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<p style="margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font: 14pt Times New Roman, Times, Serif"><b>UNITED
STATES</b>&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font: 14pt Times New Roman, Times, Serif"><b>SECURITIES
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font: 12pt Times New Roman, Times, Serif"><b>WASHINGTON,
D.C. 20549</b></span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white">&#160;</p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">(Ma<span style="font-family: Times New Roman, Times, Serif">rk
One)</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">For
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Securities
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

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<tr style="vertical-align: bottom">
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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.&#160;<span id="xdx_90F_edei--EntityCurrentReportingStatus_c20210101__20210930_zDSLF8n4jX43"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric></span>&#160;&#9746;&#160;No&#160;&#9744;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).&#160;<span id="xdx_90D_edei--EntityInteractiveDataCurrent_c20210101__20210930_zAMCnWbm1txg"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric></span>&#160;&#9746;&#160;No&#160;&#9744;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated filer,&#8221; &#8220;smaller
reporting company,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="padding: 0; width: 46%; text-align: left; line-height: 107%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: black">Large
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    <td style="padding: 0; width: 11%; line-height: 107%; text-indent: 0; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif; color: black">&#9744;</span></td>
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    filer&#160;</span></td>
    <td style="padding: 0; width: 4%; line-height: 107%; text-indent: 0; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif; color: black">&#9744;</span></td></tr>
<tr style="vertical-align: top">
    <td style="padding: 0; line-height: 107%; text-indent: 0; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif; color: black"><span id="xdx_90D_edei--EntityFilerCategory_c20210101__20210930_zgA3r7VPahu3"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory">Non-accelerated filer</ix:nonNumeric></span>&#160;</span></td>
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    <td style="padding: 0; text-align: left; line-height: 107%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: black">Smaller
    reporting company&#160;</span></td>
    <td style="padding: 0; line-height: 107%; text-indent: 0; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif; color: black"><span id="xdx_90F_edei--EntitySmallBusiness_c20210101__20210930_zIfgzA1JYcMd"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" format="ixt:booleantrue" name="dei:EntitySmallBusiness">&#9746;</ix:nonNumeric></span></span></td></tr>
<tr style="vertical-align: top">
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    growth company</span></td>
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    <td style="padding: 0; text-align: left; line-height: 107%; text-indent: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="padding: 0; line-height: 107%; text-indent: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&#160;<span id="xdx_90B_edei--EntityExTransitionPeriod_c20210101__20210930_z701zDh4ktfg"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" format="ixt:booleanfalse" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></span></span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes&#160;&#9744;&#160;<span id="xdx_906_edei--EntityShellCompany_c20210101__20210930_zzgXIMTYdrk"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" format="ixt:booleanfalse" name="dei:EntityShellCompany">No</ix:nonNumeric></span>&#160;&#9746;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">The
number of shares of the issuer&#8217;s common stock, par value $0.00001 per share, outstanding as of November 15, 2021 was&#160;<span style="background-color: white"><span id="xdx_903_edei--EntityCommonStockSharesOutstanding_iI_c20211115_zcTcAvfe391f"><ix:nonFraction name="dei:EntityCommonStockSharesOutstanding" contextRef="AsOf2021-11-15" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">960,236,003</ix:nonFraction></span></span>.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="display: none"></span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>

<!-- Field: Page; Sequence: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 12pt; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr><td style="text-align: center; width: 100%">&#160;</td></tr></table></div>
    <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr><td style="text-align: center; width: 100%">&#160;</td></tr></table></div>
    <!-- Field: /Page -->

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>INDEX TO FORM 10-Q FILING</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>FOR THE QUARTER ENDED SEPTEMBER 30, 2021</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>TABLE OF CONTENTS</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="border-bottom: black 1pt solid; padding: 0pt; width: 10%; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="border-bottom: black 1pt solid; padding: 0pt; width: 1%; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="border-bottom: black 1pt solid; padding: 0pt; width: 83%; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="border-bottom: black 1pt solid; padding: 0pt; width: 1%; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="border-bottom: black 1pt solid; padding: 0pt; width: 5%; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Page</b></span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b><a href="#c_002">PART I</a></b></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b><a href="#c_002">FINANCIAL INFORMATION</a></b>&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">F-1</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 1.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#c_001">Financial Statements</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">1</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_001">Unaudited Consolidated Balance Sheet as of September 30, 2021 and audited Balance sheet as of December 31, 2020</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">1</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_002">Unaudited Consolidated Statements of Loss for the three months and nine months ending September 30, 2021 and 2020</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">2</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_003">Unaudited Consolidated Statements of Stockholders&#8217; Deficit for the nine months ended September 30, 2021 and 2020</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">3</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_004">Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">4</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_005">Notes to the Unaudited Consolidated Financial Statements (Unaudited)</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt">F-<span style="font: 10pt Times New Roman, Times, Serif">5</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 2.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_001">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">45</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 3.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_002">Quantitative and Qualitative Disclosures about Market Risk</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">67</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 4.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_003">Controls and Procedures</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">67</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b><a href="#a_004">PART II</a></b></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b><a href="#a_004">OTHER INFORMATION</a></b></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 1.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_005">Legal Proceedings</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 1A.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_006">Risk Factors</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 2.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_007">Unregistered Sales of Equity Securities and Use of Proceeds</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 3.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_008">Defaults upon Senior Securities</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 4.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_009">Mine Safety Disclosures</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 5.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_010">Other Information</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">68</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b>Item 6.</b></span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#a_011">Exhibits</a></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">69</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td colspan="3" style="padding: 0pt; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif"><b><a href="#a_012">SIGNATURES</a></b></span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0pt; text-align: right; text-indent: 0pt"><span style="font: 10pt Times New Roman, Times, Serif">73</span></td></tr>
</table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt"><b><span id="c_002"></span>PART I - FINANCIAL
INFORMATION</b></span></p>

<p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-size: 10pt"><b><span id="c_001"></span>Item 1. Financial Statements&#160;</b></span></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt">&#160;</span>&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>INDEX TO FINANCIAL STATEMENTS</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="vertical-align: top; width: 90%; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>Financial Statements of Kona Gold Beverage, Inc. (formerly known as Kona Gold Solutions, Inc.)</b></span></td>
    <td style="vertical-align: bottom; width: 10%; text-align: right; line-height: 107%">&#160;</td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%">&#160;</td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%">&#160;</td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_001">Unaudited Consolidated Balance Sheet as of September 30, 2021 and audited Balance sheet as of December 31, 2020</a></span></td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">F-1</span></td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_002">Unaudited Consolidated Statements of Loss for the three months and nine months ending September 30, 2021 and 2020</a></span></td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">F-2</span></td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_003">Unaudited Consolidated Statements of Stockholders&#8217; Deficit for the nine months ended September 30, 2021 and 2020</a></span></td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%">F-<span style="font: 10pt Times New Roman, Times, Serif">3</span></td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_004">Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020</a></span></td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">F-4</span></td></tr>
<tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="#b_005">Notes to the Consolidated Financial Statements</a></span></td>
    <td style="vertical-align: bottom; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">F-5</span></td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></p>

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    <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr><td style="text-align: center; width: 100%">&#160;</td></tr></table></div>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><span id="b_001"></span><b>&#160;</b></p>

