counterparts.   This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.

6.9  Withholdings.   All compensation and benefits to Executive hereunder shall be subject to all applicable federal, state, local and other withholdings and similar taxes and other payments required by applicable law.

6.10  Remedies.   All rights and remedies of the Company and of the Executive hereunder shall be cumulative and the exercise of any right or remedy shall not preclude the exercise of another.

6.11  Interpretation Review.   Counsel in the negotiation and execution of this Agreement has represented both parties to this Agreement, and no inference shall be drawn against the drafting party.   Executive acknowledges that he has in fact reviewed and discussed this Agreement with his counsel and that he understands and assents to the terms hereof.

6.12  Arbitration.   Any controversy or claim arising out of or relating to this agreement, or breach thereof (other than any action by the Company seeking an injunction or equitable relief under the Executive Non-Disclosure Agreement and Proprietary Rights Assignment or the Non-Solicitation and Non-Competition Agreement executed by the Executive, as amended from time to time) shall be settled by binding arbitration to be held in Tampa, Florida, in accordance with the Rules of the American Arbitration Association, and judgment upon any proper award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  There shall be three arbitrators, one to be chosen directly by each party at will, and the third arbitrator to be selected by the two arbitrators so chosen.  To the extent permitted by the rules of the American Arbitration Association, the selected arbitrators may grant equitable relief.  Each party shall pay the fees of the arbitrator selected by him and his own attorneys, and the expenses of his witnesses and all other expenses connected with the presentation of his case.  The cost of the arbitration including the cost of the record of transcripts thereof, in any, administrative fees, and all other fees and cost shall be borne equally by the parties.   The rules of discovery of the Federal District Court for the ------- District of Colorado shall govern discovery conducted by the parties, who shall have the right to apply to said court for enforcement thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

	HANGOVER JOES HOLDING CORPORATION	EXECUTIVE
By:	/s/ Michael Jaynes	/s/ Matthew A. Veal
	Chairman	Matthew A. Veal

EXHIBIT "A"

EX-10.4

Exhibit 10.4

HANGOVER JOES HOLDING CORPORATION

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by and between Hangover Joes Holding Corporation, a Colorado corporation, (the “Company”), its successors and assigns, and Shawn Adamson (“Executive”) effective as of December 1, 2013 ("Start Date").

RECITAL

The Company desires to employ Executive, and Executive is willing to accept employment by the Company, in each case on the terms and subject to the conditions set forth in this Agreement.

The Company acknowledges that Executive has disclosed all material information about his business dealings in the past or present that may have a detrimental effect on its business and is comfortable with all matters thereto.

NOW, THEREFORE, the parties hereto hereby agree as follows:

AGREEMENT

1.   Position and Duties.

1.1  Position.   During the term of this Agreement, Executive agrees to be employed by and to serve the Company as Chief Sales and Marketing Officer (CMO), to perform such duties consistent with such position as may be assigned to him from time to time by the Board of Directors.  Executive’s principal place of business with respect to his services to the Company shall be wherever necessary, provided that Executive agrees to undertake such travel as may be required in the performance of his duties.   All travel expenses of Executive shall be reimbursed in accordance with Section 3.4 (c) below.

1.2  Supervision and Direction. Executive shall carry out his duties under the general supervision and direction of the Board of Directors of the Company in accordance with the Company’s policies, rules and procedures in force from time to time.

1.3  Time Required.   Executive shall devote the necessary time, attention, skill and efforts to his tasks and duties hereunder to the affairs of the Company.  However, Executive shall be able to provide services for compensation to any other person or business entity during the Term of his employment by the Company, as defined in paragraph 2.1, and engage in any other business activity, whether or not such other business activity is pursued for profit or pecuniary advantage until such time as an arrangement can be worked out to ensure Executive the necessary income security and compensation for lost business. Executive shall take no action to intentionally injure Company related to outside employment, but shall not be prohibited from working in arrangements where a potential conflict exists between the Company and any of his other employers. In such a case, he shall notify the Company of any potential conflict and alternative arrangements, if any, shall be pursued.

2.   Term of Employment, Termination.

2.1  Term. The term of employment under this Agreement (the “Term”) shall begin on Start Date and shall continue through two calendar years after the Start Date (the “Expiration Date”), unless earlier terminated in accordance with Article 2 or extended pursuant to the following sentence.   Unless written notice is given by the Company or Executive to the other at least ninety days prior to the Expiration Date (or any later date to which the Term shall have been extended in accordance with this Section 2.1) advising that the one giving such notice does not desire to extend or does desire to further extend this Agreement, the Term shall automatically be extended for additional one-year periods without further action of either the Company or Executive.

2.2  Termination for Cause.Termination for Cause (as defined in Section 2.8(a) below) may be effected by the Company at any time during the Term of this Agreement and shall be effected by written notification to Executive from the Chairman of the Board of Directors or by action of a majority of the directors, in the event the Executive is the Chairman, stating the reason for termination.   Such termination shall be effective immediately upon the giving of such notice, unless the Board of Directors shall otherwise determine.   Upon Termination for Cause, Executive shall be paid all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation payand any appropriate business expenses incurred by Executive in connection with his duties hereunder prior to such termination, all to the date of termination, but Executive shall not be entitled to any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.3  Voluntary Termination.   In the event of a Voluntary Termination (as defined in Section 2.8(c) below), the Company shall pay to Executive all accrued salary, bonus compensation to the extent earned, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but no other compensation or reimbursement of any kind, including without limitation, severance compensation.  Executive may affect a Voluntary Termination by giving sixty (60) days’ written notice of such termination to the Company.

2.4  Termination by Death.   In the event of Executive’s death during the Term of this Agreement, Executive’s employment shall be deemed to have terminated as of the last day of the month during which his death occurs and the Company shall pay to his estate or such beneficiaries, as Executive may from time to time designate, all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, but Executive’s estate shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.

2.5  Termination by Reason of Disability.   If, during the Term of this Agreement, a physician selected by the Company certifies that Executive has become physically or mentally incapacitated or unable to perform his full-time duties under this Agreement, and that such incapacity has continued for a period of 180 calendar days within any period of 365 consecutive days, the Company shall have the right to terminate Executive’s employment hereunder by written notification to Executive, and such termination shall be effective on the seventh day following the giving of such notice (“Termination by Reason of Disability”).   In such event, the Company will pay to Executive all accrued salary, any benefits under any plans of the Company in which Executive is a participant to the full extent of Executive’s rights under such plans, accrued vacation pay, any appropriate business expenses incurred by Executive in connection with his duties hereunder, all to the date of termination, and all severance compensation required under Section 4.1,    In the event of a Termination by Reason of Disability, upon the termination of the disability, the Company will use its best efforts to reemploy Executive, provided that such reemployment need not be in the same capacity or at the same salary or benefits level as in effect prior to the Termination by Reason of Disability.

2.6  Executive’s Obligation Upon Termination.  Upon the Termination of Executive’s employment for any reason, Executive shall within ten days of such termination return to the Company all personal property and proprietary information in Executive’s possession belonging to the Company.   Unless and until the Executive has complied with this Section (which shall be determined by the Company's standard termination and check-out procedures), the Company shall have no obligation to make any payment of any kind to Executive hereunder.

2.7  Definitions.   For purposes of this Agreement the following terms shall have the following meanings:

(a)  “Termination for Cause” shall mean termination by the Company of Executive’s employment by the Company by reason of:

(i)  Executive’s willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, or breach of fiduciary duty to, the Company;

(ii)  Executive’s material breach of this Agreement, including any Exhibit hereto, or any other agreement to which Executive and the Company are parties;

(iii)  Executive’s use or possession of illegal drugs at any time, use of alcoholic beverages during working hours or on Company property except when specifically allowed by a company sponsored function, improper use of prescription drugs during working hours or on Company property or Executive reporting to work (which includes activities away from Company offices) under the influence of illegal drugs or alcohol;

(iv)  Conduct by Executive, whether or not in connection with the performance of the duties contemplated hereunder, that would result in serious prejudice to the interests of the Company if Executive were to continue to be employed, including, without limitation, the conviction of a felony or a good faith determination by the Board of Directors that Executive has committed acts involving moral turpitude;

(v)  Any material violation of any rule, regulation or policy of the Company by Executive or Executive’s failure to follow reasonable instructions or directions of the Board of Directors of the Company (as it relates to the Executive’s written job description) or any policy, rule or procedure of the Company in force from time to time.   All Company policies, rules, regulations and procedures currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company policies, rules and procedures must be provided to Executive in writing ten days prior to the changes becoming effective.

(b)  “Voluntary Termination” shall mean termination by Executive of Executive’s employment other than (i) Termination by Reason of Disability and (ii) Termination by reason of Executive’s Death.

3.   Salary, Benefits and Bonus Compensation.

3.1  Base Salary.   As payment for the services to be rendered by Executive as provided in Section 1 and subject to the terms and conditions of Section 2, the Company agrees to pay to Executive a “Base” Salary at an initial rate of $100,000 per annum payable in accordance with the Company’s regular payroll practices (twice monthly). The Base Salary shall be increased each year under the Agreement, for as long as it is in place by a minimum of 5% per annum and upon establishment of executive to full time status.  Such rate and Executive’s performance shall be reviewed by the Company’s Board of Directors on an annual basis, commencing Starting Date, for a determination of whether an adjustment in Executive’s Base Salary should be made, which adjustment shall be in sole discretion of the Company’s Board of Directors.

3.2  Partial Payments.   Until appropriate level of funding is obtained, the Company and Executive may arrange for partial payments of the base salary, providing that the Executive may waive salary during the period prior to funding.   The remaining amount unpaid shall be accrued and owed to the Executive.   The Executive shall have the option to receive the accrued amount in cash or in common shares of the Company at the discounted rate of 50% per share .

3.3  Bonus:  Executive will be eligible for certain bonuses, for the attainment of certain goals. The Board of Directors will establish goals for the Company each year, which may include a target revenue goal, consummation of a merger with a candidate, asset base, etc.   Executive shall be entitled to a bonus of computed as a percentage of revenue over the goal established by the Board, or a specific dollar number and/or additional common stock of the Company for the attainment of other established goals.

3.4  Additional Benefits:  During the Term of this Agreement, Executive shall be entitled to the following fringe benefits:

(a)  Executive Benefits:  Executive shall be included in all group insurance plans and other benefit plans and programs made available to management Executives of the Company.

(b)  Vacation:  Executive is entitled to take two weeks paid vacation per year within six months from his Starting Date.

(c)    Reimbursement for Expenses:  The Company shall reimburse Executive for reasonable out-of-pocket, business, travel, and entertainment expenses incurred by Executive in connection with his duties under this Agreement in accordance with the Company’s reimbursement policy in effect from time to time.   To receive reimbursement, the Executive must submit a monthly, written expense report, attaching receipts thereto, listing all expenses to be reimbursed, the amount of each, the business purpose or benefit of the expense and such other information as may be required to satisfy the requirements of the Internal Revenue Code for deduction of such expenses by the Company.   Company’s reimbursement policy currently in force must be provided to Executive in writing before execution of this Agreement.   Any changes to Company’s policy must be provided to Executive in writing thirty (30) days prior to the changes becoming effective.

(d)  Automobile Allowance.  The Company shall pay to or for the benefit of Executive an automobile allowance when away from executive’s residence of Sarasota, FL, which may include a vehicle lease payments for an automobile selected by Executive and leased by the Company; provided, that in the event a cash payment is required for a leased vehicle, the cash payment shall be amortized over the lease term for purposes of the monthly automobile allowance provided herein.

(e)  Health Allowance.  The Company shall pay to or for the benefit of Executive full 100% health insurance upon achievement of full time status with the Company.

