What changed in this filing

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Item 1. Business

2022-07-14 compared with 2021-07-06 · 30 added, 54 removed, 129 unchanged (39% of the section changed)

25 unchanged sentences

As used in this annual report on Form 10-K, the terms "we", "us" "our", the "Company" and "Alkaline" refer to The Alkaline Water Company Inc.

(a Nevada Corporation) and its five wholly owned subsidiaries:

(a Nevada Corporation) and its six wholly owned subsidiaries:

A88 Infused Beverage Division Inc.

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(a Nevada Corporation), A88 Infused Products Inc.

(a Nevada Corporation), The Clean Beverage Company Inc.

(a Nevada corporation), AWC Acquisition Company Inc.

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Its flagship product, Alkaline88®, is a leading premier alkaline water brand available in bulk and single-serve sizes along with eco-friendly aluminum packaging options.

With its innovative, state-of-the-art proprietary electrolysis process, Alkaline88® delivers perfect 8.8 pH balanced alkaline drinking water with trace minerals and electrolytes and boasts our trademarked label ‘Clean Beverage.’ Quickly being recognized as a growing lifestyle brand, Alkaline88® launched A88 Infused™ in 2019 to meet consumer demand for flavor-infused products.

A88 Infused™ flavored water is available in six unique all-natural flavors, with new flavors coming soon.

Additionally, in 2020, the Company launched A88 Infused Beverage Division Inc., which includes the Company’s CBD water and flavor-infused water.

For the Company’s topical and ingestible offerings, A88 Infused Products Inc.

includes both the Company’s lab-tested full-spectrum hemp salves, balms, lotions, essential oils, and bath salts, along with broad-spectrum hemp, powder packs, oil tinctures, capsules, and gummies.

under the brand name "A88CBD™".

Our hemp-derived CBD products are produced and sold in compliance with the Agriculture Improvement Act of 2018 (also known as the 2018 Farm Bill, Public Law 115-334).

Our bottled alkaline water product is presently available in over 75,000 stores in all 50 states, the District of Columbia, the Caribbean and in Mexico.

With its innovative, state-of-the-art proprietary electrolysis process, Alkaline88® delivers perfect 8.8 pH balanced alkaline drinking water with trace minerals and electrolytes and boasts our trademarked label 'Clean Beverage.' Quickly being recognized as a growing lifestyle brand, we launched A88 Infused Beverage Division Inc., which includes our CBD water and Alkaline88® Sports Drinks.

Our hemp-derived CBD water products are produced and sold in compliance with the Agriculture Improvement Act of 2018 (also known as the 2018 Farm Bill, Public Law 115-334).

Our bottled alkaline water product is presently available in over 75,000 stores in all 50 states, the District of Columbia, the Caribbean and in Mexico and Canada.

We distribute our product through several channels.

We sell through large national distributors (UNFI, KeHE, C&S, and Core-Mark), which together represent over 150,000 retail outlets.

We also sell our products directly to retail clients, including convenience stores, natural food products stores, large ethnic markets and national retailers and through Direct Store Distributors in selected markets, including Mahaska, Nevada Beverage, and Hensley, covering Nevada, Arizona, and Midwest region.

Combined, they service over 16,000 customers in five states.

We also sell our products directly to retail clients, including convenience stores, natural food products stores, large ethnic markets and national retailers and through Direct Store Distributors in selected markets, including Columbia Distributing, Mahaska, Nevada Beverage, and Hensley, covering Nevada, Arizona, Pacific Northwest and Midwest region.

Combined, they service over 25,000 customers in eight states.

Each one carries our full line of non-CBD waters.

Some examples of retail clients are:

Walmart, CVS, Rite-Aid Family Dollar, Food Lion, Albertson's/Safeway, Kroger companies, Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas', Stater Bros.

Walmart, CVS, Rite-Aid, Family Dollar, Food Lion, Albertson's/Safeway, Kroger companies, Sam's Club, Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas', Stater Bros.