<table cellpadding="0" cellspacing="0" id="xdx_304_111_zxcuyA8aWcrg" summary="xdx: Statement - Unaudited Consolidated Balance Sheet" style="border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-top: 0; padding-right: 0; padding-bottom: 0; text-align: left">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td><td id="xdx_49C_20210930_zpqrcfdTN527" style="font: 10pt Times New Roman, Times, Serif; text-align: right">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td><td id="xdx_494_20201231" style="font: 10pt Times New Roman, Times, Serif; text-align: right">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">Unaudited</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">Audited</span></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">Nine
    Months Ended</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">Year
    Ended</span></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">September
    30,</span></td><td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">December
    31,</span></td></tr>
<tr id="xdx_403_eus-gaap--AssetsAbstract_iB_zukXaihPHgze" style="vertical-align: bottom">
    <td style="font: italic bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">ASSETS</span></td><td style="font: italic bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: italic bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2021</span></td><td style="font: italic bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font: italic bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2020</span></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="9" style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40F_eus-gaap--AssetsCurrentAbstract_i01B_zs1lfoahnbej" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">CURRENT
    ASSETS</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_404_eus-gaap--CashAndCashEquivalentsAtCarryingValue_i02I_maCz1oT_zgkhXun1zBgh" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; width: 56%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Cash
    and cash equivalents</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CashAndCashEquivalentsAtCarryingValue" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">546,528</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CashAndCashEquivalentsAtCarryingValue" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">113,168</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_406_eus-gaap--AccountsReceivableNetCurrent_i02I_maCz1oT_zdhHirV3TQp1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accounts
    receivable, net of allowance for doubtful accounts of $<span id="xdx_90B_eus-gaap--AllowanceForDoubtfulAccountsReceivable_c20210930_pp0p0" title="Allowance for doubtful accounts"><span id="xdx_90E_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20210930_zkIfqtztEM0j" title="Allowance for doubtful accounts"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,709</ix:nonFraction></ix:nonFraction></span></span> and $<span id="xdx_906_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iI_pp0p0_c20201231_zKPk2H9AOgc7" title="Allowance for doubtful accounts"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivable" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,967</ix:nonFraction></span>, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AccountsReceivableNetCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">63,715</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0048">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_404_eus-gaap--OtherReceivablesNetCurrent_i02I_maCz1oT_zxAyDyXrRg6k" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Other
    receivables</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherReceivablesNetCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">14,876</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherReceivablesNetCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">14,876</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40D_eus-gaap--InventoryNet_i02I_maCz1oT_zWBOYcYMFJjf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt"><span style="font: 10pt Times New Roman, Times, Serif">Inventory</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">866,613</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">660,504</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_401_eus-gaap--PrepaidExpenseCurrent_i02I_maCz1oT_zlRElzKoo7lj" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt"><span style="font: 10pt Times New Roman, Times, Serif">Prepaids</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PrepaidExpenseCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">62,200</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0063">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40E_eus-gaap--OtherAssetsCurrent_i02I_maCz1oT_zSbVQbQQckqe" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Other
    current assets</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherAssetsCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">6,517</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherAssetsCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,572</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40B_eus-gaap--AssetsCurrent_i02TI_mtCz1oT_maCzcuE_zEPZlquDK5xe" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 30pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    current assets</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AssetsCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,560,449</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AssetsCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">794,120</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_403_eus-gaap--AssetsNoncurrentAbstract_i01B_zBOhECRDcfj4" style="vertical-align: bottom; background-color: White">
    <td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">NON-CURRENT
    ASSETS</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_401_eus-gaap--PropertyPlantAndEquipmentNet_i02I_maCzK8k_zDv2m5FPzaq2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Property,
    plant and equipment, net</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">281,029</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentNet" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">167,872</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_402_eus-gaap--OperatingLeaseRightOfUseAsset_i02I_maCzK8k_zyMSM3NHWEgf" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Right-of-use
    asset, net</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAsset" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,219,103</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAsset" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">912,993</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--FiniteLivedIntangibleAssetsNet_i02I_maCzK8k_zCQTxal1ONRf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Intangible
    property, net</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">74,744</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsNet" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">69,488</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--Goodwill_i02I_d0_maCzK8k_zIFtcMyx3s65" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt"><span style="font: 10pt Times New Roman, Times, Serif">Goodwill</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,275,938</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2020-12-31" format="ixt:zerodash" decimals="0" unitRef="USD">&#8212;</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40B_eus-gaap--NotesAndLoansReceivableNetCurrent_i02I_maCzK8k_z4MpmJFPXfJb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note
    receivable, net of allowance $<span id="xdx_90F_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iI_pp0p0_c20210930_zUb8sfdUwQej" title="Allowance for note receivable"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span> and $<span id="xdx_903_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iI_pp0p0_do_c20201231_zP0uoghbpUL3" title="Allowance for note receivable"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">0</ix:nonFraction></span>, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0086">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0087">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40C_eus-gaap--DepositAssets_i02I_maCzK8k_zgcxNsnapGd9" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt"><span style="font: 10pt Times New Roman, Times, Serif">Deposit</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:DepositAssets" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">12,750</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:DepositAssets" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">6,500</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_408_eus-gaap--AssetsNoncurrent_i02TI_mtCzK8k_maCzcuE_zz0FU2wY7xT3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 30pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    non-current assets</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AssetsNoncurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,863,564</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AssetsNoncurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,156,853</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--Assets_i02TI_mtCzcuE_zCaFIVbpxVNg" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 40pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    assets</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Assets" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">4,424,013</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Assets" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,950,973</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40C_eus-gaap--LiabilitiesAndStockholdersEquityAbstract_iB" style="vertical-align: bottom; background-color: White">
    <td style="font: italic bold 10pt Times New Roman, Times, Serif; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">LIABILITIES
    AND STOCKHOLDERS&#8217; DEFICIT</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_400_eus-gaap--LiabilitiesCurrentAbstract_i01B_zbgPRFTOvXwd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">CURRENT
    LIABILITIES</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--AccountsPayableCurrent_i02I_maCzQGu_z6MwDNzeQU73" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accounts
    payable</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AccountsPayableCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">206,123</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AccountsPayableCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">208,599</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_406_ecustom--AmountsOwedToCustomers_i02I_maCzQGu_zmsI0Pkq2O37" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Amounts
    owed to customers</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0111">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:AmountsOwedToCustomers" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">10,508</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_404_ecustom--CreditCardPayables_i02I_maCzQGu_zAUgA26Rqulf" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Credit
    card payables</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:CreditCardPayables" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">4,009</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:CreditCardPayables" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">19,469</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40D_eus-gaap--NotesPayableCurrent_i02I_maCzQGu_z13X51ZbZ9K" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Current
    note payable</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,994</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0118">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--NotesPayableRelatedPartiesClassifiedCurrent_i02I_maCzQGu_zwwDcJyXkWMl" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Current
    note payable - related party</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,500</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">12,000</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_407_eus-gaap--OperatingLeaseLiabilityCurrent_i02I_maCzQGu_z4wc9r9NkXSg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Current
    lease liability</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseLiabilityCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">41,806</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseLiabilityCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">149,407</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40F_eus-gaap--ConvertibleDebtCurrent_i02I_maCzQGu_zmxBgHi7kTG6" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Convertible
    debt</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:ConvertibleDebtCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,400,000</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:ConvertibleDebtCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">900,000.00</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_406_eus-gaap--DerivativeLiabilitiesCurrent_i02I_maCzQGu_zBNEfZQ4zU5b" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Derivative
    liability</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:DerivativeLiabilitiesCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,225,741</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:DerivativeLiabilitiesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">361,152.00</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_408_eus-gaap--EmployeeRelatedLiabilitiesCurrent_i02I_maCzQGu_zKbf80bsERS6" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accrued
    compensation</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:EmployeeRelatedLiabilitiesCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">389,583</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:EmployeeRelatedLiabilitiesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">257,500.00</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_405_ecustom--AccruedStockCompensation_i02I_maCzQGu_zGzXLS6Ilg2j" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accrued
    stock compensation</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:AccruedStockCompensation" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,386,497</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:AccruedStockCompensation" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,386,497</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_400_eus-gaap--AccruedLiabilitiesCurrent_i02I_maCzQGu_zxQ6o6r9u7ug" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accrued
    liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AccruedLiabilitiesCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">183,757</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AccruedLiabilitiesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">81,624</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40B_eus-gaap--LiabilitiesCurrent_i02TI_mtCzQGu_maCzwNf_zVJDl15wWpjg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 30pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    current liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LiabilitiesCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,841,010</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LiabilitiesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">3,386,756</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--LiabilitiesNoncurrentAbstract_i01B_zJamUZSh8nya" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: bold 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">NON-CURRENT
    LIABILITIES</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--LineOfCredit_i02I_maCzwNf_ztKJBhlSMbn4" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt"><span style="font: 10pt Times New Roman, Times, Serif">Line
    of credit</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">198,470</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">398,470</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40E_ecustom--LineOfCreditRelatedParty_i02I_maCzwNf_z1tdX87Qlfy8" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Line
    of credit - related party</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:LineOfCreditRelatedParty" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,478,151</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:LineOfCreditRelatedParty" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,495,151</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40F_eus-gaap--NotesPayableRelatedPartiesNoncurrent_i02I_maCzwNf_zW0Hn3ShPkSd" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note
    payable - related party, net of current</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesNoncurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">53,500</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesNoncurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">56,000</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--LongTermNotesPayable_i02I_maCzwNf_zbh6QvJiRGM7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note
    payable - acquisition</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LongTermNotesPayable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">590,418</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0157">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--NotesPayableToBankNoncurrent_i02I_maCzwNf_zigYhJRL9sUl" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note
    payable</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesPayableToBankNoncurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">32,769</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0160">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_408_eus-gaap--OtherNotesPayable_i02I_maCzwNf_zrwJBQSS3knf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">PPP
    note payable</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherNotesPayable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">117,487</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OtherNotesPayable" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">95,161</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_401_eus-gaap--OperatingLeaseLiabilityNoncurrent_i02I_maCzwNf_z3be2etbUoui" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Lease
    liability, net of current</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseLiabilityNoncurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,177,297</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:OperatingLeaseLiabilityNoncurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">763,586</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--Liabilities_i02TI_mtCzwNf_maLASEzm9C_z3qQHegGhdh3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 30pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    liabillities</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Liabilities" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">9,489,102</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Liabilities" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">6,195,124</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_407_eus-gaap--CommitmentsAndContingencies_i02I_maLASEzm9C_z50XhS6Vjkci" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">COMMITMENTS
    AND CONTINGENCIES (NOTE 13)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_407_eus-gaap--StockholdersEquityAbstract_iB" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">STOCKHOLDERS&#8217;
    DEFICIT</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Preferred
    Stock Series A, $<span id="xdx_90E_eus-gaap--PreferredStockParOrStatedValuePerShare_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_pdd" title="Preferred Stock, par value"><span id="xdx_908_eus-gaap--PreferredStockParOrStatedValuePerShare_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_pdd" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesAPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesAPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> par value, <span id="xdx_905_eus-gaap--PreferredStockSharesAuthorized_iI_do_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_zw8Qk1HwuC7i" title="Preferred Stock, shares authorised"><span id="xdx_901_eus-gaap--PreferredStockSharesAuthorized_iI_do_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_zZqzBIG1YUMc" title="Preferred Stock, shares authorised"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></ix:nonFraction></span></span> shares authorized, <span id="xdx_900_eus-gaap--PreferredStockSharesIssued_iI_do_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_znqto5FX7aY9" title="Preferred Stock, shares issued"><span id="xdx_90C_eus-gaap--PreferredStockSharesOutstanding_iI_do_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_zf0w5cGJmTQa" title="Preferred Stock, shares outstanding"><span id="xdx_90B_eus-gaap--PreferredStockSharesIssued_iI_do_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_zNNBM0DmtIK1" title="Preferred Stock, shares issued"><span id="xdx_904_eus-gaap--PreferredStockSharesOutstanding_iI_do_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_z4JMGwXmzcV6" title="Preferred Stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesAPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span> issued, and outstanding, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_989_eus-gaap--PreferredStockValue_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0193">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_983_eus-gaap--PreferredStockValue_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0195">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Preferred
    Stock Series B, $<span id="xdx_900_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zOxO0Yp3Bqq" title="Preferred Stock, par value"><span id="xdx_904_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zSWa8EFe5koj" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> par value, <span id="xdx_90E_eus-gaap--PreferredStockSharesAuthorized_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pdd" title="Preferred Stock, shares authorised"><span id="xdx_907_eus-gaap--PreferredStockSharesAuthorized_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pdd" title="Preferred Stock, shares authorised"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,200,000</ix:nonFraction></ix:nonFraction></span></span> shares authorized, <span id="xdx_90B_eus-gaap--PreferredStockSharesIssued_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_ztUM4LxVxNhf" title="Preferred Stock, shares issued"><span id="xdx_907_eus-gaap--PreferredStockSharesOutstanding_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pdd" title="Preferred Stock, shares outstanding"><span id="xdx_900_eus-gaap--PreferredStockSharesIssued_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pdd" title="Preferred Stock, shares issued"><span id="xdx_901_eus-gaap--PreferredStockSharesOutstanding_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pdd" title="Preferred Stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">488,000</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span> issued and outstanding, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_988_eus-gaap--PreferredStockValue_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PreferredStockValue" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_982_eus-gaap--PreferredStockValue_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PreferredStockValue" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Preferred
Stock Series C, $</span><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_909_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zysGSOjSBso4" title="Preferred Stock, par value"><span id="xdx_909_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_z4qzy8om9ROd" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span></span>
<span style="font: 10pt Times New Roman, Times, Serif">par value, </span><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_903_eus-gaap--PreferredStockSharesAuthorized_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zzj6pPfrZZX1" title="Preferred stock, shares authorized"><span id="xdx_90E_eus-gaap--PreferredStockSharesAuthorized_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zJUThW6Ai749" title="Preferred stock, shares authorized"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">250</ix:nonFraction></ix:nonFraction></span></span>
shares authorized, </span><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_908_eus-gaap--PreferredStockSharesIssued_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zkBOQTm6qeYe" title="Preferred stock, shares issued"><span id="xdx_900_eus-gaap--PreferredStockSharesOutstanding_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zWBivdqQOjwe" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></ix:nonFraction></span></span></span>
<span style="font: 10pt Times New Roman, Times, Serif">and </span><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_90B_eus-gaap--PreferredStockSharesIssued_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zlIXSlDNwOY5" title="Preferred stock, shares issued"><span id="xdx_908_eus-gaap--PreferredStockSharesIssued_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zMxpPPMXAcUk" title="Preferred stock, shares issued"><span id="xdx_90D_eus-gaap--PreferredStockSharesOutstanding_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zpBL7RoYZFoi" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">140</ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span>
<span style="font: 10pt Times New Roman, Times, Serif">issued, and outstanding, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_98B_eus-gaap--PreferredStockValue_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0235">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_98D_eus-gaap--PreferredStockValue_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0237">&#8212;</span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Preferred
    Stock Series D, $<span id="xdx_90C_eus-gaap--PreferredStockParOrStatedValuePerShare_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, par value"><span id="xdx_90D_eus-gaap--PreferredStockParOrStatedValuePerShare_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> par value, <span id="xdx_90C_eus-gaap--PreferredStockSharesAuthorized_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares authorised"><span id="xdx_90A_eus-gaap--PreferredStockSharesAuthorized_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares authorised"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">500,000</ix:nonFraction></ix:nonFraction></span></span> shares authorized, <span id="xdx_909_eus-gaap--PreferredStockSharesIssued_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares issued"><span id="xdx_909_eus-gaap--PreferredStockSharesOutstanding_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares outstanding"><span id="xdx_902_eus-gaap--PreferredStockSharesIssued_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares issued"><span id="xdx_903_eus-gaap--PreferredStockSharesOutstanding_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pdd" title="Preferred Stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">500,000</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span> issued, and outstanding, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_98A_eus-gaap--PreferredStockValue_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PreferredStockValue" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_98C_eus-gaap--PreferredStockValue_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_pp0p0" title="Preferred Stock, Value, Issued" style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:PreferredStockValue" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_408_eus-gaap--CommonStockValue_iI_maCzrj4_zS3ynNFubQQl" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Common
    Stock, $<span id="xdx_905_eus-gaap--CommonStockParOrStatedValuePerShare_c20210930_pdd" title="Common Stock, par value"><span id="xdx_90F_eus-gaap--CommonStockParOrStatedValuePerShare_c20201231_pdd" title="Common Stock, par value"><ix:nonFraction name="us-gaap:CommonStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:CommonStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> par value, <span id="xdx_902_eus-gaap--CommonStockSharesAuthorized_c20210930_pdd" title="Common Stock, shares authorised"><span id="xdx_90B_eus-gaap--CommonStockSharesAuthorized_c20201231_pdd" title="Common Stock, shares authorised"><ix:nonFraction name="us-gaap:CommonStockSharesAuthorized" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesAuthorized" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,500,000,000</ix:nonFraction></ix:nonFraction></span></span> authorized, <span id="xdx_90B_eus-gaap--CommonStockSharesIssued_c20210930_pdd" title="Common Stock, shares issued"><span id="xdx_90C_eus-gaap--CommonStockSharesOutstanding_c20210930_pdd" title="Common Stock, shares outstanding"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">883,068,249</ix:nonFraction></ix:nonFraction></span></span>, and <span id="xdx_900_eus-gaap--CommonStockSharesIssued_c20201231_pdd" title="Common Stock, shares issued"><span id="xdx_903_eus-gaap--CommonStockSharesOutstanding_c20201231_pdd" title="Common Stock, shares outstanding"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">786,308,041</ix:nonFraction></ix:nonFraction></span></span>, issued and outstanding, respectively</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CommonStockValue" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">8,831</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CommonStockValue" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">7,863</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_ecustom--AdditionalPaidinCapitalWarrants_iI_maCzrj4_zCCN3eUlRssa" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Additional
    paid-in capital - warrants</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:AdditionalPaidinCapitalWarrants" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,027,691</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:AdditionalPaidinCapitalWarrants" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">281,565</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--AdditionalPaidInCapital_iI_maCzrj4_z6U2lCmnN5pg" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Additional
    paid-in capital</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AdditionalPaidInCapital" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">6,601,818</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:AdditionalPaidInCapital" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">4,746,447</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_402_eus-gaap--RetainedEarningsAccumulatedDeficit_iI_maCzrj4_zK5lk78xx79l" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Accumulated
    deficit</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:RetainedEarningsAccumulatedDeficit" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">13,703,438</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:RetainedEarningsAccumulatedDeficit" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">9,280,036</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_40B_eus-gaap--StockholdersEquity_iTI_pp0p0_mtCzrj4_maLASEzm9C_z0PbPpZehTcd" style="vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 30pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    stockholders&#8217; deficit</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">5,065,089</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">4,244,151</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_402_eus-gaap--LiabilitiesAndStockholdersEquity_iTI_pp0p0_mtLASEzm9C_zY4nJmI3eCE" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0 0 0 40pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Total
    liabilities and stockholders&#8217; deficit</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LiabilitiesAndStockholdersEquity" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">4,424,013</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LiabilitiesAndStockholdersEquity" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,950,973</ix:nonFraction></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b></b></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><span id="b_002"></span>&#160;</b></p>