(f) Settlement of prior wages owed. Company agrees to pay .4 of one percent of the company’s shares outstanding in settlement of prior wages owed as of the start date of the contract.

3.5. Stock Compensation. Company agrees to pay a bonus of 2.5% of outstanding shares as an employment bonus and each year thereafter a bonus to get to 22.5% by Dec. 1, 2014, 25% by Dec 1, 2015. All stock compensation shall be calculated on a fully diluted basis.

3.6. Bonus Upon Sale of Company. In the event of a sale of company Executive shall be entitled to 12.5% of gross proceeds from sale.

3.7 Royalty – Company agrees to grant a royalty of a penny per bottle to Executive for co-founding the brand and company into perpetuity.

4.   Severance Compensation.

4.1  Acceleration of Payments.   The Company will, if Executive so requests within thirty days following a Termination by Reason of Disability, elect to pay to Executive a lump sum severance payment by bank cashier’s check equal to the value of the cash payments that would otherwise be paid to Executive.

4.2.   No Severance Compensation Under Other Termination.   In the event of a Voluntary Termination, Termination for Cause, or Termination by reason of Executive’s Death, neither Executive nor his estate shall be paid any severance compensation.

5.   Other Agreements.   Executive agrees that to induce the Company to enter into this Agreement, he has concurrently executed and delivered to the Company all customary nondisclosure and noncompetition agreements for a one year period which it rquires of its executives.   Executive hereby covenants and agrees to fully abide by each and every term of such agreements, and agrees and understands that a breach or violation by Executive of any provision of any provision of either of such agreements shall constitute grounds for Termination for Cause under Section 2.8(a)(ii) of this Agreement, and that no such termination shall limit or affect any other rights and remedies of the Company arising out of or in connection with any such breach or violation.   The covenants on the part of Executive contained in such agreements shall survive termination of this Agreement, regardless of the reason for such termination, unless specifically excluded by this agreement.  Executive hereby represents and acknowledges that the Company is relying on the covenants contained in such agreements in entering into this Agreement, and that the terms and conditions of the covenants contained in such agreements are fair and reasonable.

6.   Miscellaneous.

6.1  Waiver.   The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.

6.2  Entire Agreement; Modifications.   This Agreement represents the entire understanding among the parties with respect to the subject matter hereof, and this Agreement supersedes any and all prior understandings, agreements, plans and negotiations, whether written or oral with respect to the subject matter hereof including without limitation, any understandings, agreements or obligations respecting any past or future compensation, bonuses, reimbursements or other payments to Executive from the Company.   All modifications to this Agreement must be in writing and signed by both parties hereto.

6.3  Notices.   All notices and other communications under this Agreement shall be in writing and shall be given by first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three (3) days after mailing to the respective persons named below:

If to the Company:

Hangover Joes Holding Corporation

9457 S. University #349

Highlands Ranch, CO 80126

Attn: Michael Jaynes,

Chairman

If to Executive:

Shawn Adamson

c/o

Any part may change such party’s address for notices by notice duly given pursuant to this Section

6.4  Headings.   The Section headings herein are intended for reference and shall not by themselves determine the construction or interpretation of this Agreement.

6.5  Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

6.6  Severability.   Should a court or other body of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, and all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.

6.7  Benefits of Agreement.   The provisions of this Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by the Company (except to an affiliate of the Company) or by Executive.

6.8  Counterparts.   This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.

6.9  Withholdings.   All compensation and benefits to Executive hereunder shall be subject to all applicable federal, state, local and other withholdings and similar taxes and other payments required by applicable law.

6.10  Remedies.   All rights and remedies of the Company and of the Executive hereunder shall be cumulative and the exercise of any right or remedy shall not preclude the exercise of another.

6.11  Interpretation Review.   Counsel in the negotiation and execution of this Agreement has represented both parties to this Agreement, and no inference shall be drawn against the drafting party.   Executive acknowledges that he has in fact reviewed and discussed this Agreement with his counsel and that he understands and assents to the terms hereof.

6.12  Arbitration.   Any controversy or claim arising out of or relating to this agreement, or breach thereof (other than any action by the Company seeking an injunction or equitable relief under the Executive Non-Disclosure Agreement and Proprietary Rights Assignment or the Non-Solicitation and Non-Competition Agreement executed by the Executive, as amended from time to time) shall be settled by binding arbitration to be held in Tampa, Florida, in accordance with the Rules of the American Arbitration Association, and judgment upon any proper award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  There shall be three arbitrators, one to be chosen directly by each party at will, and the third arbitrator to be selected by the two arbitrators so chosen.  To the extent permitted by the rules of the American Arbitration Association, the selected arbitrators may grant equitable relief.  Each party shall pay the fees of the arbitrator selected by him and his own attorneys, and the expenses of his witnesses and all other expenses connected with the presentation of his case.  The cost of the arbitration including the cost of the record of transcripts thereof, in any, administrative fees, and all other fees and cost shall be borne equally by the parties.   The rules of discovery of the Federal District Court for the ------- District of Colorado shall govern discovery conducted by the parties, who shall have the right to apply to said court for enforcement thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

	HANGOVER JOES HOLDING CORPORATION	EXECUTIVE
By:	/s/ Matthew A. Veal	/s/ Shawn Adamson
	CEO	Shawn Adamson

EXHIBIT "A"

EX-31.1

EXHIBIT 31.1

Certifications:

I, Matthew Veal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hangover Joe’s Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any changes in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: December 19, 2013	By	/s/ Matthew Veal
		Matthew Veal, Interim Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certifications:

I, Matthew Veal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hangover Joe’s Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any changes in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: December 19, 2013	By	/s/ Matthew Veal
		Matthew Veal, Chief Financial  Officer

EX-32.1

EXHIBIT 32.1

Certification of Principal Executive Officer

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Hangover Joe’s Holding Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: December 19, 2013	By	/s/ Matthew Veal
		Matthew Veal, Interim Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Certification of Principal Financial Officer

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Hangover Joe’s Holding Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: December 19, 2013	By	/s/ Matthew Veal
		Matthew Veal, Chief Financial Officer

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ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2013

ACCRUED EXPENSES [Abstract]

Schedule of Accrued Expenses

	September 30,		December 31,
	2013		2012
Accrued expenses	$	6,520	$	37,005
Deferred salaries		166,594		45,960
Accrued settlement costs - paid for in common stock		172,000		652,500
Accrued consulting costs - paid for in common stock		-		225,000
Accrued Interest		17,498		-
	$	362,612	$	960,465

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract]
NET SALES	$ 4,145	$ 386,560	$ 322,120	$ 736,081
COST OF GOODS SOLD	3,275	244,154	252,214	479,736
GROSS PROFIT	870	142,406	69,906	256,345
OPERATING EXPENSES
Selling and marketing	146,121	258,167	573,034	607,434
General and administrative	202,385	277,796	898,028	591,723
Total operating expenses	348,506	535,963	1,471,062	1,199,157
LOSS FROM OPERATIONS	(347,636)	(393,557)	(1,401,156)	(942,812)
OTHER EXPENSE
Interest expense	(52,455)	4	(290,944)	(211)
NET LOSS	$ (400,091)	$ (393,553)	$ (1,692,100)	$ (943,023)
BASIC AND DILUTED NET LOSS PER COMMON SHARE			$ (0.01)	$ (0.01)
Basic and diluted weighted average common shares outstanding	122,591,301	108,791,655	122,496,505	66,674,801

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ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2013

ACCRUED EXPENSES [Abstract]

ACCRUED EXPENSES

NOTE 4 - ACCRUED EXPENSES

Accrued expenses as of September 30, 2013 and December 31, 2012 consist of the following:

	September 30,		December 31,
	2013		2012
Accrued expenses	$	6,520	$	37,005
Deferred salaries		166,594		45,960
Accrued settlement costs - paid for in common stock		172,000		652,500
Accrued consulting costs - paid for in common stock		-		225,000
Accrued Interest		17,498		-
	$	362,612	$	960,465

In January 2013, the Company issued 4,500,000 and 1,500,000 common shares for the accrued settlement costs and accrued consulting costs, respectively. See Note 6 for further discussion of accrued settlement costs and accrued consulting costs.

Investor Relations Agreement

On February 15, 2013, the Company entered into an investor relations agreement with a firm which required the Company to pay a consulting fee of $2,500 per month and to provide 100,000 shares of the Company's common stock per month and warrants to purchase 100,000 shares of the Company's common stock per month. Based on the terms of the agreement, the Company determined that the measurement date of the shares to be issued is on the dates that the shares are earned, which is monthly.  The February and March common stock earned have an estimated fair value as $37,000 based on the closing market price on February 15, 2013 and March 1, April 1, and May 1,  respectively.   As the shares of common stock have not been issued as of September 30, 2013, the Company has recorded an accrued expense of $37,000 on the consolidated balance sheet until such shares are issued.

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended		3 Months Ended		9 Months Ended				9 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Mar. 01, 2013	Dec. 19, 2013 WBCP License Agreement [Member]	Sep. 30, 2013 WBCP License Agreement [Member]	Sep. 30, 2013 WBCP License Agreement [Member]	Oct. 01, 2015 WBCP License Agreement [Member]	Oct. 01, 2014 WBCP License Agreement [Member]	Jan. 31, 2013 WBCP License Agreement [Member]	Sep. 30, 2013 Board of Directors [Member]	Sep. 30, 2012 Board of Directors [Member]	Dec. 31, 2012 Board of Directors [Member]	Sep. 30, 2013 Design Services [Member]	Sep. 30, 2012 Design Services [Member]	Dec. 31, 2012 Design Services [Member]	Dec. 31, 2012 AMHC [Member]	Dec. 31, 2012 Independent Third Party [Member]
COMMITMENTS AND CONTINGENCIES [Abstract]
Management services agreement, monthly fee					$ 27,500
Management service agreement, term					24 months
Consulting agreement, term					9 months
Consulting agreement, extension					180 days
Consulting agreement, retainer					10,000
Consulting agreement, monthly fee			2,500		10,000
Consulting agreement, deferral until capital raise amount					300,000
Consulting agreement, shares issuable			100,000		3,000,000
Consulting agreement, shares issuable on demand					1,500,000
Consulting agreement, shares issuable on specific date					1,500,000
Accrued consulting costs - paid for in common stock					225,000	135,000
Prepaid consulting costs					225,000
Consulting expense			278,616
Commitments And Contingencies [Line Items]
Consideration payable								50,000	50,000	25,000	50,000	200,000
Payment for license rights							20,000		75,000
Sales commission, minimum percentage of individual sales													4.00%
Sales commission, maximum percentage of individual sales													6.00%
Royalty, percentage of all sales													3.00%			2.00%
Royalty expense								27,000	75,000				43,000	41,000		8,465	2,500
Settlement, shares issued																			3,000,000	1,500,000
Settlement liability					652,500
Monthly draw against commission or royalty													6,000			3,000
Prepaid expenses								75,000	75,000						28,000			17,000
Cost of goods	$ 3,275	$ 244,154	$ 252,214	$ 479,736

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2013

STOCKHOLDERS' EQUITY [Abstract]

Schedule of Stock Option Activity

					Weighted
			Weighted		Average
	Shares		average		Remaining		Aggregate
	under		exercise		contractual		intrinsic
Options	Option		price		Life		value
Outstanding at January 1, 2013		2,916,190	$	0.11
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding at September 30, 2013		2,916,190	$	0.11	2.26		75,796
Vested or Expected to Vest at September 30, 2013		2,150,000	$	0.14		2.44		26,250
Exercisable at September 30, 2013		2,150,000	$	0.14		2.44		26,250

Schedule of Nonvested Share Activity

			Weighted
	Number		Average
	Of		grant date
	Options		fair value
Non-vested options at January 1, 2013		766,190	$	0.06
Granted		-		-
Vested		-		-
Forfeited/cancelled		-		-
Non-vested options at September 30, 2013		766,190	$	0.06