Markets, Unified Grocers, Bristol Farms, Publix, Vallarta, Superior Foods, Ingles, Shaw's, Raley's, Harris Teeter, Festival Foods, HEB and Brookshire's.

The majority of our sales to retail clients are through brokers and distributors, however, sales to our larger retail clients are often direct to the client's own warehouse distribution network.

Our CBD products are presently available for purchase on our E-commerce websites, www.a88cbd.com and www.a88hemp.com, in addition to a growing number of brick and mortar retail locations.

Our full line of Alkaline88® bottled water products and sports drinks are presently available for purchase at www.alkaline88.com and www.thealkalinewaterco.com.

Our CBD water products are presently available for purchase on our CBD E-commerce website, www.a88cbd.com, in addition to a growing number of brick and mortar retail locations.

Our operating subsidiary, Alkaline 88, LLC, operates primarily as a marketing, distribution, and manufacturing company for our alkaline bottled water products.

It has entered into co-packing agreements with eight different bottling companies located in Virginia, Georgia, California, Texas, Nevada and Arizona to act as co-packers for our product.

It has entered into co-packing agreements with nine different bottling companies located in Virginia, Georgia, California, Texas, Wisconsin, Nevada and Arizona to act as co-packers for our product.

Our current capacity at all plants exceeds approximately $14.0 million per month wholesale.

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Our principal suppliers are Vav Plastics Inc., Amcor Inc., Smurfit, and Goodpac.

A88 Infused Beverage Division, Inc.

In August 2018, we formed A88 Infused Beverage Division, Inc., or "A88 Infused," a Nevada corporation and a wholly-owned subsidiary of our company.

A88 Infused's focus is brand extension and product innovations in the wellness water category.

We formed A88 Infused to meet what we believe is increasing consumer demand for enhanced and functional (value-added) beverages.

We expect A88 Infused to capitalize on this and potential consumer demand with the development and launch of new products focused on growing trends in the beverage space.

Our first infused water products were launched in 2019 and consist of A88 Infused's flavored water products, which are now available in Blood Orange, Lemon, Lemon-Lime, Peach Mango, Watermelon and Raspberry.

They are produced in Waco Texas at Waco Bottling.

Currently A88 Infused's flavored water products are on thousands of shelves nationwide in many of the same retailers that carry our flagship brand Alkaline88,including, 99 Cent Only ,Albertson (Randalls, Safeway), Associated Foods, Associated Wholesale Grocers, B&G Wholesale, Gelson’s Market, HEB , HY-VEE, Ingles, Save A Lot Super Store Industries, Supervalu, Wakefern, and national distributors UNFI and KEHE.

A88 Infused Products, Inc.

In September 2019, we formed A88 Infused Products, Inc., or "A88 Products," a Nevada corporation and a wholly-owned subsidiary of our company.

A88 Product's focus is brand extension and product innovations in the CBD infused products category, which include ingestibles and topical products.

For its ingestibles line, the A88™ Infused Beverage Division Inc.

currently produces CBD infused tinctures, gummies, fruit chews and capsules, and will produce CBD infused drinks, beverage shots, and powder packs.

For its topicals line, A88™ Infused Products Inc.

currently produces salves, balms, lotions, bath bombs, essential oils, and bath-salt all made with lab-tested full-spectrum hemp.

We formed A88 Products to meet what we believe is increasing consumer demand for a variety of CBD infused wellness products.

We expect A88 Products to capitalize on this and potential consumer demand with the development and launch of new products focused on growing trends in the space.

On February 20, 2020, A88 Products began selling its line of CBD infused topical products through ecommerce at www.a88cbd.com.

Currently, all of A88 Products’ CBD products are available for purchase on its E-commerce websites, www.a88cbd.com and www.a88hemp.com, various third party ecommerce sites, and a growing number of brick and mortar retail locations throughout the United States.

A88 Product's focus is brand extension and product innovations in the CBD infused products category.

We formed A88 Products to meet what we believe is increasing consumer demand for a variety of CBD infused beverage products.