<table cellpadding="0" cellspacing="0" id="xdx_30A_113_zIow8O7TUah2" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF INCOME (Unaudited)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_49B_20210701_20210930" style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_49E_20200701__20200930_zxKVo8G3PxZf" style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_495_20210101_20210930" style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td id="xdx_493_20200101_20200930" style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="7" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">THREE
    MONTHS ENDED</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="7" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">NINE
    MONTHS ENDED</span></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="7" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">September
    30,</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="7" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">September
    30,</span></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2021</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2020</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2021</span></td><td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">2020</span></td></tr>
<tr id="xdx_402_eus-gaap--Revenues_maCzsJN_zH9CZXfroFl5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">REVENUES,
    NET OF SALES, RETURNS, AND ALLOWANCES OF $<span id="xdx_909_ecustom--AllowenceForNetOfSales_pp0p0_c20210701__20210930_z4ToerlCxaNc"><ix:nonFraction name="kgkg:AllowenceForNetOfSales" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">16,599</ix:nonFraction></span> AND $<span id="xdx_903_ecustom--AllowenceForNetOfSales_pp0p0_c20200701__20200930_z6FFYnkfIm7f"><ix:nonFraction name="kgkg:AllowenceForNetOfSales" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">6,600</ix:nonFraction></span>; and $<span id="xdx_903_ecustom--AllowenceForNetOfSales_c20210101__20210930_pp0p0" title="Allowence for net of sales"><ix:nonFraction name="kgkg:AllowenceForNetOfSales" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">61,041</ix:nonFraction></span> AND $<span id="xdx_901_ecustom--AllowenceForNetOfSales_pp0p0_c20200101__20200930_zCQ4B7IOJpy1"><ix:nonFraction name="kgkg:AllowenceForNetOfSales" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">30,655</ix:nonFraction></span>, RESPECTIVELY</span></td><td style="width: 3%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="width: 10%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">312,709</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="width: 3%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="width: 10%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">741,812</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_402_eus-gaap--CostOfRevenue_msCzsJN_z798FtDqhcJi" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">COST
    OF REVENUES</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CostOfRevenue" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">442,766</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CostOfRevenue" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">222,111</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CostOfRevenue" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,443,727</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:CostOfRevenue" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">523,774</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_407_eus-gaap--GrossProfit_iT_mtCzsJN_maCzh8Y_z4aWaRdGTTHi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Gross
    profit</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:GrossProfit" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">102,609</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:GrossProfit" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">90,598</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:GrossProfit" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">355,272</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:GrossProfit" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">218,038</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_403_eus-gaap--OperatingExpensesAbstract_iB_zCmESrOcJCjh" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">OPERATING
    EXPENSES</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40E_eus-gaap--SellingGeneralAndAdministrativeExpense_i01_msCzh8Y_z2PYHKXkJl41" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Selling,
    general and administrative expenses</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:SellingGeneralAndAdministrativeExpense" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">756,110</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:SellingGeneralAndAdministrativeExpense" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">500,233</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:SellingGeneralAndAdministrativeExpense" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,968,841</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:SellingGeneralAndAdministrativeExpense" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,840,004</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40E_eus-gaap--OperatingIncomeLoss_i01T_mtCzh8Y_maCz5lt_zKIxbegWJXW" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Income
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    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OperatingIncomeLoss" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">409,635</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OperatingIncomeLoss" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">1,613,569</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OperatingIncomeLoss" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">1,621,966</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_40A_eus-gaap--NonoperatingIncomeExpenseAbstract_i01B_z9V5xUmFJoW6" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Other
    income / (expense)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_404_eus-gaap--InterestExpense_i02N_di_msCz5lt_zleleitz93p6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Interest
    expense</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpense" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">17,149</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpense" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">20,628</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpense" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">52,091</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpense" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">38,246</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_407_ecustom--InterestExpenseRelatedToLoanOriginationFeeOnConvertibleNote_i02N_di_msCz5lt_ztvYtyxGmEye" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Interest
    expense related to loan origination fee on convertible note</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToLoanOriginationFeeOnConvertibleNote" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">70,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToLoanOriginationFeeOnConvertibleNote" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">10,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToLoanOriginationFeeOnConvertibleNote" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">135,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToLoanOriginationFeeOnConvertibleNote" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">25,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_400_ecustom--InterestExpenseRelatedToWarrantsOnConvertibleNote_i02N_di_msCz5lt_zEHRI7Ezw6ej" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Interest
    expense related to warrants on convertible note</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToWarrantsOnConvertibleNote" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">693,555</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0344">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToWarrantsOnConvertibleNote" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,746,125</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:InterestExpenseRelatedToWarrantsOnConvertibleNote" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">281,565</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_403_eus-gaap--InterestExpenseDebt_i02N_di_msCz5lt_zmwTOX9vJjXe" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Interest
    expense on convertible note</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpenseDebt" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">36,767</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0349">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:InterestExpenseDebt" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">80,121</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0351">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_401_ecustom--DerivativeGainLossOnDerivative_i02N_di_msCz5lt_zti0cxI4OJT9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Gain/(Loss)
    on derivative</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:DerivativeGainLossOnDerivative" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">740,220</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:DerivativeGainLossOnDerivative" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">69,178</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:DerivativeGainLossOnDerivative" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">864,589</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="kgkg:DerivativeGainLossOnDerivative" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">217,806</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_405_eus-gaap--OtherTaxExpenseBenefit_i02N_di_msCz5lt_z7kY574pEZNb" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Tax
    expense</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OtherTaxExpenseBenefit" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">19,523</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0359">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OtherTaxExpenseBenefit" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">27,065</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0361">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--GainsLossesOnExtinguishmentOfDebt_i02_maCz5lt_zDK4zDGr8AHi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Gain
    on the extinquishment of debt</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0363">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0364">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:GainsLossesOnExtinguishmentOfDebt" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">95,161</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0366">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40B_ecustom--EidlAdvance_i02N_di_msCz5lt_zgBhHaAHZLzd" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">EIDL
    advance</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0368">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0369">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0370">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="kgkg:EidlAdvance" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">7,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_403_eus-gaap--NonoperatingIncomeExpense_i02_maCz5lt_zi01yxtwrD7f" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Other
    income</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0373">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl0374">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfSharesOutstandingAbstract_i01B_zH6P4amHcWxi" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">WEIGHTED
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    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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<tr id="xdx_408_eus-gaap--WeightedAverageNumberOfShareOutstandingBasicAndDiluted_i02_zSkCOL3MVJR6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Basic
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:WeightedAverageNumberOfShareOutstandingBasicAndDiluted" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">771,268,436</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_403_eus-gaap--EarningsPerShareBasicAndDilutedAbstract_i02B_zx0l7DP7BJej" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold"><span style="font: 10pt Times New Roman, Times, Serif">NET
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    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40E_eus-gaap--EarningsPerShareBasicAndDiluted_i02_zDitfFjcTeH3" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Basic
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:EarningsPerShareBasicAndDiluted" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="INF" sign="-" unitRef="USDPShares">0.00</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:EarningsPerShareBasicAndDiluted" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="INF" sign="-" unitRef="USDPShares">0.00</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:EarningsPerShareBasicAndDiluted" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="INF" sign="-" unitRef="USDPShares">0.00</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b></b></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><span id="b_003"></span>&#160;</b></p>

<table cellpadding="0" cellspacing="0" id="xdx_30F_114_zeF7kPmzIHGg" summary="xdx: Statement - STATEMENTS OF STOCKHOLDERS&apos; DEFICIT (Unaudited)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" id="xdx_4BF_us-gaap--StatementEquityComponentsAxis_us-gaap--CommonStockMember_zTzwMIf83NI3" style="text-align: right">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" id="xdx_4BA_us-gaap--StatementEquityComponentsAxis_us-gaap--PreferredStockMember_zDJWMlyOqfr2" style="text-align: right">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="7" style="color: black; font-weight: bold; text-align: center">Common Stock</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="7" style="color: black; font-weight: bold; text-align: center">Preferred Stock</td><td style="color: black; font-weight: bold">&#160;</td>
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    <td colspan="3" style="text-align: center">&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" style="color: black; font-weight: bold; text-align: center">Total</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="7" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">$.00001 Par</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="color: black; font-weight: bold; text-align: center">Stockholders&#8217;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">Shares</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">Amount</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">Amount</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">Deficit</td><td style="color: black; font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; color: black; font-weight: bold; text-align: center">Deficit</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_405_eus-gaap--StockIssuedDuringPeriodValueShareBasedCompensation_pp0p0_zXzCx6XyTrhj" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_404_eus-gaap--ProfitLoss_i_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_435_c20200401__20200630_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_zaYDiQY7Hul8" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_402_ecustom--CommonStockIssuedForSponsorshipAgreementsValue_iP3us-gaap--SharesOutstanding_zx9TNb8hqSkd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40F_eus-gaap--StockIssuedDuringPeriodValueShareBasedCompensation_pp0p0_ztIYyav54Rr4" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_406_ecustom--WarrantsRelatedToConvertibleNote_iP3us-gaap--StockIssuedDuringPeriodSharesShareBasedCompensation_ze70vxksty3k" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_40A_eus-gaap--ProfitLoss_zXQxFaDK6m32" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_43C_c20200701__20200930_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_znN6NsA44nBh" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40C_ecustom--CommonStockConversionToPreferredStockValue_iP3us-gaap--SharesOutstanding_zlPl9ke21eO8" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40A_ecustom--PreferredStockConversionToCommonSharesValue_iP3custom--CommonStockConversionToPreferredStockShares_zQrThftKxtl5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40B_ecustom--AccruedCommonStockIssuesForCompensationValue_iP3custom--PreferredStockConversionToCommonSharesShares_z3FCp4I2ku9i" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="color: black">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="color: black">&#160;</td>
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<tr id="xdx_40B_eus-gaap--ProfitLoss_zmI9Paf0m04h" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_43C_c20201001__20201231_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_z91EbyenMRxf" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_400_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_iP3us-gaap--SharesOutstanding_zvgimHy7RqF3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_402_eus-gaap--ProfitLoss_zokK8Fclmokc" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_432_c20210101__20210331_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_zsP0aUmMtYwg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_402_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_zBAJpqlwHjI1" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_403_eus-gaap--StockIssuedDuringPeriodValueAcquisitions_iP3us-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_zm51bXk48rff" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_406_ecustom--WarrantsRelatedToConvertibleNote_zGvsLZc24hni" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_40B_eus-gaap--ProfitLoss_zsNsHFuGVTj4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: rgb(204,238,255); text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0566">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: black; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: black; text-align: right">(<ix:nonFraction name="us-gaap:ProfitLoss" contextRef="From2021-01-012021-03-31_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">1,819,503</ix:nonFraction></td><td style="padding-bottom: 1pt; color: black; text-align: left">)</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_432_c20210401__20210630_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_zxWTpFJRazH5" style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 2.5pt double; color: black; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; color: black; text-align: right">(<ix:nonFraction name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" contextRef="AsOf2021-03-31_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">11,099,539</ix:nonFraction></td><td style="padding-bottom: 2.5pt; color: black; text-align: left">)</td><td style="color: black; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; color: black; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; color: black; text-align: right">(<ix:nonFraction name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" contextRef="AsOf2021-03-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">4,126,375</ix:nonFraction></td><td style="padding-bottom: 2.5pt; color: black; text-align: left">)</td></tr>
<tr id="xdx_409_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_zmyENBBu42id" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40B_eus-gaap--ProfitLoss_zXAd459bJoM7" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_435_c20210701__20210930_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iS_zxv4JZ8q22y" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_402_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_z2vOTp5MuOS4" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_400_eus-gaap--StockIssuedDuringPeriodValueShareBasedCompensation_pp0p0_zD1h5KI8q7f3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black; text-align: left">Common Stock Issued for Compensation</td><td style="color: black">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="color: black">&#160;</td>
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<tr id="xdx_404_ecustom--WarrantsRelatedToConvertibleNote_zTyxQ7KPJJKb" style="vertical-align: bottom; background-color: White">
    <td style="color: black; text-align: left">Warrants related to convertible note</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="color: black">&#160;</td>
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<tr id="xdx_40B_ecustom--PreferredStockConversionToCommonStock_zHNsrBmaDLy9" style="vertical-align: bottom; background-color: White">
    <td style="color: black; text-align: left">Preferred Stock Conversion to Common Stock</td><td>&#160;</td>
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<tr id="xdx_406_eus-gaap--ProfitLoss_zhiPH0h5u7p4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black; text-align: left">Net Income (loss)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: rgb(204,238,255); text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0638">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: black; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: black; text-align: right">(<ix:nonFraction name="us-gaap:ProfitLoss" contextRef="From2021-07-012021-09-30_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,230,715</ix:nonFraction></td><td style="padding-bottom: 1pt; color: black; text-align: left">)</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: black; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: black; text-align: right">(<ix:nonFraction name="us-gaap:ProfitLoss" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,230,715</ix:nonFraction></td><td style="padding-bottom: 1pt; color: black; text-align: left">)</td></tr>
<tr id="xdx_436_c20210701__20210930_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iE_zWus7NyRXp44" style="vertical-align: bottom; background-color: White">
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</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b></b></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><span id="b_004"></span>&#160;</b></p>