Schedule of Warrant Activity

						Weighted
				Weighted		Average
				average		Remaining		Aggregate
				exercise		contractual		intrinsic
Warrants	Shares			Price		Life		value
Outstanding at January 1, 2013		6,739,528		$	0.05
Issued for Services		150,000		$	0.10
Exercised		-		$	-
Forfeited/Cancelled		(3,564,764	)	$	0.04
Outstanding at September 30, 2013		3,324,764		$	0.07	$	1.89	$	0
Vested or Expected to Vest at September 30, 2013		260,000		$	0.11	$	2.53	$	0
Exercisable at September 30, 2013		260,000		$	0.11	$	2.53	$	0

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STOCKHOLDERS EQUITY (Schedule of Stock Option Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Shares Under Options
Granted
Stock Options [Member]
Shares Under Options
Outstanding, beginning balance	2,916,190
Granted
Exercised
Forfeited/Cancelled
Outstanding, ending balance	2,916,190
Vested or Expected to Vest	2,150,000
Exercisable	2,150,000
Weighted Average Exercise Price
Outstanding, beginning balance	$ 0.11
Granted
Exercised
Forfeited/Cancelled
Outstanding, ending balance	$ 0.11
Vested or Expected to Vest	$ 0.14
Exercisable	$ 0.14
Outstanding, weighted average remaining contractual life	2 years 3 months 4 days
Vested or Expected to Vest, weighted average remaining contractual life	2 years 5 months 9 days
Exercisable, weighted average remaining contractual life	2 years 5 months 9 days
Outstanding, aggregate intrinsic value	$ 75,796
Vested or Expected to Vest, aggregate intrinsic value	26,250
Exercisable, aggregate intrinsic value	26,250
Warrants [Member]
Shares Under Options
Outstanding, beginning balance	6,739,528
Granted	150,000
Exercised
Forfeited/Cancelled	3,564,764
Outstanding, ending balance	3,324,764
Vested or Expected to Vest	260,000
Exercisable	260,000
Weighted Average Exercise Price
Outstanding, beginning balance	$ 0.05
Granted	$ 0.10
Exercised
Forfeited/Cancelled	$ 0.04
Outstanding, ending balance	$ 0.07
Vested or Expected to Vest	$ 0.11
Exercisable	$ 0.11
Outstanding, weighted average remaining contractual life	1 year 10 months 21 days
Vested or Expected to Vest, weighted average remaining contractual life	2 years 6 months 11 days
Exercisable, weighted average remaining contractual life	2 years 6 months 11 days
Outstanding, aggregate intrinsic value	0
Vested or Expected to Vest, aggregate intrinsic value	0
Exercisable, aggregate intrinsic value	$ 0

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STOCKHOLDERS' EQUITY (Stock Option Activity) (Narrative) (Details) (USD $)	9 Months Ended							3 Months Ended		9 Months Ended
	Sep. 30, 2013	Apr. 12, 2013	Dec. 31, 2012	Sep. 30, 2013 2009 Plan [Member]	Dec. 31, 2012 2009 Plan [Member]	Sep. 30, 2013 2012 Plan [Member]	Dec. 31, 2012 2012 Plan [Member]	Sep. 30, 2013 Warrants [Member]	Sep. 30, 2012 Warrants [Member]	Sep. 30, 2013 Warrants [Member]	Sep. 30, 2012 Warrants [Member]	Mar. 31, 2013 Warrants [Member]	Feb. 28, 2013 Warrants [Member]	Dec. 31, 2012 Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized under plan				650,000	7,000,000	4,500,000	11,500,000
Options outstanding				650,000		2,266,190		3,324,764		3,324,764				6,739,528
Authorized grants increase	13,350,000
Options to acquire shares not expected to vest	766,190		3,064,764
Share-based compensation expense, amount allocated										$ 11,574
Share-based compensation expense, amount not yet recognized	42,159
Share-based compensation expense, period of recognition	1 year
Number of shares called by warrants								150,000	6,129,528	150,000	6,129,528
Warrant term										3 years	3 years
Exercise price of warrants		0.12							0.0326		0.0326	0.09	0.11
Number of shares vesting in 2013 upon the achievement of certain performance objectives, subsequently cancelled									3,064,764		3,064,764
Number of shares vesting in 2014 upon the achievement of certain performance objectives									3,064,764		3,064,764
Contributed services								$ 0	$ 0	$ 0	$ 50,000

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STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Dec. 19, 2013	Nov. 14, 2013	Sep. 20, 2013	May 17, 2013	Apr. 12, 2013	Dec. 31, 2012
Class of Stock [Line Items]
Preferred stock, shares authorized	10,000,000	10,000,000							10,000,000
Preferred stock, par value per share	$ 0.10	$ 0.10							$ 0.10
Subscription agreement, investment				$ 20,000	$ 340,500	$ 500,000	$ 500,000	$ 1,000,000
Subscription agreement, number of Series C Preferred shares						5,000,000		5,000,000
Subscription agreement, common shares issuable upon conversion of preferred stock								15,000,000
Subscription agreement, number of common shares							15,000,000	15,000,000
Subscription agreement, number of common shares called by warrants						250,000	250,000	500,000
Proceeds from subscription agreement, second tranche		320,500
Common Stock, shares authorized	150,000,000	150,000,000							150,000,000
Common Stock, par value per share	$ 0.001	$ 0.001							$ 0.001
Number of shares issued for business acquisition			83,514,827
Dissenting Shareholder, cash at closing						5,000
Dissenting Shareholder, cash within 90 days						15,000
Dissenting shareholder, interest rate for accrued interest payable						5.00%
Dissenting Shareholder, shares issuable			612,953			50,000
Dissenting Shareholder, fair value of shares issuable			20,000			5,500
Authorized grants increase		13,350,000
Options to acquire shares not expected to vest	766,190	766,190							3,064,764
Common shares issued for settlement		5,500
Common shares issued for accrued settlement costs		652,500
Common shares returned by founder, shares	4,500,000
Shares cancelled due to dissenters right
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	425,000	425,000							425,000
Voting rights		8
Number of shares issued for each share of convertible preferred stock that is converted prior to 'Financial Milestones' being reached						8
Number of shares issued for each share of convertible preferred stock that is converted after 'Financial Milestones' are reached and before October 8, 2013 deadline						28.8
Number of shares issued for each share of convertible preferred stock that is converted after 'Financial Milestones' are reached and after October 8, 2013 deadline.						8
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	5,000,000	5,000,000				5,000,000
Voting rights		3
Common Stock, shares authorized						200,000,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$ (1,692,100)	$ (943,023)
Adjustments to reconcile net loss to net cash used in operating activities:
Contributed services		50,000
Bad debt expense	82,405	11,624
Amortization of prepaid consulting paid for in stock	278,618
Amortization of debt issuance costs	231,475
Amortization of debt discount	10,578
Warrant issued for services	11,574
Settlement costs to dissenting shareholder	5,500
Depreciation expense	799	708
Stock-based compensation		18,688
Changes in operating assets and liabilities:
Accounts receivable	6,633	(107,123)
Prepaid expenses	44,952	(70,110)
Deposits		7,500
Inventory	(26,179)	(80,379)
Accounts payable	324,676	371,806
Customer deposits		99,140
Accrued expenses	144,647	(28,865)
Net cash used in operating activities	(576,422)	(670,034)
CASH FLOW FROM INVESTING ACTIVITIES:
Net proceeds from sale of subsidiary interest		10,044
Purchase of property, plant and equipment		(1,098)
Net cash used in investing activities		8,946
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		710,214
Deposit on stock subscription	320,500
Payment made to dissenting shareholder	(20,000)
Borrowings under revolving credit facility	481,263
Payments on revolving credit facility	(103,046)
Net payments under inventory financing payable	(97,610)	(23,712)
Cash received for convertible note payable	125,000
Cash paid for debt issuance costs	(71,337)
Redemption of Series B preferred stock	(57,500)
Advances paid to from related party		(26,957)
Withdrawals		(10,579)
Net cash provided by (used in) financing activities	577,270	648,966
Net (decrease) increase in cash	848	(12,122)
Cash, beginning of period	8,779	53,048
Cash, end of period	9,627	40,926
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid	23,445	223
SUPPLEMENTAL DISCLOSURE NON-CASH ITEMS
Mandatorily redeemable preferred stock issued for debt issuance costs	125,000
Common stock issued for debt issuance costs	21,250
Common stock issued for accrued settlement	652,500
Common stock issued for accrued consulting	225,000
Beneficial conversion recorded on convertible note	31,735
Discount issued for debt issuance costs	$ 13,888

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2013

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial information contained herein should be read in conjunction with the Company's consolidated audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2012.

The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements included in this quarterly report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at the dates presented and the Company's results of operations and cash flows for the periods presented.  The Company's interim results are not necessarily indicative of the results to be expected for the entire year.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its 100%-owned subsidiary.  All intercompany accounts, transactions, and profits are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are used in accounting for certain items such as allowance for doubtful accounts, revenue recognition, and stock-based compensation. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.

Accounts Receivable and Concentration of Credit Risk

The Company is subject to credit risk through trade receivables. This credit risk is mitigated by the diversification of the Company's operations, as well as its customer base. The Company grants varying payment terms to its customers. Payment terms for customers can vary from due upon receipt up to net 45 days.

Four customers comprise approximately 84% of trade accounts receivable at September 30, 2013; these individual customer balances represent approximately 26%, 21%, 19% and 18% of the trade accounts receivable.  Two customers comprise approximately 78% of the trade accounts receivable at December 31, 2012; these individual customer balances represent approximately 65%, and 13% of the total trade accounts receivable. No single customer accounted for 10% or more of net sales for the three or nine months ended September 30, 2013.  One customer accounted for 44% and 23% of net sales for the three months and nine months ended September 30, 2012 respectively.  

Ongoing credit evaluations of customers' financial condition are performed. Collateral is not required. The Company maintains an allowance when necessary for doubtful accounts that is the Company's best estimate of potentially uncollectible trade receivables. Provisions are made based upon a specific review of all significant outstanding invoices that are considered potentially uncollectible in whole or in part. For those invoices not specifically reviewed or considered uncollectible, general provisions are provided at different rates, based upon the age of the receivable, historical experience, and other currently available evidence. The allowance estimates are adjusted as additional information becomes known or as payments are made. As of September 30, 2013 the allowance for doubtful accounts was approximately $113,000 and at December 31, 2012, the allowance for doubtful accounts was $11,624.

Inventory

Inventory is valued at the lower of cost (first-in, first-out) or market value. The inventory at September 30, 2013 consisted of finished goods and packing supplies and at December 31, 2012 primarily consisted of packing supplies.

License and Royalties

The Company has a license with Warner Bros. Consumer Products, Inc. ("WBCP") that allows the Company the use of the costumes, artwork, logos and other elements depicted in the 2009 movie, The Hangover.  This license, as amended, expires January 31, 2016.  The terms of the WBCP license provide for royalties based on a percentage of products sold, as defined, subject to agreed-upon guaranteed minimum royalties. Guaranteed minimum royalty payments are made periodically over the term of the license and are recorded when paid as a prepaid expense in the balance sheet.  The prepaid expense is amortized to royalties in cost of goods sold at a ratio of current period revenues to the total revenues expected to be recorded over the term of the license.  The Company reviews its sales projections quarterly to determine the likely recoverability of its prepaid asset, as well as any unpaid minimum obligation.  If management determines that the prepaid expense is unlikely to be recovered by product sales, prepaid license expense is charged to cost of goods sold, based on current and expected revenues, in the period in which such determination is made.   