During our fiscal year 2022, A88 Products began selling its line of Alkaline88®CBD infused bottled water through ecommerce at www.a88cbd.com.

Currently, A88 Products' Alkaline88®CBD infused bottled water products are available for purchase on its E-commerce website, www.a88cbd.com, various third party ecommerce sites, and a growing number of brick and mortar retail locations throughout the United States.

As of the date of this annual report, the FDA has not made a determination that the use of hemp extract in food is safe.

The FDA has evaluated Generally Recognized as Safe (GRAS) notices for four hemp seed-derived food ingredients and determined that the agency has no questions that those ingredients are GRAS under their intended conditions of use.

In the event the FDA issues appropriate regulations or guidance or determines that it has no questions that hemp extract is GRAS under intended conditions of use that would permit A88 Infused to market hemp extract in water without food additive approval, we expect to produce and sell A88CBD water as still water in bottles.

We may also decide to market Soothe™ in any states, districts or territories if applicable laws allow for such sale or if a supplier meets and complies with the FDA's GRAS regulations with respect to a self-certification regarding the safety and GRAS status of the use of hemp extract.

We expect to produce A88CBD water as a low calorie or no calorie, hemp extract-infused water in three flavors and 5 functional formulas (Relax, Revive, Recover etc.).

We currently produce Alkaline88® CBD infused bottled water as a low calorie hemp extract-infused water in five flavors and 5 functional formulas (Resistance, Rest, Relax, Refresh, and Reenergize).

We may change the composition of our planned hemp-extract-infused product as necessary to comply with federal, state or local laws, regulations or guidance.

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We continually meet, train, and go on sales call with our national retail broker network in order to take advantage of the momentum currently being created by their efforts and sell into clubs stores and big box retailers.

New brokers will also be added in the on-premise and international sales channels to support initiatives that began in Fiscal 2020 and 2021.

New brokers will also be added in the on-premise and international sales channels to support initiatives that began in Fiscal 2021.

We anticipate a considerable amount of travel and ongoing expenses to be incurred as part of this expansion.

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and (ii) A88 Infused:

we expect to add three to five new co-packer facilities strategically located to meet anticipated volumes by product type and future growth objectives.

(iii) A88 Infused Products Inc:

we expect to add three new co-packer facilities strategically located to meet anticipated volumes by product type and future growth objectives

we expect to add one to three new co-packer facilities strategically located to meet anticipated volumes by product type and future growth objectives.

Expand Retail Distribution - We continue to expand our retail presence through securing new customers and growing the number of SKUs of our products carried by existing customers.

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Expand International Distribution - We anticipate adding new brokers, distributors and co-packers to support our international sales initiatives in Canada, Mexico, the Caribbean and potential parts of Asia

Addition of Support Staff and Officers - In order to support expansion efforts and to continue the training and support of our broker network, we anticipate that we will need to hire approximately five to 10 more people on the corporate level for the specific purpose of supporting and overseeing e-commerce, hospitality/on-premise sales, DSD sales, expanded manufacturing, distributor and retailer relationships, and marketing to support utilizing our brand ambassador.

We continue to seek and interview candidates to fill our growing need for additional staffing

E-commerce Expansion:

We will hire personnel to head up and support and aggressive ecommerce expansion of our flagship products and other functional beverages.

This will be supported with an aggressive marketing plan.

Traditional Marketing Program:

With the May 2021 signing of our partnership with Shaquille O’Neal and Authentic Brand Group we will embark on our first ever national marketing plan.

We anticipate adding a Chief Marketing Officer to work in conjunction with our agencies in establishing sales and branding objectives over the three year term of the brand ambassador agreement.

Capital Considerations - Our business plan can be adjusted based on the available capital to the business.

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We will also reimburse the Agent for certain expenses incurred in connection with the Sales Agreement.

We believe cash on hand, plus anticipated warrant exercises, our line of credit and the Sales Agreement will adequately fund our current planned operations and capital needs for the next 12 months.