<table cellpadding="0" cellspacing="0" id="xdx_30B_112_zFkV0kIgD2W8" summary="xdx: Statement - CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding-top: 0; padding-right: 0; padding-bottom: 0; color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td id="xdx_498_20210101__20210930_zEBXVLaJiS2j" style="color: #323232; text-align: right">&#160;</td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
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<tr style="vertical-align: bottom">
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    <td colspan="3" style="color: black; font-weight: bold; text-align: center">2020</td></tr>
<tr id="xdx_409_eus-gaap--NetCashProvidedByUsedInOperatingActivitiesAbstract_iB_zKcERvhslWC1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: #323232; font-weight: bold; text-align: left">CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:</td><td>&#160;</td>
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<tr id="xdx_405_eus-gaap--NetIncomeLoss_i01_maCzkHQ_zH6W10NRFXmg" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; width: 56%; color: #323232; text-align: left">Net loss</td><td style="width: 8%; color: #323232">&#160;</td>
    <td style="width: 1%; color: #323232; text-align: left">$</td><td style="width: 12%; color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">4,423,399</ix:nonFraction></td><td style="width: 1%; color: #323232; text-align: left">)</td><td style="width: 8%; color: #323232">&#160;</td>
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<tr id="xdx_406_eus-gaap--AdjustmentsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivitiesAbstract_i01B_ztYPKg7zITp5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; color: #323232; text-align: left">Adjustments to reconcile net income to net cash &#160;provided by operations:</td>
    <td>&#160; &#160;</td>
    <td style="text-align: left">&#160; &#160;</td>
    <td style="text-align: right">&#160; &#160;</td>
    <td style="text-align: left">&#160; &#160;</td>
    <td>&#160; &#160;</td>
    <td style="text-align: left">&#160; &#160;</td>
    <td style="text-align: right">&#160; &#160;</td>
    <td style="text-align: left">&#160; &#160;</td>
</tr>
<tr id="xdx_400_eus-gaap--DepreciationAndAmortization_i02_maCzkHQ_zeAUOJGyFqw8" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Depreciation and Amortization</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="us-gaap:DepreciationAndAmortization" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">32,755</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_40A_ecustom--CommonStockIssuedInExchangeForServices_i02_maCzkHQ_zi3do5ltCnfj" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: black; text-align: left">Common Stock Issued in Exchange for Services</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0665">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0666">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_408_ecustom--CommonStockIssuedInAcquisition_i02N_di_msCzkHQ_zgmoJWfNhexd" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: black; text-align: left">Common Stock Issued in Acquisition</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:CommonStockIssuedInAcquisition" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">270,900</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0669">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_408_ecustom--CommonStockIssuedForSponsorshipAgreements_i02N_di_msCzkHQ_zJOd9ZWHQmz4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: black; text-align: left">Common Stock Issued for Sponsorship</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0671">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:CommonStockIssuedForSponsorshipAgreements" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,578</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_40B_ecustom--CommonStockIssuedForCompensation_i02N_di_msCzkHQ_zh18e3QH6xub" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: black; text-align: left">Common Stock Issued for Compensation</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:CommonStockIssuedForCompensation" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">55,800</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:CommonStockIssuedForCompensation" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">476,002</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_404_ecustom--InterestExpenseRelatedToWarrantsOnConvertibleDebt_i02_maCzkHQ_zXFrQLhfpfXh" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Interest expense related to warrants on convertible debt</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:InterestExpenseRelatedToWarrantsOnConvertibleDebt" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,746,126</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><ix:nonFraction name="kgkg:InterestExpenseRelatedToWarrantsOnConvertibleDebt" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">281,565</ix:nonFraction></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_40D_eus-gaap--IncreaseDecreaseInOtherOperatingAssetsAndLiabilitiesNetAbstract_i01B_zSFNwyzSLVK5" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; color: #323232; text-align: left">Changes in operating assets and liabilities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_405_eus-gaap--IncreaseDecreaseInAccountsReceivable_i02N_di_msCzkHQ_z4kUxAbaWaC9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in accounts receivable</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:IncreaseDecreaseInAccountsReceivable" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">74,223</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_40E_eus-gaap--IncreaseDecreaseInOtherReceivables_i02N_di_msCzkHQ_znoULYHJiU2" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in other receivable</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0686">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0687">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_409_eus-gaap--IncreaseDecreaseInInventories_i02N_di_msCzkHQ_z2NvJvMnBp35" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in inventory</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:IncreaseDecreaseInInventories" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">206,109</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_404_eus-gaap--IncreaseDecreaseInPrepaidExpense_i02N_di_msCzkHQ_zVz5twiK1yPi" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in prepaids</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:IncreaseDecreaseInPrepaidExpense" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">62,200</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0693">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_408_ecustom--DecreaseIncreaseInIntercompanyTransactions_i02N_di_msCzkHQ_zhq7JRNrtkob" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in intercompany transactions</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0695">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0696">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_40B_eus-gaap--IncreaseDecreaseInOtherCurrentAssets_i02N_di_msCzkHQ_zfAZa2aBVhlg" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in other current assets</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:IncreaseDecreaseInOtherCurrentAssets" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" unitRef="USD">945</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_407_eus-gaap--IncreaseDecreaseInDeposits_i02_maCzkHQ_zBHMs8Ha3VS2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Decrease (increase) in deposits</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:IncreaseDecreaseInDeposits" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">6,250</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_409_eus-gaap--IncreaseDecreaseInOperatingAssets_i02N_di_msCzkHQ_zgwqLlspYuh" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40E_eus-gaap--IncreaseDecreaseInAccountsPayable_i02_maCzkHQ_zL5aneXpgc5g" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_406_ecustom--IncreaseDecreaseCreditCardPayable_i02_maCzkHQ_zEKYc6bInyc1" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_400_ecustom--IncreaseDecreaseInAccruedCompensation_i02_maCzkHQ_ztKBr5PsnOd7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Increase (decrease) in accrued compensation</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_40A_ecustom--IncreaseDecreaseInAccruedStockCompensation_i02_maCzkHQ_ze8kk5UNHQR4" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Increase (decrease) in accrued stock compensation</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_40B_ecustom--IncreaseDecreaseInAccruedExpenses_i02_maCzkHQ_zlmPbDzobYR2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_403_eus-gaap--IncreaseDecreaseInDerivativeLiabilities_i02_maCzkHQ_zwsCYZyKaoyb" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_403_eus-gaap--IncreaseDecreaseInOperatingLiabilities_i02_maCzkHQ_zUQhkiaLTElb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 30pt; color: #323232; text-align: left">Increase (decrease) in lease liability</td><td style="color: #323232; padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_402_eus-gaap--NetCashProvidedByUsedInOperatingActivities_i02T_mtCzkHQ_maCzeoV_zSOQUWzXD9T9" style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_40D_eus-gaap--NetCashProvidedByUsedInInvestingActivitiesAbstract_iB_zq9qXqCXx3Tg" style="vertical-align: bottom; background-color: White">
    <td style="color: #323232; font-weight: bold; text-align: left">CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:</td><td>&#160;</td>
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<tr id="xdx_405_eus-gaap--PaymentsToAcquirePropertyPlantAndEquipment_i01N_di_msCz26Z_zoSvS1CjP7f7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_407_eus-gaap--PaymentsToAcquireIntangibleAssets_i01N_di_msCz26Z_zmitBRXvUmz7" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; color: black; text-align: left">Changes in goodwill</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_407_eus-gaap--PaymentsForProceedsFromProductiveAssets_i01N_di_msCz26Z_zr3aLuEjYF9e" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_409_eus-gaap--NetCashProvidedByUsedInInvestingActivities_i01T_mtCz26Z_maCzeoV_z7aA3TDCNZm7" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 40pt; color: #323232; font-weight: bold; text-align: left">Net cash provided by (used in) investing activities</td><td style="color: #323232">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_40E_eus-gaap--NetCashProvidedByUsedInFinancingActivitiesAbstract_i01B_zzvD9uKslyok" style="vertical-align: bottom; background-color: White">
    <td style="color: #323232; font-weight: bold; text-align: left">CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_40D_eus-gaap--ProceedsFromRepaymentsOfNotesPayable_i01_maCzjGC_zryRsh5rOhTd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; color: #323232; text-align: left">Changes in note payable - related party</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right">(<ix:nonFraction name="us-gaap:ProceedsFromRepaymentsOfNotesPayable" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">13,000</ix:nonFraction></td><td style="color: #323232; text-align: left">)</td><td style="color: #323232">&#160;</td>
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<tr id="xdx_403_ecustom--RepaymentsOfLongTermLinesOfCredits_i01N_di_msCzjGC_zyTNWkkBa5w8" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40C_ecustom--ChangesInNotePayableAcquisition_i01_maCzjGC_zvmpVO1wIsof" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40B_eus-gaap--ProceedsFromNotesPayable_i01_maCzjGC_zKDT2Q5P3Sw9" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_40A_eus-gaap--ProceedsFromLinesOfCredit_i01_maCzjGC_zCVFDgIi58bk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; color: #323232; text-align: left">Changes line of credit</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0761">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232">&#160;</td>
    <td style="color: #323232; text-align: left">&#160;</td><td style="color: #323232; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0762">&#8212;</span></td><td style="color: #323232; text-align: left">&#160;</td></tr>
<tr id="xdx_404_eus-gaap--ProceedsFromConvertibleDebt_i01_maCzjGC_zqqAzk3xi8gl" style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b></b></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b><span id="b_005"></span>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock"><p id="xdx_80D_eus-gaap--OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock_zUfCHecva1Tb" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 1 &#8211; <span id="xdx_822_zZJXeGOpGx7e">ORGANIZATION AND DESCRIPTION OF BUSINESS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Kona Gold Beverage, Inc., a
Delaware corporation (&#8220;Kona Gold,&#8221; the &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;us,&#8221; or &#8220;our&#8221;),
owns and operates a line of premier CBD lifestyle brand and other products. As of September 30, 2021 the Company has four wholly-owned
subsidiaries: Kona Gold LLC, a Delaware limited liability company (&#8220;Kona&#8221;), HighDrate LLC, a Florida limited liability
company (&#8220;HighDrate&#8221;), Gold Leaf Distribution LLC, a Florida limited liability company (&#8220;Gold Leaf&#8221;), and
S and S Beverage, Inc. (&#8220;S and S&#8221;), a Wisconsin corporation, which the Company acquired in February 2021. The Company
is primarily focused on product development in the functional beverage sector. Kona Gold creates hemp-infused energy drinks, which
includes hemp energy drinks, CBD energy water, and also sells Kona Gold merchandise and apparel, which promotes the Company&#8217;s
beverages. HighDrate focuses on the development and marketing of CBD-infused energy waters geared towards the fitness and wellness
markets. S and S creates and sells unique lemon flavored drinks under the &#8220;Ooh La Lemin&#8221; brand name. Gold Leaf focuses
on the distribution of premium beverages and snacks in key markets.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company currently sells
its products through resellers, the Company&#8217;s websites, and distributors that span across 27&#160; states. The Company&#8217;s
products are available in wide variety of stores, including grocery stores, convenience stores, smoke shops, and gift shops.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">As used herein, the terms &#8220;Kona
Gold,&#8221; the &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;us,&#8221; or &#8220;our, refer to Kona Gold individually or,
as the context requires, collectively with its subsidiaries on a consolidated basis.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>The Company&#8217;s Business</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company has two reportable
segments:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 48px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i>Beverages. </i>Includes three types of beverage products: (i) hemp-infused energy drinks, (ii) CBD-infused energy water, (iii) CBD-infused high-alkaline water, (iv) lemon flavored beverages, as well as apparel with the Kona Gold logo. The Beverages Segment includes all of Kona, HighDrate, Ooh La Lemin, and operations. Additional information regarding these products is below. The Company considers this a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying Consolidated Financial Statements present financial information in a format that is consistent with the internal financial information used by management. The Company does not accumulate revenues by product classification and, therefore, it is impractical to present such information.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 48px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i>Distribution. </i>Includes the distribution of premium beverages and snacks in key markets. These markets include over 900 &#160;accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. In addition to distributing the Company&#8217;s own beverage products, the Company also distributes other products, including alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company&#8217;s current product offerings. The Distribution Segment includes all of Gold Leaf&#8217;s operations.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><i>Beverage Products</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company&#8217;s hemp-infused
energy drink is available in both regular and sugar-free options. These energy drinks are infused with organic hemp protein powder
and contain essential vitamins and ingredients that give consumers a natural energy boost. Hemp protein contains no gluten and
is compatible with a variety of diets, including vegan and Kosher. Our hemp energy drinks are available in eight flavors: classic
hemp, platinum hemp, sugar-free hemp, cherry vanilla, bubble gum, candy apple, cotton candy, and pink grapefruit.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_235_zxPmFsO8iH8d" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 8; Value: 1 -->
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<ix:exclude><p id="xdx_231_zsZoMOTtWbG3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_237_zOT3CJlF7soa" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zUZVIP1uLsHe" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_234_zSAcsVctMpK9" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_235_zAk0JR0IySn5" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">HighDrate&#8217;s CBD-infused
energy water is great tasting, sugar-free, and powered by the patented technology of Alkame Holdings Inc.&#8217;s wholly-owned
subsidiary, Alkame Water Inc. (&#8220;Alkame&#8221;), which uses its advanced water treatment to create a premium oxygenated alkaline
water with natural antioxidants. Alkame believes that, pursuant to a double-blind placebo, peer-backed research project that it
conducted, its Level 2 &#8211; inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices
in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets technology
can boost the immune system and physical performance. HighDrate&#8217;s CBD-infused energy water contains 80 mg of caffeine and
10 mg of CBD. The Company believes that CBD aids the body&#8217;s endocannabinoid system in neuroprotection, stress recovery, immune
balance, and homeostatic regulation. HighDrate&#8217;s CBD-infused energy water is available in six flavors: watermelon, kiwi strawberry,
tropical coconut, Georgia peach, sour apple, and blue island punch.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company&#8217;s product
&#8220;Storm&#8221; is a high-alkaline CBD-infused water. This water is also powered by Alkame&#8217;s patented technology, which
uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Storm high-alkaline
CBD water contains 20 mg of CBD.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Ooh La Lemin is lemonade for
the modern age. Made natural and refreshing with no added sugar, low in carbs, and 15 calories. Ooh La Lemin is available in four
distinct flavors: original lemonade, peach lemonade, strawberry lemonade, and blue raspberry lemonade.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company also sells branded
apparel. The Company uses only high-quality textiles and specialty inks and foils, which provide consumers with a premium fit and
feel. The Company currently offers shirts, tanks, hats, and towels for sale.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>Effects of COVID-19</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In January 2020, the World
Health Organization (the &#8220;WHO&#8221;) announced a global health emergency because of a new strain of coronavirus (&#8220;COVID-19&#8221;)
that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond
its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global
exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well
as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on the Company&#8217;s consumer
demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread
of the outbreak and the impact on the Company&#8217;s consumers and employees, all of which are uncertain and cannot be predicted.
Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock"><p id="xdx_809_eus-gaap--SignificantAccountingPoliciesTextBlock_ztBpIz1JDGpg" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 2 &#8211; <span id="xdx_82C_zuMYWBL4AKBa">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock"><p id="xdx_84B_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_znM6jtQr0imj" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>A.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_869_zUw5zMfOe4jc">Basis of Presentation</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The accompanying consolidated
financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany
transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared
on the accrual basis of accounting and in accordance with generally accepted accounting principles (&#8220;GAAP&#8221;) in the
United States.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:UseOfEstimates"><p id="xdx_848_eus-gaap--UseOfEstimates_z1LEfj7mEDWd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>B.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_86B_zgwB5LyrSLeb">Use of Estimates</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The preparation of the consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates
also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from
those assumptions and estimates.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_23A_zZUWAFDgPYj9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 9; Value: 1 -->
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23F_zQlgrsSrbUgi" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_232_zMaNC6NpvUv1" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zG1s7xBoHZB5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_236_zJzczTfjVUdh" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><p id="xdx_84A_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zsxB9JFO2rhf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>C.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_869_zPiSZvSgb2g4">Cash and Cash Equivalents</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">For the purpose of reporting
cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less
to be cash equivalents.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:FairValueOfFinancialInstrumentsPolicy"><p id="xdx_84F_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zYvlcavC53tj" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>&#160;</b>&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>D.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_865_zy5VmfWfNR3g">Fair Value of Financial Instruments</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The estimated fair values for
financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties
and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate
fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy,
which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established
for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs. The fair value hierarch is as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Level 1 &#8211; quoted prices
in active markets for identical assets or liabilities;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Level 2 &#8211; inputs other
than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or
liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable
or an be corroborated by observable market data for substantially the full term of the assets or liabilities; or</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Level 3 &#8211; unobservable
inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company analyzes all financial
instruments with features of both liabilities and equity under Accounting Standards Codification (&#8220;ASC&#8221;) 480, <i>Distinguishing
Liabilities from Equity,</i> and ASC 815, <i>Derivatives and Hedging </i>(&#8220;ASC 815&#8221;). Derivative liabilities are adjusted
to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations
as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted
for in arriving at the overall fair value of the financial instruments. In addition, the fair value of free-standing derivative
instruments such as warrant and option derivatives are valued using the Black-Scholes models.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company uses Level 2 inputs
for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes
option-pricing model based on various assumptions. The Company&#8217;s derivative liabilities are adjusted to reflect fair value
at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair
value of derivatives.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ReceivablesPolicyTextBlock"><p id="xdx_840_eus-gaap--ReceivablesPolicyTextBlock_zY4DFUkjXBP2" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>&#160;&#160;</b></p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>E.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_86F_zjAXr0b8I4Yi">Accounts Receivable and Allowance for Doubtful Accounts</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Accounts receivable are recorded
at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors
including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes
aware of a specific distributor&#8217;s or reseller&#8217;s inability to meet its financial obligations, bad debt charges are recorded
based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the nine
months ended September 30, 2021 and 2020, was approximately $<span id="xdx_903_eus-gaap--ProvisionForDoubtfulAccounts_c20210101__20210930_pp0p0" title="Bad debt"><ix:nonFraction name="us-gaap:ProvisionForDoubtfulAccounts" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">21,000</ix:nonFraction></span> and $<span id="xdx_901_eus-gaap--ProvisionForDoubtfulAccounts_c20200101__20200930_pp0p0" title="Bad debt"><ix:nonFraction name="us-gaap:ProvisionForDoubtfulAccounts" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">41,600</ix:nonFraction></span> respectively. These amounts are included in selling,
general and administrative expenses in the accompanying Consolidated Statements of Loss. Management will review annually to determine
provisions and record an allowance as deemed necessary. In the opinion of management, a provision was deemed necessary for uncollectible
accounts for Kona and no provision was deemed necessary for Gold Leaf. The allowances for Uncollectible Accounts at September 30,
2021 and December 31, 2020 were $<span id="xdx_907_eus-gaap--AllowanceForDoubtfulAccountsReceivableNoncurrent_c20210930_pp0p0" title="Allowance for Uncollectible Accounts"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,709</ix:nonFraction></span> and $<span id="xdx_909_eus-gaap--AllowanceForDoubtfulAccountsReceivableNoncurrent_c20201231_pp0p0" title="Allowance for Uncollectible Accounts"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,967</ix:nonFraction></span>, respectively, as reflected in the accompanying Consolidated Balance Sheets.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_232_z2wneEHNghBj" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 10; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<ix:exclude><p id="xdx_238_zoTHUh6oIgDl" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>&#160;</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zZm2QhnCEgi7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zE7OUJgToHuk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23C_zTv9XlAG5kch" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:InventoryPolicyTextBlock"><p id="xdx_84D_eus-gaap--InventoryPolicyTextBlock_zwVH06YYFok" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>&#160;</b></p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>F.</b></span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The cost of inventory using
the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company&#8217;s inventories
are valued at the lower cost or net realizable value. The Company&#8217;s inventory consists almost entirely of finished and unfinished
goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, lemonades, cans for production, and merchandise
and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision
for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at March 31, 2021, and December
31, 2020, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:PropertyPlantAndEquipmentPolicyTextBlock"><p id="xdx_84E_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_ziWYEpw40az1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;<b>&#160;</b></p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>G.</b></span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Property, plant and equipment
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Depreciation is provided using
the straight-line method over the estimated useful lives of the asset as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:ScheduleOfEstimatedUsefulLivesOfAssetTableTextBlock"><table cellspacing="0" cellpadding="0" id="xdx_882_ecustom--ScheduleOfEstimatedUsefulLivesOfAssetTableTextBlock_zuE4xYiGruta" summary="xdx: Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="font: 10pt/107% Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif">&#160;</td>
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<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 89%"><span style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</span></td>
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<tr style="vertical-align: bottom; background-color: white">
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<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>H.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_863_zw4wcJxPvrRe">Goodwill and Intangible Assets</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Goodwill arises from business
combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value
of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the
acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not
amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that
a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment
test.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Intangible assets represent
both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized,
and are tested annually for impairment.&#160;Intangible assets are reported on the balance sheet at cost less accumulated amortization.
The Company has selected December 31 as the date to perform the annual impairment test.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Management determined that,
for the year ending December 31, 2020, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill
is zero. On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S<span style="color: black">
and the five S and S Legacy Shareholders and acquired all of the capital stock of S and S</span>. <span style="color: black">Because
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determined that there was no impairment of trademarks for the year ending December 31, 2020, see Note 5, <i>Goodwill and Intangible
Assets</i>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<ix:exclude><p id="xdx_239_zZx1DXkY5sc1" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zC3mOFsMcF1e" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23D_zkTv8iQmCt95" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