Revenue Recognition

The Company has contractual agreements with certain third-party distributors.  Under the agreements, the Company is not guaranteed any minimum level of sales or transactions.  The Company also offers its products for sale through its website at www.hangoverjoes.com.

The Company recognizes revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists; (2) delivery to third party distributors and consumers via the Company's website has occurred; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured.  Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract between the Company and the customer.  For sales to distributors, revenue is usually recognized at the time of delivery.  The Company defers revenues on products sold to distributors for which there is a lack of credit history or if the distribution may be in a new market in which the Company has no prior experience.  The Company defers revenue in these situations until cash is received.   For sales through the Company's website, revenue is recognized at time of shipment.

Management evaluates the terms of its sales in consideration of the criteria outlined in Principal Agent Consideration with regards to its determination of gross versus net reporting of revenue for transactions with customers.  The Company sells, through its website, Hangover Joe's Recovery Shots.  In these transactions, management has determined that the Company (i) acts as principal; (ii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns; and (iii) has latitude in establishing price with the customer.  For these transactions, the Company recognizes revenue on a gross basis.

The Company offers a variety of incentives and discounts to distributors, customers and consumers through various programs to support the distribution of its products.  These incentives and discounts include cash discounts, price allowances, volume based rebates and product placement fees.  These incentives and discounts are reflected as a reduction of gross sales to arrive at net sales. The aggregate deductions from gross sales recorded in relation to these programs were approximately $6,000 and $12,000 for the three months and nine months ended September 30, 2013 and $7,400 and $17,200 for the three and nine months ended September 30, 2012, respectively.

Cost of Goods Sold

Cost of goods sold consists of the costs of raw materials utilized in the production of its product, co-packing fees, and in-bound freight charges. Raw material costs account for the largest portion of the cost of goods sold. Raw materials include bottles, ingredients and packaging materials. The manufacturer is responsible for the ingredients. Costs of goods sold also include license and royalty expenses.

Supplier/Manufacturer Concentration

The Company relies on its third-party suppliers for raw materials necessary for its products, and it relies on third-party manufacturers for the production of its product.  Although the Company believes that it could utilize alternative suppliers and manufacturers, any delay in locating and establishing relationships with other suppliers/manufacturers could result in product shortages and back orders for the products, with a resulting loss of net sales and profitability.  The Company's third-party manufacturer acquires some ingredients from suppliers outside of the United States.  Purchasing these ingredients is subject to the risks generally associated with importing raw materials from other countries, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, tariffs, trade disputes and foreign currency fluctuations.  These factors could result in a delay in or disruption of the supply of certain raw materials.  Any significant delay in or disruption of the supply of raw materials could have a material adverse effect on the Company's business.

Sales and Marketing Expenses

Sales and marketing costs include selling expenses such as distribution expenses to transport products to customers and warehousing expenses after manufacture, as well as expenses for advertising, sampling and in-store demonstration costs, costs for merchandise displays, point-of-sale materials, trade shows, other marketing expenses and product design expenses.

Advertising Expenses

Advertising costs are expensed as incurred and are included in sales and marketing expense in the accompanying consolidated statements of operations. Total advertising expenses were approximately $1,000 and $101,000 for the three months and nine months ended September 30, 2013 and $47,000 and $104,000 for the three months and nine months ended September 30, 2012, respectively.

Income Taxes

Prior to March 2012, no provision for income taxes was provided in the accompanying financial statements because HOJ LLC (as a limited liability company), and HOJ JV (as a partnership), elected to file as partnerships, and therefore management believes that prior to September 30, 2012 the Company was not subject to income taxes, and, that such taxes were the responsibility of the individual member/partners.

Beginning in March 2012, as a corporation, the Company now records a provision for deferred income tax assets and liabilities in order to reflect the net tax effects of temporary differences between (i) the tax basis of assets and liabilities and (ii) their reported amounts in the financial statements.  The provision is based upon enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income.  The Company establishes a valuation allowance when necessary to reduce deferred income tax assets to the amounts expected to be realized.  The Company expects to file income tax returns in the US Federal jurisdiction and various State jurisdictions.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements.

The Company's policy is to classify tax related interest and penalties as income tax expense. There is no interest or penalties estimated on the underpayment of income taxes as a result of unrecognized tax benefits.

Stock-Based Compensation

Stock-Based Compensation is recognized for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award.  Stock-Based Compensation expense is recognized over the period of service in exchange for the award (generally the vesting period).  The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

For shares issued to non-employees for goods or services, the Company accounts for these shares in accordance with ASC 505-50.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever are more reliably measurable (a) goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of the performance commitment date or performance completion date.

Net Loss per Share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Historical loss per share of the accounting acquirer (HOJ) has been adjusted retroactively to reflect the new capital structure of the Company as a result of the Merger Agreement.  Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Stock options, warrants, common shares underlying convertible preferred stock and convertible notes payable in the aggregate of  24,457,845, -0-, 24,457,845 and -0- shares as of and for the three and nine months ended September 30, 2013 and 2012 , respectively, were not included in the calculation of diluted net loss per common share because the effect would have been anti-dilutive.

Antidilutive shares of approximately 9,775,250 are included in the three and nine months ended September 30, 2013 for the prorated potential common share and warrant to be issued under the stock subscription agreement.

Fair Value of Financial Instruments

ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.

The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.

·   Level 1: Quoted prices in active markets for identical assets or liabilities.

·   Level 2: Observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

·   Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2013 and December 31, 2012, the Company had no financial assets or liabilities required to be reported for fair value purposes.

The carrying value of the Company's financial instruments, including cash, accounts receivable, accounts payable, line of credit, mandatorily redeemable preferred stock, and the inventory financing payable approximate fair value at September 30, 2013 and December 31, 2012, due to the relatively short maturity of the respective instruments. The fair value of related party payables is not practicable to estimate due to the related party nature of the underlying transactions.

Recent Accounting Pronouncements

In February 2013, FASB issued Accounting standards update 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires an entity to provide information about the amount reclassified out of accumulated other comprehensive income by component. The entity is also required to disclose significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting periods. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other discourses required under U.S. GAAP that provide additional detail about those amounts. The objective in this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update should be applied prospectively for reporting periods beginning after December 15, 2012. The adoption of this standard did not have a material impact on the Company's reported results of operations or financial position.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2013

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 5 - RELATED PARTY TRANSACTIONS

5.5% Promissory note payable, related party

The President/CEO of the Company has advanced funds to the Company from time to time for working capital.  As of September 30, 2013 and December 31, 2012, amounts payable to this party were $89,422 and $89,422, respectively.  These advances were non-interest bearing, unsecured, and due on demand. On March 1, 2013, the Company converted the outstanding advance amount of $89,422 into a promissory note.  Interest at the rate of 5.5% per annum is compounded and paid annually.  Principal payments in the amount of $14,966 and accrued interest shall be payable in six installments with the first payment due on June 15, 2013, which was not paid as of December 18, 2013.

Other related party transactions

During the three months and nine months ended September 30, 2013, the Company recorded net sales of $-0- and $4,693 for product sold to a company that is 32% owned by a board of director.

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DEBT

9 Months Ended

Sep. 30, 2013

DEBT [Abstract]

DEBT

NOTE 3 - DEBT

Inventory financing and factoring arrangements

In September 2012, the Company entered into a factoring agreement with a finance company which provided financing up to $250,000, secured by the accounts receivable and inventory of the Company. The finance company advanced to the Company up to 80% of eligible accounts receivable and was entitled to collect receivables directly from the Company's customers.  The Company paid a financing fee equal to 2.5% for receivable amounts outstanding up to 30 days and an additional rate of 0.084% per day (30.7% annualized) after the initial 30 days with a maximum exposure of 60 days.  

In October 2012, the Company entered into a purchase order financing arrangement with this same finance company which supplements the factoring agreement above.  The finance company advanced up to 100% of the manufacturing and shipping costs at the time a Company purchase order is submitted to the manufacturer.  The Company paid a financing fee equal to 3.85% of the purchase order amount for each transaction and an additional rate of 0.13% per day (47.4% annualized) after the initial 30 days. As of December 31, 2012, the inventory financing payable under the purchase order financing and factoring arrangement was $97,611.  Amounts outstanding under this agreement were paid in full in January 2013 when the Company entered into the revolving credit facility.

Revolving Credit Facility

On January 10, 2013, the Company entered into a senior secured lending arrangement with TCA for up to a maximum borrowing of $6,000,000. The credit facility provided for an initial line of credit of $425,000 based upon accounts receivables and projected sales and is to be used only as permitted under the specified use of proceeds for working capital purposes. The  initial line of credit has a six month term from the date of closing with a six month renewal option. The lending arrangement is secured by all of the assets of the Company. As a partial guaranty under the TCA lending arrangement, the Company's CEO personally guaranteed certain representations made by the Company to TCA.  At closing, the Company was advanced $425,000 less fees and closing costs, and an additional $56,000 has been advanced to the company through September 30, 2013.

In connection with the agreement above, TCA was issued an investment banking fee consisting of 125,000 shares of newly authorized Series B Preferred Shares in the Company equating to an aggregate of $125,000 in the Company's capital stock. The shares are mandatorily redeemable and scheduled to be repaid over the remainder of calendar year 2013. See below for further discussion of the Series B Preferred shares. Also in connection with the TCA agreement, the Company issued 194,954 shares of common stock to a consulting firm as consideration for a finder's fee for this transaction.

The Company is in default in its agreement with TCA and is currently trying to renegotiate its arrangement.

Mandatorily Redeemable Series B Preferred Stock

On January 10, 2013, the Board of Directors approved the authorization of 125,000 shares of Series B Preferred Stock (the "Series B Preferred Stock").  In connection with the TCA transaction, the Company issued 125,000 shares of Series B Preferred Stock. The Series B Preferred Stock ranks pari passu to the Common Stock. The Holder of outstanding shares of Series B Preferred Stock shall be entitled to notice of any shareholders' meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the holders of common stock. Each share of Series B Preferred Stock shall have one vote per share. All outstanding shares of Series B Preferred Stock will be entitled to be paid the "Liquidation Preference," which is defined and calculated as follows: $125,000 in the aggregate (not on a per share basis), payable monthly at various amounts, and due in full by virtue of the TCA default discussed above.  The mandatorily redeemable preferred stock is presented as a current liability in the accompanying September 30, 2013 balance sheet.

Convertible Promissory Note

On June 19, 2013, the Company closed on a 12%, 12 month convertible promissory note (the "Note") with JMJ Financial ("JMJ"). The face amount of the Note reflects a principal sum of $500,000 for total consideration of $450,000 (or a 10% original issue discount). Upon closing of the Note, the Company received $100,000 from JMJ. On September 24, 2013, the Company received an additional $25,000 from JMJ.

JMJ has the right, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The conversion price is the lesser of $0.05 or 70% of the average of the three lowest closing prices in the 25 trading days previous to the conversion.

The Note is subject to various default provisions (an "Event of Default"), and the occurrence of such an Event of Default will cause the outstanding principal amount under the Note, together with accrued and unpaid interest, and all other amounts payable under the Note, to become, at JMJ's election, immediately due and payable to JMJ.

The Company determined a beneficial conversion feature exists at the commitment date. A beneficial conversion feature of $32,000 was recorded as a discount to the note and has been amortized over the life of the loan. The debt discount recorded at September 30, 2013 is approximately $22,000.