However, if our current plans change or are accelerated or we choose increase our production capacity, we may seek to sell additional equity or debt securities or obtain additional credit facilities, including seeking investments from strategic investors.

As of March 31, 2022, we sold a total of 281,459 shares of our common stock for aggregate gross proceeds of $260,844 through the Agent under the Sales Agreement.

Subsequent to March 31, 2022, we sold a total of 750,240 shares of our common stock for aggregate gross proceeds of $631.203 through the Agent under the Sales Agreement.

• The Company’s ability to operating as a going concern is dependent on obtaining adequate capital to fund operating losses until the Company becomes profitable.

The Company has initiated a cost-reduction strategy along with its cash on hand, plus anticipated warrant exercises and debt settlements, our line of credit and the Sales Agreement is planned to fund our current planned operations and capital needs.

However, if our current plans change or are accelerated or we choose to increase our production capacity, we may seek to sell additional equity or debt securities or obtain additional credit facilities, including seeking investments from strategic investors.

The sale of additional equity securities will result in dilution to our stockholders.

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We deliver directly to the DCs of our large national and regional grocery, drug, and specialty retailers.

These retailers include Walmart, CVS, Family Dollar, Albertson's/Safeway, Kroger companies, and regional grocery chains such as Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas', Bristol Farms, Stater Brothers, Unified Grocers, Publix, Vallarta, Superior Foods, Ingles, Shaw's, Raley's Harris Teeter, Festival Foods, Brookshire's, HEB and other companies throughout the United States.

These retailers include Walmart, Sam's Club, CVS, Family Dollar, Albertson's/Safeway, Kroger companies, and regional grocery chains such as Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas', Bristol Farms, Stater Brothers, Unified Grocers, Publix, Vallarta, Superior Foods, Ingles, Shaw's, Raley's Harris Teeter, Festival Foods, Brookshire's, HEB and other companies throughout the United States.

In total we are now in more than 70% of the top 75 grocery retailers in the United States.

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We anticipate that our initial marketing thrust will be to support the retailers and distribution network with point of sales displays and other marketing materials, strategically adding an extensive public relations program and other marketing as the markets dictate.

We have engaged a sales and marketing agency to assist our company in all aspects of our marketing, trade promotion, public relations and brand development.

Their expertise in all aspects of consumer goods brand development and marketing is expected to help us meet the growing consumer demand for both our flagship Alkaline88 ® product and our A88CBD™ product line.

We have hired a chief marketing officer and built an entire in house marketing team to lead our company in all aspects of our marketing, trade promotion, public relations and brand development.

The commercial retail beverage industry, and in particular its non-alcoholic beverage segment, is highly competitive.

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These rights are protected through the acquisition of patents and trademark registrations, the maintenance of trade secrets, the development of trade dress, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.

The trademark for Alkaline88 ® has been registered in the USA, Canada, Hong Kong, and has been applied for in China.

Other trade marks that have been registered and are currently being used in our marketing efforts include Clean Beverage ® , Smooth Hydration ® , Ionized H20 ® , A88 ® , Hello Hydration ® , A88 Infused ® , and Refreshingly Different CBD ® .

The trademark for Alkaline88 ® has been registered in the USA, Canada, Mexico, United Kingdom and Hong Kong.

Other trademarks that have been registered and are currently being used in our marketing efforts include Clean Beverage ® , Smooth Hydration ® , Ionized H20 ® , A88 ® , Hello Hydration ® , and A88 Infused.

Any third-party bottling facility that we may choose to utilize in the future and any other such operations will be subject to various environmental protection statutes and regulations, including those relating to the use of water resources and the discharge of wastewater.

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Compliance with these provisions has not had, and we do not expect such compliance to have, any material adverse effect on our capital expenditures, net income or competitive position.

In addition to Richard A.

Wright, who is our president, chief executive officer and director, and David A.

In addition to Frank Lazaran, who is our president, chief executive officer and director, and David A.

Guarino, who is our chief financial officer, secretary, treasurer and director, we currently employ 43 full time employees and 2 part-time employees.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business