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<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>I.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_861_zdiRwijrAILe">Leases</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On January 1, 2019, the Company
adopted the Financial Accounting Standards Board&#8217;s (&#8220;FASB&#8221;) Accounting Standards Update (&#8220;ASU&#8221;) 2016-02,
<i>Leases (Topic 842)</i> (&#8220;ASC Topic 842&#8221;), which requires an entity to recognize a liability and corresponding asset
for leases that meet certain criteria. The Company applied ASC Topic 842 using the modified retrospective approach. Under this
approach, the Company applied the new standards to all new leases, and leases which have remaining obligations for financial statements
issued for fiscal years beginning after December 15, 2018. The Company elected the package of practical expedients permitted under
the transition guidance, which allowed the Company to carryforward historical lease classification, and not reassess (i) whether
a contract was or contained a lease, and (ii) initial direct costs for any leases that existed prior to January 1, 2019. Under
this method, the Company did not restate comparative periods in its financial statements. The Company presents right-of-use assets
resulting from leases separately from other assets as noncurrent, and amortized accordingly. The corresponding lease liabilities
are presented separately from other liabilities on the accompanying Consolidated Balance Sheet.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company recognizes a right-of-use
asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of
the end of the lease term or the end of the useful life of the asset.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The lease liability is initially
measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with
the election of the practical expedient. The Company has elected to use the risk-free rate.</p>