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STOCKHOLDERS EQUITY (Schedule of Nonvested Stock Option Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Number of Options
Nonvested options, beginning balance	766,190
Granted
Vested
Forfeited/cancelled
Nonvested options, ending balance	766,190
Weighted Average Grant Date Fair Value
Nonvested options, beginning balance	$ 0.06
Granted
Vested
Forfeited/cancelled
Nonvested options, ending balance	$ 0.06

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CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred stock, par value per share	$ 0.10	$ 0.10
Preferred stock, shares authorized	10,000,000	10,000,000
Common Stock, par value per share	$ 0.001	$ 0.001
Common Stock, shares authorized	150,000,000	150,000,000
Common Stock, shares issued	122,591,301	120,846,348
Common stock, shares outstanding	122,591,301	120,846,348
Series A Preferred Stock [Member]
Preferred stock, shares authorized	425,000	425,000
Preferred stock, shares issued	87,501	87,501
Preferred stock, shares outstanding	87,501	87,501

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INCOME TAXES

9 Months Ended

Sep. 30, 2013

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 8 - INCOME TAXES

As discussed in Note 1, the Company entered into the Merger Agreement with HOJ, whereby on July 25, 2012, the Company acquired HOJ in a reverse triangular merger (the "Acquisition"). Because all of the operating businesses of AMHC were contemporaneously sold within five business days after the Acquisition, the transaction has been accounted for as a recapitalization of HOJ. Accordingly, the consolidated statement of operations includes the historical results of HOJ (a Colorado Corporation) and its predecessor entities, HOJ LLC (a limited liability company) and HOJ JV (a partnership).

Through March 5, 2012 (the date of incorporation of HOJ), no provision for income taxes has been provided in the accompanying combined financial statements because HOJ LLC and HOJ JV elected to file as partnerships, and therefore HOJ was not subject to income taxes, and, that such taxes are the responsibility of the individual member/partners.

Beginning March 5, 2012, HOJ began recording a provision for deferred income tax assets and liabilities in order to reflect the net tax effects of temporary differences between (i) the tax basis of assets and liabilities and (ii) their reported amounts in the financial statements. The provision is based upon enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income. The Company establishes a valuation allowance when necessary to reduce deferred income tax assets to the amounts expected to be realized.

On July 25, 2012, the Company acquired HOJ and began recording a provision for deferred income tax assets and liabilities for the combined companies. The provision for income taxes is recorded at the end of each interim period based on the Company's best estimate of its effective income tax rate expected to be applicable for the full fiscal year.  The Company's expected income tax benefit was approximately $575,000 for the nine months ended September 30, 2013.  The expected income tax benefit differs from the actual benefit of $0 each period, due primarily to the change in valuation allowance.

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CONSOLIDATED STATEMENT OF CHANGES IN DEFICIT (USD $)	Total	Common stock [Member]	Preferred stock [Member]	Additional paid-in capital [Member]	Accumulated deficit [Member]
Balance at Dec. 31, 2012	$ (1,403,893)	$ 120,847	$ 315,078	$ 623,790	$ (2,463,608)
Balance, shares at Dec. 31, 2012		120,846,348	87,501
Common shares returned by founder		4,500		4,500
Common shares returned by founder, shares		4,500,000
Common shares issued for accrued settlement costs	652,500	4,500		648,000
Common shares issued for accrued settlement costs, shares		4,500,000
Common shares issued for debt financing costs	21,250	195		21,055
Common shares issued for debt financing costs, shares		194,953
Common shares issued for accrued consulting services	225,000	1,500		223,500
Common shares issued for accrued consulting services, shares		1,500,000
Beneficial conversion feature	31,735			31,735
Common shares issued for settlement	5,500	50		5,450
Common shares issued for settlement, shares		50,000
Warrants to acquire common shares issued for investor relations services	11,574
Net loss	(1,692,100)				(1,692,100)
Balance at Sep. 30, 2013	$ (2,148,434)	$ 122,592	$ 315,078	$ 1,569,604	$ (4,155,708)
Balance, shares at Sep. 30, 2013		122,591,301	87,501

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
CURRENT ASSETS
Cash	$ 9,627	$ 8,779
Accounts receivable, net	42,235	131,273
Inventory	52,813	26,634
Prepaid expenses		188,570
Total current assets	104,675	355,256
PROPERTY AND EQUIPMENT,NET	2,416	3,215
TOTAL ASSETS	107,091	358,471
CURRENT LIABILITIES
Accounts payable	919,542	594,866
Accrued expenses	362,612	960,465
Stock subscription deposit	320,500
Revolving credit facility	378,216	97,611
Convertible note payable	117,733
Payable to shareholder		20,000
Mandatorily redeemable Series B preferred stock	67,500
Note payable - related party	89,422	89,422
Total current liabilities	2,255,525	1,762,364
COMMITMENTS AND CONTINGENCIES
DEFICIT
Preferred stock: $0.10 par value; authorized shares-10,000,000 Series A; 425,000 authorized shares, 87,501 and 87,501 shares issued and outstanding, respectively	315,078	315,078
Common stock; $0.001 par value; 150,000,000 authorized shares, 122,591,301 (2013) and 120,846,348 (2012) shares issued and outstanding	122,592	120,847
Additional paid-in capital	1,569,604	623,790
Accumulated deficit	(4,155,708)	(2,463,608)
Total deficit	(2,148,434)	(1,403,893)
TOTAL LIABILITIES AND DEFICIT	$ 107,091	$ 358,471

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INCOME TAXES (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
INCOME TAXES [Abstract]
Income tax benefit	$ (1,575,000)
Change in valuation allowance	$ 0

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RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
RELATED PARTY TRANSACTIONS [Abstract]
Advances to related party	$ 89,422	$ 89,422	$ 89,422
Promissory note payable	89,422	89,422
Interest rate		5.50%
Periodic principal payments to be paid in six installments		14,966
Net sales from related party	$ 0	$ 4,693
Ownership percentage in related party		32.00%

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 7 - STOCKHOLDERS' EQUITY

Preferred stock

The Company is authorized to issue up to 10,000,000 shares of Preferred stock, par value $0.10 per share.  The Articles of Incorporation provide that the Preferred stock may be issued from time to time in one or more series and gives the Board of Directors authority to establish the designations, preferences, limitations, restrictions, and relative rights of each series of Preferred Stock

Series A Preferred Stock

Of the 10,000,000 shares of the Company's authorized Preferred Stock, ($0.10 par value per share), 425,000 shares are designated as Series A Convertible Preferred Stock (the "Series A Preferred").  The holders of outstanding shares of Series A Preferred are entitled to notice of any shareholders' meeting and to vote as a single class with the common stock upon any matter submitted for approval by the holders of common stock, on an as-converted basis, as defined. Each share of Series A Preferred shall have eight votes per share. If any dividend or distribution is declared or paid by the Company on common stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series A Preferred will be entitled to participate with the holders of common stock in such dividend or distribution, as defined.

Additionally, upon liquidation, dissolution or winding up on the Company, the Series A Preferred shareholders are entitled to be paid together with the common shareholders on a pro-rata basis.  The Series A Preferred holders may convert such shares of Series A Preferred in whole or in part, at any time, or from time-to-time upon written notice to the Company subject to the terms set forth below. The Series A Preferred may, or shall, be converted into shares of the Company's authorized but unissued common stock on the following bases: (i) At the option of the holder, at any time before the "Financial Milestone" is met each share of Series A Preferred shall be convertible into eight shares of the Company's common stock. (ii) Upon the "Financial Milestone" being met, each share of Series A Preferred shall automatically be converted into 28.8 shares of the Company's common stock. (iii) If the "Financial Milestone" has not been met by October 8, 2013, each share of Series A Preferred then outstanding shall automatically be converted into eight shares of the Corporation's Common Stock.

Series C Preferred Stock

In April 2013, the Board of Directors approved the authorization of 5,000,000 shares of Series C Preferred Stock (the "Series C Preferred Stock"). The Series C Preferred shares have voting rights equal to three votes per share and contain an automatic conversion into 15,000,000 common shares immediately upon the Company obtaining shareholder approval of, and filing with the Colorado Secretary of State, an increase in authorized common stock to at least 200,000,000 shares.

 On April 12, 2013, the Company executed a term sheet with an accredited investor ("Investor") for a proposed investment of $1,000,000 in the Company in exchange for 15,000,000 shares of common stock, 5,000,000 shares of Series C Preferred Stock, and warrants to acquire 500,000 shares of common stock at $0.12 per share for a period of five years. The first tranche of $500,000 was to be deposited on or before May 17, 2013 in exchange for 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. The second tranche of $500,000 is to be deposited on or before September 20, 2013 in exchange for 5,000,000 shares of Series C Preferred Stock and warrants to acquire 250,000 common shares described above. As of September 30, 2013, the Company received $320,500 toward the first investment tranche.

The common shares and underlying common shares attributable to the Series C Preferred Stock and warrants will have piggyback registration rights that will be triggered if the Company files a registration statement with the Securities and Exchange Commission for the resale of other securities. The warrants may be redeemed by the Company if certain conditions are met, including that the shares underlying the warrants have been registered and the common stock trades at or above $.20 per share for 20 trading days. The Investor will be entitled to one seat on the Company's Board of Directors, and certain other development and distribution rights, as defined.

Common stock

The Company is authorized to issue up to 150,000,000 shares of $0.001 par value common stock. As discussed in Note 1, the Company entered into the Merger Agreement with HOJ, whereby the Company issued 83,514,827 common shares in exchange for all the outstanding shares of HOJ. This transaction has been accounted for as a recapitalization of HOJ and accordingly the historical stockholders' equity transactions of HOJ prior to the Acquisition has been retroactively restated for the equivalent number of shares received in the exchange after giving effect to any differences in the par value of the AMHC and HOJ common stock, with an offset to additional paid-in capital. 

Surrender of Founder's shares

In January 2013, a shareholder of the Company surrendered 4,500,000 shares of common stock to the Company's treasury for no consideration.  The shares were initially issued to a founder in March 2012 and were returned to increase the number of common shares available.

Dissenting Shareholder

In connection with the Acquisition, an HOJ shareholder holding the equivalent of 612,953 shares of common stock asserted his rights as a dissenting shareholder under the Colorado Business Corporation Act and demanded payment for the fair value amount of his shares as of the date of the Acquisition.  In July 2012, the Company estimated the fair value of these shares to be $20,000 and recorded a payable to shareholder in the amount of $20,000 and corresponding decrease to Equity.

On February 15, 2013, the Company entered into a settlement agreement with the dissenting HOJ shareholder.  Under the terms of the settlement agreement, the Company agreed to pay $5,000 cash at closing and $15,000 plus accrued interest at 5% within 90 days.  The Company also agreed to issue 50,000 shares of the Company's common stock.  The fair value of the common stock at the date of settlement was $5,500.  As of September 30, 2013, the outstanding amount has been repaid in full.

Stock options

Effective March 11, 2009, AMHC established the 2009 Stock Option Plan ("the "2009 Plan).  The 2009 Plan established by AMHC was retained by the Company after the Acquisition.  Under the 2009 Plan, the Company may grant non-statutory and incentive options to employees, directors and consultants for up to a total of 7,000,000 shares of common stock. The exercise prices of the options granted are determined by the Plan Committee, whose members are appointed by the Board of Directors, and the exercise prices are generally to be established at the estimated fair value of the Company's common stock at the date of grant. Options granted have terms that do not exceed five years. As of September 30, 2013, stock options to purchase 650,000 shares of common stock are outstanding under the 2009 Plan.

On July 26, 2012, the Company's shareholders approved the 2012 Stock Option Plan (the "2012 Plan"). Under the Plan, the Company may grant stock options, restricted and other equity awarded to any employee, consultant, independent contractor, director or officer of the Company for up to a total of 11,500,000 shares of common stock. As of September 30, 2013, stock options to purchase 2,266,190 shares of common stock are outstanding under the 2012 Plan.

In April 2013, the Company's Board of Directors reduced the number of common shares reserved under the 2012 Stock Option Plan from 11,500,000 shares to 4,500,000 and reduced the number of common shares reserved under the 2009 Stock Option Plan from 7,000,000 shares to 650,000 shares thereby increasing the number of common shares available for issuance by 13,350,000.