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<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>J.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_869_zeuVRiGQlvH6">Revenue and Provision for Sales, Returns, and Allowances</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to
online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers,
the Company considers several indicators, including significant risks and rewards of products, the Company&#8217;s right to payment,
and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers
when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer
acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights
of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the
goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company also sells its
products, and beverages purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores,
and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several
indicators, including significant risks and rewards of products, the Company&#8217;s right to payment, and the legal title of the
products. The Company recognizes revenue from product sales to resellers when products that do not require further services by
the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is
reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers
under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and
handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included
in cost of products sold.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<ix:exclude><p id="xdx_23A_zfWdt30zyVl" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_235_zl6jIxZdWHg1" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zg6PsV1xh4Nj" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23E_z6oxcxOTNyw9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On January 1, 2019, the Company
adopted ASU No. 2014-09, <i>Revenue from Contracts with Customers (Topic 606)</i> (&#8220;ASC Topic 606&#8221;). The underlying
principle of ASC Topic 606 is to recognize revenue to depict the transfer of goods or services to a customer at the amount expected
to be collected. The implementation of Topic ASC 606 had no impact on the prior period financial statements and no cumulative effect
adjustment was recognized.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">To apply these principles,
ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s),
which includes:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 72px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">1.</span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">2.</span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Identifying the separate performance obligations in the contract or agreement;</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">3.</span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 72px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">4.</span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Allocating the transaction price to the separate performance obligations in the contract or agreement; and</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 72px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif">5.</span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to ASC Topic 606,
the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically
upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed
to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control
is transferred.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues
that would be meaningful. The majority of the Company&#8217;s revenue earned from its Beverages Segment and its Distribution Segment
is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company
does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations.
The Company&#8217;s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company&#8217;s
operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins,
sales trends, and the nature of its products and customers are essentially the same. The sales from the Company&#8217;s beverage
product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the
Company&#8217;s products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second
reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated
revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical
performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales
through Amazon, and Gold Leaf distribution sales, is included in Note 16, <i>Revenue</i>, to the Consolidated Financial Statements.
We also sell merchandise and apparel that comprises approximately 1% of the Company&#8217;s gross annual sales, and solely exists
to promote its beverages. Therefore, the Company&#8217;s merchandise and apparel products are not a reportable segment. Merchandise
and apparel sales are included with the gross sales for its Beverages Segment.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Sales are made to customers
under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total
sales. The Company recorded sales, returns, and allowance at three months ending September 30, 2021 and 2020 of approximately $<span id="xdx_901_ecustom--SalesReturnsAndAllowances_c20210701__20210930_pp0p0" title="Sales, returns and allowance"><ix:nonFraction name="kgkg:SalesReturnsAndAllowances" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">16,600</ix:nonFraction></span>
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which is included in the revenues, net of sales returns and allowances in the accompanying Consolidated Statements of Loss.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_23A_zVDDTn4mFpUa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_233_zS4g0Wdu9ke4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_234_zaiZ3sm4HJs" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zoyI9I6Y8Yj5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_232_zuxECxjBX5n3" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:CostOfSalesPolicyTextBlock"><p id="xdx_84C_eus-gaap--CostOfSalesPolicyTextBlock_zy7dCEoKor6h" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>K.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_868_z0Wz2Qr8PiNb">Cost of Revenues</span></span></b></span></td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Cost of revenues consist primarily
of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs
and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated
expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is
earned.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><p id="xdx_84B_eus-gaap--ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock_z1H7LtaJ4J6c" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>L.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_86C_zri9ZmTKIcF6">Impairment of Long-Lived Assets</span></span></b></span></td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company evaluates its long-lived
assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not
be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount
of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted
cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted
to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p id="xdx_840_eus-gaap--IncomeTaxPolicyTextBlock_zbFOiNTmLsel" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>M.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_865_zXyuPvYuaaSg">Income Taxes</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company accounts for income
taxes in accordance with FASB ASC 740, <i>Income Taxes, </i>which clarifies the accounting and disclosure requirements for uncertainty
in tax positions. It requires a two-step approach to evaluate tax positions and determine if they should be recognized in the financial
statements. The two-step approach involves recognizing tax positions that are &#8220;more likely than not&#8221; to occur and then
measuring those positions to determine if they are recognizable in the financial statements. Management regularly reviews and analyzes
all tax and has determined that no uncertain tax positions requiring recognition have occurred.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company has no recorded
liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated September 30, 2021 and December
31, 2020, respectively.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy"><p id="xdx_845_eus-gaap--ShareBasedCompensationOptionAndIncentivePlansPolicy_z9AmKVqJCf7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<tr style="vertical-align: top">
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    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>N.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_868_zkZXVRCDjFj1">Stock-Based Compensation</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">FASB&#8217;s ASC Topic 718,
<i>Stock Compensation</i> (formerly, FASB Statement 123R) (&#8220;ASC Topic 718&#8221;), prescribes accounting and reporting standards
for all stock-based payment transactions in which employee and non-employee services are acquired. The Company measures the cost
of employee and non-employee services received in exchange for an award of equity instruments based on the grant-date fair value
of the award. Fair value for restricted stock awards is valued using the closing price of the Company&#8217;s common stock, par
value $0.00001 per share (the &#8220;Common Stock&#8221;), on the date of grant.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company estimates the fair
value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc.
(the &#8220;OTCM&#8221;) on the date of grant. The fair value determined represents the cost for the award and is recognized over
the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for
forfeitures of restricted stock as they occur.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

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<ix:exclude><p id="xdx_233_zBPe1TGeGpwa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_230_zq9QMH3qFcd8" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zhy0h32nsDQl" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zFVYFcJqbnqf" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:AdvertisingCostsPolicyTextBlock"><p id="xdx_848_eus-gaap--AdvertisingCostsPolicyTextBlock_zbQBar8mRFR6" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>O.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_861_zlbldxCJCPba">Advertising Costs</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company expenses costs
of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise
or free samples to create sales. Advertising and promotion costs for the three months ended September 30, 2021 and 2020, was approximately
$<span id="xdx_908_eus-gaap--AdvertisingExpense_c20210701__20210930_pp0p0" title="Advertising costs"><ix:nonFraction name="us-gaap:AdvertisingExpense" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">21,600</ix:nonFraction></span> and $<span id="xdx_90F_eus-gaap--AdvertisingExpense_pp0p0_c20200701__20200930_zHk4ZVVVPXA1" title="Advertising costs"><ix:nonFraction name="us-gaap:AdvertisingExpense" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5,200</ix:nonFraction></span>, respectively, and for the nine months ended September 30, 2021 and 2020, was approximately $<span id="xdx_902_eus-gaap--AdvertisingExpense_pp0p0_c20210101__20210930_zxQiOVSshUmg" title="Advertising costs"><ix:nonFraction name="us-gaap:AdvertisingExpense" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">45,700</ix:nonFraction></span> and $<span id="xdx_906_eus-gaap--AdvertisingExpense_pp0p0_c20200101__20200930_zeMGFQjFbM4d" title="Advertising costs"><ix:nonFraction name="us-gaap:AdvertisingExpense" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">20,600</ix:nonFraction></span>,
respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements
of Loss.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ConcentrationRiskCreditRisk"><p id="xdx_845_eus-gaap--ConcentrationRiskCreditRisk_zNt0dqiK4yN1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>P.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_863_zO6jTpuKrOvj">Concentration of Credit Risk</span></span></b></span></td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company maintains cash
balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to
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institutions and had determined the credit exposure to be negligible.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p id="xdx_84F_eus-gaap--EarningsPerSharePolicyTextBlock_zzWWX6M6VjGg" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>Q.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_86A_zHtqEWhamLhi">Basic and Diluted Earnings per Share</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In accordance with FASB&#8217;s
ASC 260, <i>Earnings per Share</i>, basic income (loss) per common share is calculated using the weighted average number of shares
outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities
outstanding during the periods presented.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Diluted per-share loss is the
same as basic per-share loss when there is a loss from continuing operations.</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:SegmentReportingPolicyPolicyTextBlock"><p id="xdx_845_eus-gaap--SegmentReportingPolicyPolicyTextBlock_ziFa50BJwZC1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>R.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_866_zZzwuc5JX914">Segments</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">ASC 280-10, <i>Segment Reporting</i>
(&#8220;ASC 280-10&#8221;), establishes standards for reporting information regarding operating segments in annual financial statements
and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10
also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified
as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating
decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company identified
two operating segments that report revenue, including both sales to external customers and intersegment sales or transfers, that
are 10% or more of the combined revenue, internal and external, of all the Company&#8217;s operating segments. Furthermore, each
of the operating segments have assets that are 10% or more of the combined assets of all operating segments.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company then applied the
management approach to the identification of its two reportable segments &#8211; the Beverages Segment, consisting of the operations
of Kona, HighDrate, and Ooh La Lemin, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the
Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in
that aggregation into two reportable segments allows users of our financial statements to view the Company&#8217;s business through
the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered
included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each
operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the
distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises
approximately 1% of the Company&#8217;s gross annual sales, and solely exists for promotion purposes, could be aggregated with
the operations in the Beverages Segment. A description of the Company&#8217;s products is contained in Note 1, <i>Organization
and Description of Business. </i>For additional information regarding the Company&#8217;s two reportable segments, please see Note
18, <i>Segments.</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_238_zLeB3fFNP5zc" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_239_z205k2lnNGsk" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_232_z8IBg9n42APf" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zFaX7OQfTpB1" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_236_zvwp4NkAelv5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:RegistrationRightsAgreementPolicyTextBlock"><p id="xdx_84F_ecustom--RegistrationRightsAgreementPolicyTextBlock_zw8OVCCxpEN6" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>S.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span id="xdx_86E_zF3iGX3LgmCh">Registration Rights Agreement</span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In May 2020, the Company completed
a private placement transaction (the &#8220;2020 Private Placement&#8221;) of three secured convertible debentures (the &#8220;2020
Debentures&#8221;), convertible for up to <span id="xdx_909_ecustom--ConvertibleCommonStockSharesIssuedUponConversion_c20200531_pdd" title="Convertible shares"><ix:nonFraction name="kgkg:ConvertibleCommonStockSharesIssuedUponConversion" contextRef="AsOf2020-05-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">105,947,397</ix:nonFraction></span> shares (the &#8220;2020 Conversion Shares&#8221;) of Common Stock and a Warrant
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Warrant Shares&#8221;), pursuant to that certain Securities Purchase Agreement between an otherwise unaffiliated third-party investor
(the &#8220;Selling Stockholder&#8221;) and the Company, dated as of May 14, 2020 (the &#8220;2020 SPA&#8221;). The Company sold
and issued the initial 2020 Debenture (the &#8220;First 2020 Debenture&#8221;) and granted the Warrant promptly after entering
in the 2020 SPA. The Company sold and issued the second 2020 Debenture (the &#8220;Second 2020 Debenture&#8221;) promptly after
filing the registration statement on Form S-1 (the &#8220;2020 Registration Statement&#8221;) with the Securities and Exchange
Commission (the &#8220;SEC&#8221;). The Company sold and issued the third 2020 Debenture (the &#8220;Third 2020 Debenture&#8221;)
promptly after the SEC declared the 2020 Registration Statement effective. The Company agreed to register the 2020 Conversion Shares
and 2020 Warrant Shares pursuant to the terms of the Registration Rights Agreement between the Selling Stockholder and Company,
dated as of May 14, 2020 (the &#8220;2020 Registration Rights Agreement&#8221;).</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the
Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the
Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company
agreed to use its best efforts to have the 2020 Registration Statement declared effective by the SEC as soon as practicable, but
in no event later than the effectiveness deadline, or by the 5<sup>th</sup> trading day following the date on which the Company
is notified that the 2020 Registration Statement will not be reviewed or is no longer subject to further review and Pursuant to
the terms of the 2020 Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering
for resale the 2020 Conversion Shares and the 2020 Warrant Shares within 45 calendar days following the closing of the 2020 Private
Placement. Further, the Company agreed to use its best efforts to have the 2020 Registration Statement declared effective by the
SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5<sup>th</sup> trading day following
the date on which the Company is notified that the 2020 Registration Statement will not be reviewed or is no longer subject to
further review and comments. Pursuant to the 2020 Registration Rights Agreement, the Company is subject to partial liquidated damages
equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the 2020 SPA for any of the 2020 Debentures then held
by the holder for failure to file the 2020 Registration Statement timely, failure to file with the SEC a request for acceleration
in accordance with Rule 461 promulgated under the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;), within
five trading days after the date the Company is notified that the 2020 Registration Statement will not be reviewed or is not subject
to further review, the 2020 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness,
the 2020 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted
to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar
days during any 12-month period, or if after the six-month anniversary of the 2020 Registration Rights Agreement, the Company does
not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate
liquidated damages payable to a holder of the 2020 Debentures under the 2020 Registration Rights Agreement is 24% of the aggregate
purchase price paid by such holder pursuant to the 2020 SPA. The Selling Stockholder has agreed to waive this 30-consecutive-calendar-day
provision for so long as the Company is utilizing its best efforts to file its Annual Report on Form 10-K for its fiscal year ended
December 31, 2020, and promptly thereafter files a Post-Effective Amendment to the 2020 Registration Statement. The Commission
declared effective both the 2020 Registration Statement and the Post-Effective Amendment to the 2020 Registration Statement.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_239_zmhKZbT7u3dh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_23F_zXhHZwcAE6Z5" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_235_zc2fwGVTuDr4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23D_zlh8J17dL7Wk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23F_ztwvWrVlECEi" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_233_zGZc7y1TBhh1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company accounts for registration
rights agreements in accordance with ASC subtopic 825-20, <i>Registration Payment Arrangements </i>(&#8220;ASC 825-20&#8221;).
Under ASC 825-20, the Company is required to disclose the nature and terms of the arrangement, the maximum potential amount and
to assess each reporting period the probable liability under these arrangements and, if exists, to record or adjust the liability
to current period operations. ASC 825-20 specifies that the contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a
financial instrument, should be separately recognized and accounted for as a contingency in accordance with ASC 450-20, <i>Loss
Contingencies</i>. The Company recorded no amount for this contingency in other expenses for the year ended December 31, 2020.
As a result, there was no contingency recorded as a liability as a component of accrued expenses as of December 31, 2020.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; letter-spacing: normal; word-spacing: normal; text-align: justify">In February 2021, the Company completed
a private placement transaction (the &#8220;February 2021 Private Placement&#8221;) of two secured convertible debentures (the &#8220;February
2021 Debentures&#8221;), convertible for up to 154,958,678 shares (the &#8220;February 2021 Conversion Shares&#8221;) of Common Stock
and granted a Warrant to purchase Common Stock (the &#8220;February 2021 Warrant&#8221;), exercisable for up to 50,000,000 shares of
Common Stock (the &#8220;February 2021 Warrant Shares&#8221;), pursuant to that certain Securities Purchase Agreement between the Selling
Stockholder and the Company, dated as of February 10, 2021 (the &#8220;February 2021 SPA&#8221;). The Company sold and issued the initial
February 2021 Debenture (the &#8220;First February 2021 Debenture&#8221;) and granted the February 2021 Warrant promptly after entering
in the February 2021 SPA. The Company will sell and issue the second February 2021 Debenture (the &#8220;Second February 2021 Debenture&#8221;)
promptly after the SEC declares effective the February 2021 Registration Statement (as defined below).</p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Debentures
are due 12 months from their respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each
of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s
subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion
price, which is $<span id="xdx_908_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210930_pdd" title="Fixed conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.03</ix:nonFraction></span>
per share, subject to adjustment (the &#8220;February 2021 Fixed Conversion Price&#8221;),
or (ii) 80% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;) of our Common Stock during the 15 trading days immediately
preceding the conversion date, subject to adjustment (the &#8220;February 2021 Market Conversion Price&#8221;). The February 2021 Debentures
contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its
Common Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any
stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will
also result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject to a &#8220;conversion
blocker&#8221; such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures that would result in the Selling
Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion
(excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the February 2021 Debentures or
exercise of the February 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase
that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at least 65 days&#8217; prior written notice to the Company. The February 2021
Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the
Selling Stockholder converts the February 2021 Debentures or otherwise accelerates the maturity date, as provided for in the February
2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the February 2021 Debentures) are
then satisfied, in shares of the Common Stock at the February 2021 Market Conversion Price on the trading day immediately prior to the
date paid.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">At the Company&#8217;s option, it
has the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP of the
Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions
failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as
well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;). The
Company must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the amount of
principal and interest we desire then to redeem plus the applicable Redemption Premium</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_23E_zUAO2TAC2YBf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 17; Value: 1 -->
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<ix:exclude><p id="xdx_239_zgRfp1vp609" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23E_z0Anm89OFk1g" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23C_znj3liUglVl4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_234_zGfwPD8dBPSj" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_235_zEhv0PjUIF5g" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the February 2021 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the February 2021
SPA, the purchase price for the First February 2021 Debenture was $<span id="xdx_909_eus-gaap--SupplementalDeferredPurchasePrice_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_pp0p0" title="Purchase price"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">900,000</ix:nonFraction></span>,
less $<span id="xdx_90D_eus-gaap--AmortizationOfDeferredLoanOriginationFeesNet_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_pp0p0" title="Origination fees"><ix:nonFraction name="us-gaap:AmortizationOfDeferredLoanOriginationFeesNet" contextRef="From2021-01-012021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">41,000</ix:nonFraction></span>
for origination fees, which consisted of the &#8220;original issue discount&#8221; of $<span id="xdx_901_ecustom--OriginalIssueDiscount_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_pp0p0" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">36,000</ix:nonFraction></span>
and $<span id="xdx_909_ecustom--StructuringFee_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_pp0p0" title="Structuring fee"><ix:nonFraction name="kgkg:StructuringFee" contextRef="AsOf2021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5,000</ix:nonFraction></span>
as a structuring fee. Pursuant to the February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $<span id="xdx_903_eus-gaap--SupplementalDeferredPurchasePrice_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021DebentureMember_pp0p0" title="Purchase price"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">600,000</ix:nonFraction></span>,
less $<span id="xdx_90F_ecustom--OriginalIssueDiscount_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021DebentureMember_pp0p0" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">24,000</ix:nonFraction></span>
as an &#8220;original issue discount.&#8221;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In&#160;connection with the February 2021 Private Placement, the Company also
granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The February 2021 Warrant has
a three-year term and is immediately exercisable at an exercise price  of $<span id="xdx_906_eus-gaap--SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1_iI_c20210930_ziAlwp6ADkph" title="Exercisable exercise price"><ix:nonFraction name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.03</ix:nonFraction></span> per share, subject to adjustment. If the Company fails to maintain an
effective registration statement with the SEC covering the resale of the February 2021 Warrant Shares, or if an Event of Default (as defined
below) has occurred and is continuing, then the holder may exercise the February 2021 Warrant on a &#8220;cashless&#8221; basis. &#8220;Event
of Default&#8221; means an event of default under the February 2021 SPA or the February 2021 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the February 2021 Warrant.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Warrant is subject to an
&#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the February 2021 Warrant
or conversion of the February 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65 days&#8217; prior written notice to the Company.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the February 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the &#8220;February
2021 Registration Statement&#8221;) with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant
Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file
the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_237_zmlWS4w4WAS3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_23B_zrCdjr5VksSd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_238_zidWok2uHmk5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_230_zwHs8pGMy9Qc" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_236_zDErqkjbZrwe" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_234_zNNI5HtPSRr3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">the Company is notified that the February
2021 Registration Statement will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not
declared effective by the effectiveness deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason
to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more
than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month
anniversary of the February 2021 Registration Rights Agreement, the Company does not have available adequate current public information
as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the February 2021
Debentures under the February 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to
the February 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and
to pay all fees and expenses incurred by the Company in connection with the registration of the February 2021 Conversion Shares and the
February 2021 Warrant Shares held by the Selling Stockholder. The Commission declared effective the February 2021 Registration Statement.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">In August 2021, the Company completed
a private placement transaction (the &#8220;August 2021 Private Placement&#8221;) of two secured convertible debentures (the &#8220;August
2021 Debentures&#8221;), convertible for up to 1,111,111,110 shares (the &#8220;August 2021 Conversion Shares&#8221;) of Common Stock
and granted a Warrant to purchase Common Stock (the &#8220;August 2021 Warrant&#8221;), exercisable for up to 100,000,000 shares of Common
Stock (the &#8220;August 2021 Warrant Shares&#8221;), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder
and the Company, dated as of August 20, 2021 (the &#8220;August 2021 SPA&#8221;). The Company sold and issued the initial August 2021
Debenture (the &#8220;First August 2021 Debenture&#8221;) and granted the August 2021 Warrant promptly after entering in the August 2021
SPA. The Company will sell and issue the second August 2021 Debenture (the &#8220;Second August 2021 Debenture&#8221;) promptly after
the SEC declares effective the August 2021 Registration Statement (as defined below).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">The August 2021 Debentures are due
12 months from their respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each of its subsidiaries
pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s subsidiaries, and the Company.
Initially, the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject
to adjustment (the &#8220;August 2021 Fixed Conversion Price&#8221;), or (ii) 75% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;)
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the &#8220;August 2021
Market Conversion Price&#8221;). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and
asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures.
The August 2021 Debentures are subject to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any portion
of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common
Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at least
65 days&#8217; prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are
due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise
accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion
Price on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0 0 8pt 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_238_zHqJQItG3wbi" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_235_zG0goiL0ffM3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_236_z76q1k49yDR4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23C_zo3w8NNvNuWc" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_234_zjM6AyBJDAqe" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_239_zlRZx8TbCM22" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">At the Company&#8217;s option,
it has the right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP of the
Common Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure.
The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as
a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;). The Company
must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the amount of principal
and interest we desire then to redeem plus the applicable Redemption Premium</p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">The August 2021 Debentures contain an adjustment provision
that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents
at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations,
mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price
of the August 2021 Debentures.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant&#160;to the August 2021
SPA, the purchase price for the First August 2021 Debenture was $<span id="xdx_900_eus-gaap--SupplementalDeferredPurchasePrice_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021SecondDebentureMember_zXEwrkbGhjf7" title="Purchase price"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_First2021SecondDebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span>,
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for origination fees, which consisted of the &#8220;original issue discount&#8221; of $<span id="xdx_901_ecustom--OriginalIssueDiscount_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021SecondDebentureMember_zUyLoBnHeW31" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_First2021SecondDebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">60,000</ix:nonFraction></span>
and $<span id="xdx_904_ecustom--StructuringFee_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021SecondDebentureMember_zl0avsRdaT5e" title="Structuring fee"><ix:nonFraction name="kgkg:StructuringFee" contextRef="AsOf2021-09-30_custom_First2021SecondDebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span>
as a structuring fee. Pursuant to the August 2021 SPA, the purchase price for the Second August 2021 Debenture will be $<span id="xdx_90A_eus-gaap--SupplementalDeferredPurchasePrice_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021SecondDebentureMember_zvoSAQ3FkM82"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_Second2021SecondDebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span>,
less $<span id="xdx_903_eus-gaap--AmortizationOfDeferredLoanOriginationFeesNet_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021SecondDebentureMember_zq71yvcgwJjb"><ix:nonFraction name="us-gaap:AmortizationOfDeferredLoanOriginationFeesNet" contextRef="From2021-01-012021-09-30_custom_Second2021SecondDebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">60,000</ix:nonFraction></span>
as an &#8220;original issue discount.&#8221;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In connection with the August
2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pin3_dm_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021SecondWarrantSharesMember_zQeffPrV21Ih" title="Aggregate of common stock"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2021-01-012021-09-30_custom_Second2021SecondWarrantSharesMember" format="ixt:numdotdecimal" decimals="INF" scale="6" unitRef="Shares">50</ix:nonFraction></span>
million shares of the Common Stock. The August 2021 Warrant has a <span id="xdx_907_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021SecondWarrantSharesMember_zGuJF7bvYgfl" title="Warrant term" style="display: none"><ix:nonNumeric contextRef="AsOf2021-09-30_custom_Second2021SecondWarrantSharesMember" format="ixt-sec:duryear" name="us-gaap:WarrantsAndRightsOutstandingTerm">3</ix:nonNumeric> </span>three-year
term and is immediately exercisable at an exercise price of $<span id="xdx_900_eus-gaap--SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1_iI_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021SecondWarrantSharesMember_zgaCHJ5AcEk7"><ix:nonFraction name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1" contextRef="AsOf2021-09-30_custom_Second2021SecondWarrantSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.03</ix:nonFraction></span>
per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the
resale of the August 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the
holder may exercise the August 2021 Warrant on a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event of
default under the August 2021 SPA or the August 2021 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The August 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the August 2021 Warrant.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The August 2021 Warrant is subject to an
&#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant
or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65 days&#8217; prior written notice to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_234_z6SW6QnUZCN5" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence -->&#160;</p></div>
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<ix:exclude><p id="xdx_235_z03p6ToiuAj8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_230_zO8YLfZyH3Ai" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23F_z0hpntN3EeP4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zky4uCR4pk5i" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_237_zHpgvcBntin7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the August
2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the
&#8220;August 2021 Registration Statement&#8221;) with the SEC registering for resale the August 2021 Conversion Shares and the August
2021 Warrant Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed
to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for
its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed
to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no
event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the
August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement
will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.
The Commission declared effective the August 2021 Registration Statement.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p id="xdx_843_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_z4ZtoyRqzpB1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px">&#160;</td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif; width: 24px"><span style="font: 10pt Times New Roman, Times, Serif"><b>T.</b></span></td>
    <td style="font: 10pt/107% Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"><b><span style="text-decoration: underline"><span id="xdx_866_zC1HvgqiqMfg">Recently Issued Accounting Pronouncements</span></span></b></span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-indent: -18pt"><b>&#160;</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company has evaluated all
recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending
September 30, 2021. The Company does not expect a material impact on the Company&#8217;s financial position, result of operations,
or cash flows from these pronouncements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric></ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:InventoryDisclosureTextBlock"><p id="xdx_80A_eus-gaap--InventoryDisclosureTextBlock_zFtPBn1BIUYa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 3 &#8211; <span id="xdx_82D_zIpwfN9dPuqh">INVENTORY</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">Inventory consisted of the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfInventoryCurrentTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_887_eus-gaap--ScheduleOfInventoryCurrentTableTextBlock_zpvRIKNKXikg" summary="xdx: Disclosure - INVENTORY (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8B6_z0u63UMEAdoa" style="display: none">Schedule of Inventory</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_49A_20210930_zGRuP6U56zVa" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_492_20201231_zEjFF2TwFbk8" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
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    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_404_ecustom--CbdEnergyWater_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_400_ecustom--HempEnergyDrink_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Hemp Energy Drink</td><td>&#160;</td>
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<tr id="xdx_409_ecustom--StormCbdWater_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Storm CBD Water</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="kgkg:StormCbdWater" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">29,519</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_403_ecustom--OohLaLeminDrink_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Ooh La Lemin Drink</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="kgkg:OohLaLeminDrink" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">162,004</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1004">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_403_ecustom--MerchandiseAndApparel_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Merchandise and Apparel</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="kgkg:MerchandiseAndApparel" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">11,564</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_404_ecustom--UnfilledCansTraysAndSleeves_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Unfilled Cans, Trays and Sleeves</td><td>&#160;</td>
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<tr id="xdx_400_ecustom--MiscellaneousBeverages_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Miscellaneous Beverages</td><td>&#160;</td>
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<tr id="xdx_409_eus-gaap--InventoryRawMaterials_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Raw Materials</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_40B_eus-gaap--OtherInventory_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Other Inventory</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:OtherInventory" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">140,274</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_408_ecustom--PointOfSaleInventory_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Point of Sale Inventory</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_40F_eus-gaap--InventoryNet_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">866,613</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">660,504</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p>

<ix:exclude><p id="xdx_233_zwvhPWEE68pd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b></b></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 21; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23B_zeXlUtaL8pLh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>&#160;</b></p></ix:exclude>