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton valuation model. Expected volatility is based upon weighted average of historical volatility over the expected term of the option and implied volatility. The expected term of stock options is based upon historical exercise behavior and expected exercised behavior. The risk-free interest rate is based upon implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The dividend yield is assumed to be none as the Company does not anticipate paying any dividends in the foreseeable future.

The following is a summary of stock option activity for the nine months ended September 30, 2013:

					Weighted
			Weighted		Average
	Shares		average		Remaining		Aggregate
	under		exercise		contractual		intrinsic
Options	Option		price		Life		value
Outstanding at January 1, 2013		2,916,190	$	0.11
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding at September 30, 2013		2,916,190	$	0.11	2.26		75,796
Vested or Expected to Vest at September 30, 2013		2,150,000	$	0.14		2.44		26,250
Exercisable at September 30, 2013		2,150,000	$	0.14		2.44		26,250

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company's common stock on September 30, 2013, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on September 30, 2013.

As a result of the reorganization described in Note 1, the Company has not recognized any stock-based compensation cost previously recorded on the books of AMHC prior to the date of reorganization.  No stock-based compensation was recognized during the three and nine months ended September 30, 2013 or during the three and nine months ended September 30, 2012. As of September 30, 2013, the Company does not expect outstanding options to acquire 766,190 shares of common stock will vest due to the performance criteria outlined in the option agreement. Compensation cost is revised if subsequent information indicates that the actual number of options vested is likely to differ from previous estimates.

The following table summarizes the activity and value of non-vested options as of and for the nine months ended September 30, 2013:

			Weighted
	Number		Average
	Of		grant date
	Options		fair value
Non-vested options at January 1, 2013		766,190	$	0.06
Granted		-		-
Vested		-		-
Forfeited/cancelled		-		-
Non-vested options at September 30, 2013		766,190	$	0.06

As of September 30, 2013, there was $42,159 of total unrecognized compensation cost related to non-vested share based compensation arrangements granted under the qualified stock option plans. That cost is expected to be recognized over a weighted average period of 1.0 years if certain performance criteria are met.

Warrants:

Summarized information about warrants outstanding and exercisable at September 30, 2013 is as follows:

						Weighted
				Weighted		Average
				average		Remaining		Aggregate
				exercise		contractual		intrinsic
Warrants	Shares			Price		Life		value
Outstanding at January 1, 2013		6,739,528		$	0.05
Issued for Services		150,000		$	0.10
Exercised		-		$	-
Forfeited/Cancelled		(3,564,764	)	$	0.04
Outstanding at September 30, 2013		3,324,764		$	0.07	$	1.89	$	0
Vested or Expected to Vest at September 30, 2013		260,000		$	0.11	$	2.53	$	0
Exercisable at September 30, 2013		260,000		$	0.11	$	2.53	$	0

In April 2012, the Company granted a warrant to a sales consultant and director of the Company to purchase up to 6,129,528 shares of common stock in connection with a two-year service agreement.  This warrant has a three-year term and an exercise price of $0.0326 per share with 3,064,764 shares vesting each on January 1, 2013 and January 1, 2014 if the Company's sales exceed certain thresholds in 2012 and 2013, respectively.  On January 1, 2013, the board of directors concluded the sales target for 2012 was not met and warrants to purchase 3,064,764 shares of Company common stock were cancelled. Management has evaluated the performance criteria and currently does not anticipate that the sales thresholds for 2013 will be met and accordingly no stock-based compensation has been recognized during the three and nine months ended September 30, 2013. Compensation cost is revised if subsequent information indicates that the actual number of warrants vested is likely to differ from previous estimates.

In February and March 2013, the Company granted a warrant to an investor relations firm to purchase up to 150,000 shares of common stock that vested immediately.  The warrants have a three-year term and an exercise price of $0.11 and $.09 per share, and $11,574 of stock based compensation related to this warrant and is recorded in general and administrative expenses during the nine months ended September 30, 2013.

Contributed Services

Prior to September 30, 2012, the Company's owners/officers contributed management and administrative services to the Company.  The fair value of those services has been recorded as an expense in the accompanying consolidated financial statements based on the estimated fair value for such services, with a corresponding credit to contributed capital.  The fair value of the historical services was estimated based on the compensation per employment terms that were entered into in March 2012.  Contributed services were $0, $0, $0 and $50,000 for the three and nine months ended September 30, 2013 and 2012, respectively.

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SUBSEQUENT EVENTS (Details) (USD $)	Nov. 06, 2013	Sep. 30, 2013	Apr. 12, 2013	Dec. 31, 2012
Subsequent Event [Line Items]
Capital raise amount	$ 500,000
Exercise price of warrants			0.12
Common Stock, shares authorized		150,000,000		150,000,000
Preferred stock, shares authorized		10,000,000		10,000,000
Preferred stock, par value per share		$ 0.10		$ 0.10
Investment Agreement [Member]
Subsequent Event [Line Items]
Number of units	200,000
Price per unit	$ 2.50
Preferred shares per unit	1
Warrants per unit	100
Exercise price of warrants	0.05
Common Stock, shares authorized	500,000,000
Series D Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized	200,000

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2013

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Basis of Presentation

Basis of Presentation

The financial information contained herein should be read in conjunction with the Company's consolidated audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2012.

The accompanying unaudited consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements. In the opinion of management, the unaudited consolidated financial statements included in this quarterly report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of its financial position at the dates presented and the Company's results of operations and cash flows for the periods presented.  The Company's interim results are not necessarily indicative of the results to be expected for the entire year.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its 100%-owned subsidiary.  All intercompany accounts, transactions, and profits are eliminated in consolidation.

Use of estimates

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are used in accounting for certain items such as allowance for doubtful accounts, revenue recognition, and stock-based compensation. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.

Accounts Receivable and Concentration of Credit Risk

Accounts Receivable and Concentration of Credit Risk

The Company is subject to credit risk through trade receivables. This credit risk is mitigated by the diversification of the Company's operations, as well as its customer base. The Company grants varying payment terms to its customers. Payment terms for customers can vary from due upon receipt up to net 45 days.

Four customers comprise approximately 84% of trade accounts receivable at September 30, 2013; these individual customer balances represent approximately 26%, 21%, 19% and 18% of the trade accounts receivable.  Two customers comprise approximately 78% of the trade accounts receivable at December 31, 2012; these individual customer balances represent approximately 65%, and 13% of the total trade accounts receivable. No single customer accounted for 10% or more of net sales for the three or nine months ended September 30, 2013.  One customer accounted for 44% and 23% of net sales for the three months and nine months ended September 30, 2012 respectively.  

Ongoing credit evaluations of customers' financial condition are performed. Collateral is not required. The Company maintains an allowance when necessary for doubtful accounts that is the Company's best estimate of potentially uncollectible trade receivables. Provisions are made based upon a specific review of all significant outstanding invoices that are considered potentially uncollectible in whole or in part. For those invoices not specifically reviewed or considered uncollectible, general provisions are provided at different rates, based upon the age of the receivable, historical experience, and other currently available evidence. The allowance estimates are adjusted as additional information becomes known or as payments are made. As of September 30, 2013 the allowance for doubtful accounts was approximately $113,000 and at December 31, 2012, the allowance for doubtful accounts was $11,624.

Inventory

Inventory

Inventory is valued at the lower of cost (first-in, first-out) or market value. The inventory at September 30, 2013 consisted of finished goods and packing supplies and at December 31, 2012 primarily consisted of packing supplies.

License and Royalties

License and Royalties

The Company has a license with Warner Bros. Consumer Products, Inc. ("WBCP") that allows the Company the use of the costumes, artwork, logos and other elements depicted in the 2009 movie, The Hangover.  This license, as amended, expires January 31, 2016.  The terms of the WBCP license provide for royalties based on a percentage of products sold, as defined, subject to agreed-upon guaranteed minimum royalties. Guaranteed minimum royalty payments are made periodically over the term of the license and are recorded when paid as a prepaid expense in the balance sheet.  The prepaid expense is amortized to royalties in cost of goods sold at a ratio of current period revenues to the total revenues expected to be recorded over the term of the license.  The Company reviews its sales projections quarterly to determine the likely recoverability of its prepaid asset, as well as any unpaid minimum obligation.  If management determines that the prepaid expense is unlikely to be recovered by product sales, prepaid license expense is charged to cost of goods sold, based on current and expected revenues, in the period in which such determination is made.   

Revenue Recognition

Revenue Recognition

The Company has contractual agreements with certain third-party distributors.  Under the agreements, the Company is not guaranteed any minimum level of sales or transactions.  The Company also offers its products for sale through its website at www.hangoverjoes.com.

The Company recognizes revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists; (2) delivery to third party distributors and consumers via the Company's website has occurred; (3) the sales price is fixed or determinable; and (4) collectability is reasonably assured.  Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract between the Company and the customer.  For sales to distributors, revenue is usually recognized at the time of delivery.  The Company defers revenues on products sold to distributors for which there is a lack of credit history or if the distribution may be in a new market in which the Company has no prior experience.  The Company defers revenue in these situations until cash is received.   For sales through the Company's website, revenue is recognized at time of shipment.

Management evaluates the terms of its sales in consideration of the criteria outlined in Principal Agent Consideration with regards to its determination of gross versus net reporting of revenue for transactions with customers.  The Company sells, through its website, Hangover Joe's Recovery Shots.  In these transactions, management has determined that the Company (i) acts as principal; (ii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns; and (iii) has latitude in establishing price with the customer.  For these transactions, the Company recognizes revenue on a gross basis.

The Company offers a variety of incentives and discounts to distributors, customers and consumers through various programs to support the distribution of its products.  These incentives and discounts include cash discounts, price allowances, volume based rebates and product placement fees.  These incentives and discounts are reflected as a reduction of gross sales to arrive at net sales. The aggregate deductions from gross sales recorded in relation to these programs were approximately $6,000 and $12,000 for the three months and nine months ended September 30, 2013 and $7,400 and $17,200 for the three and nine months ended September 30, 2012, respectively.

Cost of Goods Sold

Cost of Goods Sold

Cost of goods sold consists of the costs of raw materials utilized in the production of its product, co-packing fees, and in-bound freight charges. Raw material costs account for the largest portion of the cost of goods sold. Raw materials include bottles, ingredients and packaging materials. The manufacturer is responsible for the ingredients. Costs of goods sold also include license and royalty expenses.

Supplier/Manufacturer Concentration

Supplier/Manufacturer Concentration

The Company relies on its third-party suppliers for raw materials necessary for its products, and it relies on third-party manufacturers for the production of its product.  Although the Company believes that it could utilize alternative suppliers and manufacturers, any delay in locating and establishing relationships with other suppliers/manufacturers could result in product shortages and back orders for the products, with a resulting loss of net sales and profitability.  The Company's third-party manufacturer acquires some ingredients from suppliers outside of the United States.  Purchasing these ingredients is subject to the risks generally associated with importing raw materials from other countries, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, tariffs, trade disputes and foreign currency fluctuations.  These factors could result in a delay in or disruption of the supply of certain raw materials.  Any significant delay in or disruption of the supply of raw materials could have a material adverse effect on the Company's business.

Sales and Marketing Expenses

Sales and Marketing Expenses

Sales and marketing costs include selling expenses such as distribution expenses to transport products to customers and warehousing expenses after manufacture, as well as expenses for advertising, sampling and in-store demonstration costs, costs for merchandise displays, point-of-sale materials, trade shows, other marketing expenses and product design expenses.

Advertising Expenses

Advertising Expenses

Advertising costs are expensed as incurred and are included in sales and marketing expense in the accompanying consolidated statements of operations. Total advertising expenses were approximately $1,000 and $101,000 for the three months and nine months ended September 30, 2013 and $47,000 and $104,000 for the three months and nine months ended September 30, 2012, respectively.

Income Taxes

Income Taxes

Prior to March 2012, no provision for income taxes was provided in the accompanying financial statements because HOJ LLC (as a limited liability company), and HOJ JV (as a partnership), elected to file as partnerships, and therefore management believes that prior to September 30, 2012 the Company was not subject to income taxes, and, that such taxes were the responsibility of the individual member/partners.

Beginning in March 2012, as a corporation, the Company now records a provision for deferred income tax assets and liabilities in order to reflect the net tax effects of temporary differences between (i) the tax basis of assets and liabilities and (ii) their reported amounts in the financial statements.  The provision is based upon enacted tax laws and rates in effect for the years in which the differences are expected to affect taxable income.  The Company establishes a valuation allowance when necessary to reduce deferred income tax assets to the amounts expected to be realized.  The Company expects to file income tax returns in the US Federal jurisdiction and various State jurisdictions.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements.

The Company's policy is to classify tax related interest and penalties as income tax expense. There is no interest or penalties estimated on the underpayment of income taxes as a result of unrecognized tax benefits.

Stock-Based Compensation

Stock-Based Compensation

Stock-Based Compensation is recognized for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award.  Stock-Based Compensation expense is recognized over the period of service in exchange for the award (generally the vesting period).  The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

For shares issued to non-employees for goods or services, the Company accounts for these shares in accordance with ASC 505-50.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever are more reliably measurable (a) goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of the performance commitment date or performance completion date.

Net Loss Per Share

Net Loss per Share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Historical loss per share of the accounting acquirer (HOJ) has been adjusted retroactively to reflect the new capital structure of the Company as a result of the Merger Agreement.  Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Stock options, warrants, common shares underlying convertible preferred stock and convertible notes payable in the aggregate of  24,457,845, -0-, 24,457,845 and -0- shares as of and for the three and nine months ended September 30, 2013 and 2012 , respectively, were not included in the calculation of diluted net loss per common share because the effect would have been anti-dilutive.

Antidilutive shares of approximately 9,775,250 are included in the three and nine months ended September 30, 2013 for the prorated potential common share and warrant to be issued under the stock subscription agreement.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.

The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.

·   Level 1: Quoted prices in active markets for identical assets or liabilities.

·   Level 2: Observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

·   Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2013 and December 31, 2012, the Company had no financial assets or liabilities required to be reported for fair value purposes.

The carrying value of the Company's financial instruments, including cash, accounts receivable, accounts payable, line of credit, mandatorily redeemable preferred stock, and the inventory financing payable approximate fair value at September 30, 2013 and December 31, 2012, due to the relatively short maturity of the respective instruments. The fair value of related party payables is not practicable to estimate due to the related party nature of the underlying transactions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2013, FASB issued Accounting standards update 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires an entity to provide information about the amount reclassified out of accumulated other comprehensive income by component. The entity is also required to disclose significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting periods. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other discourses required under U.S. GAAP that provide additional detail about those amounts. The objective in this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update should be applied prospectively for reporting periods beginning after December 15, 2012. The adoption of this standard did not have a material impact on the Company's reported results of operations or financial position.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 6 - COMMITMENTS AND CONTINGENCIES

WBCP License Agreement

The Company has a license with WBCP that allows the Company the use of the costumes, artwork, logos and other elements depicted in the 2009 movie, The Hangover.  This license had an initial term through January 31, 2013 and provides for certain royalties based on a percentage of products sold subject to certain agreed-upon guaranteed minimum royalty payments over the term of the license.

In January 2013, the Company entered into an extension of its product license agreement with WBCP extending the term of the agreement to January 31, 2016. Further, the extension added certain channels of distribution and required certain agreed-upon additional Guaranteed Consideration of $200,000, as defined over the next three years. Pursuant to the agreement, $75,000 of Guaranteed Consideration was paid in January 2013, payments of $50,000 are due on or before October 1, 2013 and 2014, and a payment of $25,000 is due on or before October 1, 2015. The amount was recorded as a prepaid expense and was amortized to October 1, 2013 when the next payment is due. The Company recognized $27,000 and $75,000 in cost of sales for royalties on this agreement for the three months and nine months ended September 30, 2013.  The Company paid WBCP $20,000 of the $50,000 Guaranteed Consideration amount due as of October 1, 2013, subsequent to September 30, 2013.  The Company has negotiated an extension agreement with WBCP for the remaining amount due until December 31, 2013.

Royalty and Commission Agreements

The Company has a representative agreement with an individual who became a member of the Company's board of directors in March 2012. Under this agreement, as amended, this individual is entitled to a commission of between 4% and 6% of sales made by this individual, based on the nature of the sales, and a royalty of 3% of all sales made by the Company, as defined. Commissions and royalty expense to this individual for the nine months ended September 30, 2013 and 2012 totaled approximately $43,000 and $41,000 respectively. Effective April 1, 2012, the Company agreed to pay this individual a $6,000 draw per month against commissions. As of September 30, 2013 and December 31, 2012, net prepaid expenses related to draws in excess of commissions were nil and approximately $28,000, respectively.

The Company has an agreement with a second individual for design services. Under this agreement, as amended, this individual is entitled to receive a royalty of 2% of net sales, as defined. Royalty expense to this individual was $8,465 and $2,500 for the three months ended September 30, 2013 and 2012, respectively. Effective April 1, 2012, the Company agreed to pay this individual a $3,000 draw per month against royalties. As of September 30, 2013 and December 31, 2012, net prepaid expenses related to draws in excess of royalties were nil and approximately  $17,000, respectively.

Management Agreement with AMHC Managed Services

Effective March 1, 2012, HOJ entered into a management agreement (the "Management Agreement") with AMHC Managed Services, Inc. ("AMHC Services"), a subsidiary of AMHC. The significant terms of the Management Agreement provided for monthly payments to AMHC Services in exchange for financial management and accounting services, corporate office and administrative services, and expertise regarding compliance with securities regulations.  The Management Agreement term was 24 months, and required the Company to pay AMHC Services $27,500 per month.

On October 1, 2012, AMHC Services suspended the accounting and financial management services provided under the Management Agreement due to a dispute under the contract.  In January 2013, the Company settled the dispute and terminated the Management Agreement in exchange for 3,000,000 shares of common stock (See below).

Settlement Agreement with AMHC Services and Other Claims

On January 14, 2013, the Company entered into a settlement agreement with AMHC Services, the principal owners of AMHC Services, and an independent third party pursuant to which the respective parties released each other from certain claims. Under the terms of the settlement, the Company issued AMHC Services 3,000,000 shares of its common stock, and issued the independent third party 1,500,000 shares of its common stock.  The fair value of the shares issued under this settlement was $652,500 based upon the closing price of the stock on the date of the signed settlement agreement. This settlement was recorded in year ended December 31, 2012 (see Note 4).

Strategic Consulting Agreement

In November 2012, the Company entered into a consulting agreement with The Bricktown Group ("Bricktown") to provide beverage management and strategic advisory consulting services to the Company.  The consulting agreement has an initial term of nine months with an automatic extension of 180 days provided neither party has provided a written notice to not extend the agreement.  The contract can be terminated upon written notice at any time, but the Company is obligated to pay any fees accrued under the agreement.  The agreement requires the Company to pay an upfront retainer of $10,000 and monthly consulting fees of $10,000 per month, which was to be deferred until the Company raised at least $300,000 in debt or equity.  The Company is to issue 3,000,000 shares of the Company's common stock in two tranches, of which 1,500,000 shares are issuable upon request after January 4th, 2013 and 1,500,000 shares are issuable on March l, 2013. The first 1,500,000 shares are non-forfeitable and fully vested on the date of the agreement.

Based upon the terms of the agreement, the Company determined that the measurement date for the initial 1,500,000 shares to be issued under the agreement is the contract date and calculated a fair value of $225,000 based upon the closing market price on this date.  Accordingly, the Company recorded an accrued consulting cost liability of $225,000 on the consolidated balance sheet as of December 31, 2012 until such shares are issued.  The stock-based compensation associated with the initial shares of $225,000 was recorded as prepaid consulting costs and is being amortized over the initial 3 months of this agreement. For the nine months  ended September 30, 2013, the Company recognized consulting expense of $278,616 related to this agreement. The measurement date for the second tranche of 1,500,000 shares was March 1, 2013.  The fair value of these shares of $135,000 was determined based upon the closing market price of the Company's common stock on this date and was amortized over the remaining 3 months of the contract.  On January 10, 2013, the Company issued the initial 1,500,000 shares of its common stock to Bricktown. The second tranche of shares have not been issued as of December 18, 2013. 

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ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS

9 Months Ended

Sep. 30, 2013

ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS [Abstract]

ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS

NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS

Organization:

Hangover Joe's Holding Corporation ("HJHC" or the "Company") was originally incorporated in the State of Colorado in December 2005 as Across American Real Estate Exchange, Inc. ("AAEX"). In May 2010, AAEX changed its name to Accredited Members Holding Corporation ("AMHC"). On July 25, 2012, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Hangover Joe's, Inc., a privately-held Colorado corporation ("HOJ"), whereby on July 25, 2012, the Company acquired HOJ in a reverse triangular merger (the "Acquisition").  Prior to the Acquisition, the Company had 36,807,801 shares outstanding. Upon closing the Acquisition, the Company issued 83,514,827 common shares to the HOJ shareholders in exchange for all of their ownership interests in HOJ such that the former owners of HOJ owned approximately 69% of the Company post Acquisition.  The shareholders of the Company prior to the Acquisition owned approximately 31% of the Company post Acquisition.  In connection with the Acquisition on July 25, 2012, the Company changed its name to Hangover Joe's Holding Corporation.

The Merger Agreement further provided that within five business days after the closing of the Acquisition, the Company would sell to Accredited Members Acquisition Corporation ("Buyer") all of the equity interests in three of the Company's subsidiaries (the "Sale"), being Accredited Members, Inc., AMHC Managed Services, Inc. and World Wide Premium Packers, Inc. (collectively, the "Subsidiaries").  Buyer is a privately-held Colorado corporation owned by two former directors of the Company, JW Roth and David Lavigne.  The parties closed the Sale on July 27, 2012.  The Buyer paid $10,000 and assumed all liabilities related to the business of the Subsidiaries in exchange for all of the shares in the Subsidiaries owned by the Company.

HOJ is a Colorado corporation formed on March 5, 2012.  HOJ was formed for the purpose of acquiring all of the assets of both Hangover Joe's Products LLC ("HOJ LLC") and Hangover Joe's Joint Venture ("HOJ JV").  HOJ LLC had conducted operations through HOJ JV, with the owner of HOJ LLC being one of the same owners and control persons of HOJ JV. Effective March 30, 2012, HOJ acquired the net assets of HOJ LLC and HOJ JV through the issuance of common stock of HOJ.  Because HOJ had no significant assets or business operations prior to the merger and each of these entities were owned by the same control group, this transaction was accounted for as a reorganization of entities under common control.  Accordingly, the historical results of operations of HOJ LLC and HOJ JV prior to March 30, 2012 are included in the results of operations of the Company.

Because all of the operating businesses of AMHC were contemporaneously sold within five business days after the Acquisition, the transaction has been accounted for as a recapitalization of HOJ.  Accordingly, the accompanying consolidated financial statements include the financial position, results of operations and cash flows of HOJ and its predecessor entities, HOJ LLC and HOJ JV, prior to the date of Acquisition. The historical results of operations and cash flows of AMHC and the Subsidiaries prior to the date of the Acquisition have been excluded from the accompanying consolidated financial statements. The stockholders' equity of HOJ prior to the Acquisition has been retroactively restated for the equivalent number of shares received in the exchange after giving effect to any differences in the par value of the AMHC and HOJ common stock, with an offset to additional paid-in capital.  The restated consolidated accumulated deficit of the accounting acquirer (HOJ) has been carried forward after the exchange.

Description of Business:

The Company sells an all-natural, two-ounce beverage, formulated to help relieve the symptoms associated with alcohol induced hangovers - the Hangover Recovery Shot. The Hangover Recovery Shot is an officially licensed product of The Hangover movie series from Warner Brothers.  The Company has registered the trademark "Hangover Joe's Get Up & Go" with the U.S. Patent and Trademark office. The assets consist of intellectual property relating to Hangover Joe's Recovery Shot, including but not limited to a license agreement dated July 19, 2011, between HOJ LLC and Warner Bros. Consumer Products, Inc.  The license agreement permits HOJ to use the costumes, artwork logos, and other elements depicted in the 2009 movie "The Hangover" during the term of the license agreement, as amended, which expires January 31, 2016.  The Company sells its products primarily to convenience stores, liquor stores, and grocery stores through distribution agreements, as well as through online internet sales. The Company began selling a hangover recovery shot in February 2011 and began selling the licensed Hangover Joe's Recovery Shot in July 2011. HOJ is actively seeking to expand the distribution of the Hangover Joe's Recovery Shot, and has recently entered into distribution agreements to expand its reach to Australia, New Zealand and Canada.

 Management's plans

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company reported a net loss of approximately $400,000 and $1,692,000 for the three and nine months ended September 30, 2013, and a working capital deficiency and accumulated deficit of approximately $2,150,000 and $4,155,000, respectively, at September 30, 2013.  The Company has a limited operating history and has relied primarily on debt financing and private placements of its common stock to fund its operations. It is also in default on its revolving credit facility with TCA Global Financial (note 3). The Company cannot provide any assurance it will be able to raise funds through a future issuance of debt or equity to carry out its business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts or classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Management's plans with regards to these conditions are described below.

Management has taken various steps to increase capital resources and improve liquidity.  

-   On April 12, 2013, the Company executed a term sheet with an accredited investor ("Investor") for a proposed investment of $1,000,000 in the Company in exchange for 15,000,000 shares of common stock, 5,000,000 shares of newly authorized Series C Preferred Stock (convertible into 15,000,000 shares of common stock) and warrants to acquire 500,000 shares of common stock at $0.12 for a period of five years. The first tranche of $500,000 was to be deposited on or before May 17, 2013 in exchange for 15,000,000 shares of common stock and warrants to acquire 250,000 common shares described above. The second tranche of $500,000 is to be deposited on or before September 20, 2013 in exchange for 5,000,000 shares of Series C Preferred Stock and warrants to acquire 250,000 common shares described above (See Note 7). As of December 18, 2013, the Company received $340,500 toward the first investment tranche ($20,000 of which was recieved subsequent to September 30, 2013). (Note 7).

-   In June 2013, the Company entered into a 12% 12 month convertible note for up to a maximum borrowing of $500,000 with JMJ Financial, Inc. The Company was advanced $125,000, less fees and closing costs. (Note 3).  

-   In November 2013, the Company entered an arrangement with Fundable.com to raise $500,000. (Note 9). To date, this project has not commenced. Additionally the Company has entered into a $25,000 convertible note with JSJ Financial; however no funds have been received under this note agreement.

-   Management has also taken steps to reduce its operating costs. As part of this effort, certain executive officers and consultants agreed to defer a portion of their compensation effective October 1, 2012.   On December 16, 2013, the Company announced signing of a distribution contract for the sale of hangover recovery shots in Japan. Over the next three years the Company intends to distribute its recovery shots through up to 8,600 drug and food stores, and sales are expected to reach over 10 million bottles. This is the largest distribution agreement yet internationally for the Company to date. The Company intends to start shipping containers to Japan in early 2014. The contract calls for one million bottles to be shipped in 2014, which would exceed all of our sales to date, followed by three million bottles in 2015, and six million in 2016. The Company is pursuing additional opportunities but has no assurance they will materialize. The contract will require marketing support and additional capital which the company intends to pursue vigorously. There is no assurance the Company can raise the capital or perform the contractual requirements without capital.

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ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Apr. 12, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 19, 2013	Nov. 14, 2013	Nov. 06, 2013	Sep. 20, 2013	May 17, 2013	Jan. 10, 2013	Dec. 31, 2012	Jul. 25, 2012
ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND MANAGEMENT'S PLANS [Abstract]
Common stock, shares outstanding		122,591,301		122,591,301								120,846,348	36,807,801
Cash paid for business acquired					$ 10,000
Number of shares issued for business acquisition					83,514,827
Existing shareholders new ownership percentage in company after merger and reorganization													69.00%
HOJ shareholders new ownership percentage in company after merger and reorganization													31.00%
Net loss		(400,091)	(393,553)	(1,692,100)	(943,023)
Working capital deficiency		(2,150,000)		(2,150,000)
Accumulated deficit		(4,155,708)		(4,155,708)								(2,463,608)
Line of credit, maximum borrowing capacity											6,000,000
Line of credit, initial borrowing capacity											425,000
Line of credit, advance		56,000		56,000							425,000
Borrowings under revolving credit facility				481,263
Subscription agreement, investment	1,000,000					20,000	340,500		500,000	500,000
Subscription agreement, number of common shares	15,000,000									15,000,000
Subscription agreement, number of Series C Preferred shares	5,000,000								5,000,000
Subscription agreement, common shares issuable upon conversion of preferred stock	15,000,000
Subscription agreement, number of common shares called by warrants	500,000								250,000	250,000
Exercise price of warrants	0.12
Warrant term	5 years
Interest rate		12.00%		12.00%
Initial term of note				12 months
Debt issued		500,000		500,000				25,000
Cash received for convertible note payable				125,000
Capital raise amount								$ 500,000

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2013

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

NOTE 9 - SUBSEQUENT EVENTS

On December 16, 2013, we announced signing of a distribution contract for the sale of hangover recovery shots in Japan. Over the next three years our product is to be distributed through up to 8,600 drug and food stores and sales are expected to reach over 10 million bottles. This is the largest distribution agreement yet internationally for the Company to date. We intend to start shipping containers to Japan in early 2014. The contract calls for one million bottles to be shipped in 2014, which would exceed all of our sales to date, followed by three million bottles in 2015, and six million in 2016.

On November 6, 2013, the Company reached an agreement with Fundable.com, an online portal, to raise up to $500,000 in 200,000 units sold at $2.50 per unit. Each unit consists of one share of Series D Preferred Stock and 100 five year warrants exercisable at $.05 per share upon a successful increase of the Company's authorized common shares to 500,000,000. Terms of the preferred stock are as follows:

Series D Preferred Stock

Of the 10,000,000 shares of the Company's authorized Preferred Stock, ($0.10 par value per share), 200,000 shares are designated as Series D Convertible Preferred Stock (the "Series D Preferred").  The holders of outstanding shares of Series D Preferred are entitled to notice of any shareholders' meeting and to vote as a single class with the common stock upon any matter submitted for approval by the holders of common stock, on an as-converted basis, as defined. Each share of Series D Preferred shall have one hundred votes per share. If any dividend or distribution is declared or paid by the Company on common stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series D Preferred will be entitled to participate with the holders of common stock in such dividend or distribution, as defined.

Additionally, upon liquidation, dissolution or winding up on the Company, the Series D Preferred shareholders are entitled to be paid together with the common shareholders on a pro-rata basis.  The Series D Preferred holders may convert such shares of Series D Preferred in whole or in part, at any time, or from time-to-time upon written notice to the Company subject to the terms set forth below. The Series D Preferred may, or shall, be converted into shares of the Company's authorized but unissued common stock at the option of the holder, at any time after the Company is able to successfully increase its authorized common shares to 500,000,000 each share of Series D Preferred shall be convertible into one hundred shares of the Company's common stock.  Additionally, The Company may automatically convert such shares six months after the increase in authorized shares.

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ACCRUED EXPENSES (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Mar. 01, 2013
ACCRUED EXPENSES [Abstract]
Accrued expenses	$ 6,520	$ 37,005
Salary	166,594	45,960
Accrued settlement costs - paid for in common stock	172,000	652,500
Accrued consulting costs - paid for in common stock		225,000	135,000
Accrued interest	17,498
Total accrued expenses	362,612	960,465
Shares issued for accrued settlement costs	4,500,000
Shares issued for accrued consulting costs	1,500,000
Consulting agreement, monthly fee	2,500	10,000
Consulting agreement, shares issuable	100,000	3,000,000
Consulting agreeement, warrants issuable	100,000
Consulting agreement, fair value	37,000
Consulting agreement, accrued expense	$ 37,000

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SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended	12 Months Ended	3 Months Ended	9 Months Ended				12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Trade Accounts Receivable [Member]	Dec. 31, 2012 Trade Accounts Receivable [Member]	Sep. 30, 2012 Net Revenue [Member]	Sep. 30, 2012 Net Revenue [Member]	Sep. 30, 2013 Major Customer One [Member] Trade Accounts Receivable [Member]	Sep. 30, 2013 Major Customer Two [Member] Trade Accounts Receivable [Member]	Sep. 30, 2013 Major Customer Three [Member] Trade Accounts Receivable [Member]	Dec. 31, 2012 Major Customer Three [Member] Trade Accounts Receivable [Member]	Sep. 30, 2013 Major Customer Four [Member] Trade Accounts Receivable [Member]	Dec. 31, 2012 Major Customer Four [Member] Trade Accounts Receivable [Member]
SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Allowance for doubtful accounts	$ 113,000		$ 113,000		$ 11,624
Sales incentives and discounts	6,000	7,400	12,000	17,200
Advertising expense	$ 1,000	$ 47,000	$ 101,000	$ 104,000
Antidilutive stock options, warrants and common shares	24,457,845	0	24,457,845	0
Antidilutive shares included	9,775,250		9,775,250
Significant Accounting Policies [Line Items]
Number of customers						4	2	1	1
Concentration percentage						84.00%	78.00%	44.00%	23.00%	26.00%	21.00%	19.00%	65.00%	18.00%	13.00%

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Dec. 19, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Entity Registrant Name	Hangover Joe's Holding Corp
Entity Central Index Key	0001388132
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		122,591,301

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DEBT (Details) (USD $)	0 Months Ended	1 Months Ended	9 Months Ended
	Sep. 24, 2013	Sep. 19, 2013	Sep. 30, 2013	Sep. 30, 2012	Nov. 06, 2013	Jan. 10, 2013	Dec. 31, 2012	Oct. 31, 2012
Inventory financing and factoring arrangements
Maximum financing amount				$ 250,000
Maximum financing percentage				80.00%				100.00%
Financing fee, percentage of purchase order amount								3.85%
Financing fee, percentage of receivables				2.50%
Additional fee, percent per day after remaining open for 30 days				0.084%				0.13%
Additional fee, annualized rate				30.70%				47.40%
Inventory financing payable							97,611
Revolving Credit Facility
Line of credit, maximum borrowing capacity						6,000,000
Line of credit, initial borrowing capacity						425,000
Line of credit, advance			56,000			425,000
Borrowings under revolving credit facility			481,263
Preferred shares issued for debt issuance costs			125,000
Value of peferred shares issued for debt issuance costs			125,000
Finders' fee, shares issued			194,954
Convertible preferred stock, liquidation preference			125,000
Interest rate			12.00%
Initial term of note			12 months
Debt issued			500,000		25,000
Proceeds from debt issuance, net of discount and costs	25,000	100,000	450,000
Debt conversion, price per share			$ 0.05
Conversion price, percent of stock price			70.00%
Number of trading days preceding any conversion			25
Beneficial conversion recorded on convertible note			31,735
Discount			$ 22,000