<ix:exclude><p id="xdx_232_zX8N7rlDNZh4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_z4dMG9dixhgb" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zinsk1yD5rgg" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_230_zPZddOGJ6iH3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock"><p id="xdx_800_eus-gaap--PropertyPlantAndEquipmentDisclosureTextBlock_zvwSsumv18ib" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 4 &#8211; <span id="xdx_82F_zgI4g1FDk561">PROPERTY, PLANT AND EQUIPMENT</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">Property, plant and equipment consisted of the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_88D_eus-gaap--PropertyPlantAndEquipmentTextBlock_zBvBt01dmb1e" summary="xdx: Disclosure - PROPERTY, PLANT AND EQUIPMENT (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><span id="xdx_8B1_zfuwavbCxcrj" style="display: none">Schedule of property, plant and
equipment</span></td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td style="text-align: right">&#160;</td>
<td style="text-align: left">&#160;</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td style="text-align: right">&#160;</td>
<td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center">&#160;</td>
<td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
<td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td>
<td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
<td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2020</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; text-align: left">Furniture and Fixtures</td>
<td style="width: 8%">&#160;</td>
<td style="width: 1%; text-align: left">$</td>
<td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentGross_c20210930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" title="Property, Plant and Equipment, Gross" style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2021-09-30_us-gaap_FurnitureAndFixturesMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">72,575</ix:nonFraction></td>
<td style="width: 1%; text-align: left">&#160;</td>
<td style="width: 8%">&#160;</td>
<td style="width: 1%; text-align: left">$</td>
<td id="xdx_98A_eus-gaap--PropertyPlantAndEquipmentGross_c20201231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_pp0p0" title="Property, Plant and Equipment, Gross" style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2020-12-31_us-gaap_FurnitureAndFixturesMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">57,879</ix:nonFraction></td>
<td style="width: 1%; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Computers and Software</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_c20210930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2021-09-30_us-gaap_ComputerEquipmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">28,108</ix:nonFraction></td>
<td style="text-align: left">&#160;</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_c20201231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2020-12-31_us-gaap_ComputerEquipmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">16,638</ix:nonFraction></td>
<td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Machinery &amp; Equipment</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_98E_eus-gaap--PropertyPlantAndEquipmentGross_c20210930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2021-09-30_us-gaap_MachineryAndEquipmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">98,593</ix:nonFraction></td>
<td style="text-align: left">&#160;</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentGross_c20201231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2020-12-31_us-gaap_MachineryAndEquipmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">79,951</ix:nonFraction></td>
<td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Vehicles</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_980_eus-gaap--PropertyPlantAndEquipmentGross_c20210930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--VehiclesMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2021-09-30_us-gaap_VehiclesMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">160,415</ix:nonFraction></td>
<td style="text-align: left">&#160;</td>
<td>&#160;</td>
<td style="text-align: left">&#160;</td>
<td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_c20201231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--VehiclesMember_pp0p0" title="Property, Plant and Equipment, Gross" style="text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentGross" contextRef="AsOf2020-12-31_us-gaap_VehiclesMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">68,135</ix:nonFraction></td>
<td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Less: Accumulated Depreciation</td>
<td style="padding-bottom: 1pt">&#160;</td>
<td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td>
<td id="xdx_98F_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20210930_zAlr7JVNsZSb" title="Less: Accumulated Depreciation" style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">78,662</ix:nonFraction></td>
<td style="padding-bottom: 1pt; text-align: left">)</td>
<td style="padding-bottom: 1pt">&#160;</td>
<td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td>
<td id="xdx_981_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20201231_zckGo2AZJTj6" title="Less: Accumulated Depreciation" style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">54,731</ix:nonFraction></td>
<td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Property, plant and equipment, net</td>
<td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td>
<td id="xdx_983_eus-gaap--PropertyPlantAndEquipmentNet_c20210930_pp0p0" title="Property, Plant and Equipment, net" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">281,029</ix:nonFraction></td>
<td style="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</td>
<td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td>
<td id="xdx_985_eus-gaap--PropertyPlantAndEquipmentNet_c20201231_pp0p0" title="Property, Plant and Equipment, net" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:PropertyPlantAndEquipmentNet" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">167,872</ix:nonFraction></td>
<td style="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>



<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: center">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Depreciation for the three
months ended September 30, 2021 and 2020, was approximately $<span id="xdx_904_eus-gaap--Depreciation_c20210701__20210930_pp0p0" title="Depreciation"><ix:nonFraction name="us-gaap:Depreciation" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,500</ix:nonFraction></span> and $<span id="xdx_90A_eus-gaap--Depreciation_pp0p0_c20200701__20200930_zaAq5nZEtBDj" title="Depreciation"><ix:nonFraction name="us-gaap:Depreciation" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,200</ix:nonFraction></span> respectively, and for the nine months ended September
30, 2021 and 2020, was approximately $<span id="xdx_90A_eus-gaap--Depreciation_c20210101__20210930_pp0p0" title="Depreciation"><ix:nonFraction name="us-gaap:Depreciation" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">32,800</ix:nonFraction></span> and $<span id="xdx_90C_eus-gaap--Depreciation_c20200101__20200930_pp0p0" title="Depreciation"><ix:nonFraction name="us-gaap:Depreciation" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">24,800</ix:nonFraction></span>, respectively, and is included in selling, general and administrative
expenses in the accompanying Consolidated Statements of Loss.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock"><p id="xdx_802_eus-gaap--GoodwillAndIntangibleAssetsDisclosureTextBlock_zO5eRIhfW7Fh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 5 &#8211;<span id="xdx_82D_z9ms5wSetnNa"> GOODWILL AND INTANGIBLE ASSETS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In April 2019, <span id="xdx_900_eus-gaap--BusinessAcquisitionDescriptionOfAcquiredEntity_c20210101__20210930" title="Aquisition description"><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" name="us-gaap:BusinessAcquisitionDescriptionOfAcquiredEntity">Gold Leaf acquired
21,000,000 shares, representing 51.65% of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com,
Inc., a California corporation (&#8220;BigSupersearch&#8221;), and 14,000,000 shares of its Series A preferred stock, representing
76.26% of the issued and outstanding shares of preferred stock, for an aggregate of $61,000, which amount included the purchase
price, attorney fees, and transfer fees. At the time of the acquisition, BigSupersearch was considered a &#8220;shell company&#8221;
because it had no operations and no assets. Because no transfer of assets or liabilities occurred, the entire $61,000, representing
the consideration paid for all of the issued and outstanding capital stock of BigSupersearch, was recorded as goodwill.</ix:nonNumeric> </span>Gold Leaf
has not commenced operations or done anything with BigSupersearch and it still remains a shell company.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Goodwill may not be amortized.
Instead, it is tested at least annually for impairment. Impairment is the condition that exists when the carrying amount of goodwill
exceeds its implied fair value. The fair value of goodwill can be measured only as a residual and cannot be measured directly.
The Company uses a methodology to determine an amount that achieves a reasonable estimate of the value of goodwill for purposes
of measuring an impairment loss. That estimate is referred to as the implied fair value of goodwill.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">At December 31, 2019, BigSupersearch
had a positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that
the fair value of BigSupersearch exceeded its carrying value, including goodwill. In accordance with the Qualitative Assessment
outlined in ASC 350-20-35, <i>Goodwill &#8211; Subsequent Measurement </i>(&#8220;ASC 350-20-35&#8221;)<i>, </i>an entity has an
unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment
test.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Quantitative Assessment
is a two-step process as outlined in ASC 350-20-35 and is used to identify both the existence of impairment and the amount of impairment.
The first step is to determine the fair value. If the carrying amount is greater than zero and its fair value exceeds its carrying
amount, then there is no impairment and the second step is not necessary. If the carrying amount of BigSupersearch exceeds the
fair value, then goodwill will be measured for impairment in the second step. The amount of impairment loss recorded is the difference
in the excess of the carrying amount over its fair value.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_237_zqredhoZsuc5" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 22; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<ix:exclude><p id="xdx_231_zELcNCGNdNf9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_238_zvcnasxjMyZ7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zdZyAVcL7ZDk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zIKvGCnPzsse" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_234_zlnZYu16vB85" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Management determined that
for the year ending December 31, 2019, BigSupersearch had no identifiable assets or liabilities; therefore, the implied fair value
of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $<span id="xdx_908_eus-gaap--Goodwill_c20210630_pp0p0" title="Goodwill"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2021-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">61,000</ix:nonFraction></span>. At March 31, 2021,
and at December 31, 2020, BigSupersearch had $<span id="xdx_90A_eus-gaap--Goodwill_iI_pp0p0_c20210331_zjwluGNAw1c" title="Goodwill"><span id="xdx_90D_eus-gaap--Goodwill_c20201231_pp0p0" title="Goodwill"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2021-03-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">0</ix:nonFraction></ix:nonFraction></span></span> in goodwill.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S<span style="color: black"> and its shareholders
and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger was filed with the Wisconsin
Department of Financial Institutions (the &#8220;Merger Certificate&#8221;) on February 1, 2021. On January 22, 2021, (i) Kona
Gold, (ii) KGS Temporary Company, Inc. (Kona Gold Beverage, Inc.&#8217;s &#8220;Acquisition Subsidiary&#8221;), (iii) S and S,
(iv) William J. Stineman and K&amp;L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders),
and (v) Mr. Stineman (as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the &#8220;Merger
Agreement&#8221;). S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned
subsidiary of Kona Gold Beverage, Inc.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><span style="color: black; background-color: white">Pursuant
to the Merger Agreement, and subject to the terms and conditions contained therein,&#160;</span><span style="color: black">we acquired
all of the shares of capital stock of S and S from the five holders thereof (the &#8220;S and S Legacy Shareholders&#8221;). In
consideration thereof, we issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.&#8217;s common
stock (the &#8220;Acquisition Stock&#8221;) on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights
in respect of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the &#8220;Aggregate Acquisition
Payments&#8221;), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy Shareholders)
and approximately $<span id="xdx_90A_eus-gaap--AcquisitionCosts_c20210101__20210930_pp0p0" title="Acquisition payments"><ix:nonFraction name="us-gaap:AcquisitionCosts" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">89,000</ix:nonFraction></span> of which (the &#8220;Remaining Acquisition Payments&#8221;) is allocated to the five S and S Legacy Shareholders
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of the Aggregate Acquisition Payments, including the Remaining Acquisition Payments, are scheduled to be paid in monthly installments,
in arrears on the tenth calendar day of each month, commencing on March 10, 2021, at a rate equivalent to $<span id="xdx_904_eus-gaap--BusinessAcquisitionSharePrice_c20210310_pdd" title="Acquisition share price"><ix:nonFraction name="us-gaap:BusinessAcquisitionSharePrice" contextRef="AsOf2021-03-10" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">2.00</ix:nonFraction></span> per case of Lemin
Superior Lemonade (the product line of S and S that we have now branded as Ooh La Lemin) that we sell until the Aggregate Acquisition Payments have been paid in full. In
addition to the Aggregate Acquisition Payments, we also assumed and agreed to pay certain other liabilities of S and S as set forth
in the Merger Agreement. Because of this goodwill was recorded in the amount of $<span id="xdx_90A_eus-gaap--GoodwillImpairmentLoss_pp0p0_c20210101__20210930_zeekPpIiAUsa" title="Impairment of goodwill"><span id="xdx_903_eus-gaap--Goodwill_iI_pp0p0_c20210930_zajOh1DYEj11" title="Goodwill"><ix:nonFraction name="us-gaap:GoodwillImpairmentLoss" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD"><ix:nonFraction name="us-gaap:Goodwill" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,275,938</ix:nonFraction></ix:nonFraction></span></span>, see </span>Note 19 &#8211; <i>Acquisition
of S and S Beverage, Inc.</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><i>&#160;</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Changes in goodwill are as
follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfGoodwillTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_889_eus-gaap--ScheduleOfGoodwillTextBlock_zdd7aLwreF5b" summary="xdx: Disclosure - GOODWILL AND INTANGIBLE ASSET (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8B0_zqcrjB92FDu6" style="display: none">Schedule of changes in goodwill</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98C_eus-gaap--GoodwillAcquiredDuringPeriod_c20210101__20210930_pp0p0" title="Acquired goodwill" style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:GoodwillAcquiredDuringPeriod" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,275,938</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_98F_eus-gaap--GoodwillImpairmentLossNetOfTax_c20210101__20210930_pp0p0" title="Impairment" style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1105">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_987_eus-gaap--GoodwillImpairmentLossNetOfTax_c20200101__20201231_pp0p0" title="Impairment" style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1107">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total goodwill</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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</table></ix:nonNumeric>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">Intangible assets consisted of the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_88E_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_zLcvxbSz2CZ" summary="xdx: Disclosure - GOODWILL AND INTANGIBLE ASSET (Details 1)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8B3_zHLrNXvYK719" style="display: none">Schedule of intangible assets</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_497_20210930_zFh9L2rQrH92" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_498_20201231_z9dtTM5AdC9c" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, &#160; 2020</td></tr>
<tr id="xdx_40D_eus-gaap--FiniteLivedTrademarksGross_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left">Trademark (HighDrate)</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:FiniteLivedTrademarksGross" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">81,750</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%">&#160;</td>
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<tr id="xdx_409_ecustom--WebsiteDevelopment_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Website Development (Ooh La Lemin)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="kgkg:WebsiteDevelopment" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,201</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1119">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
<tr id="xdx_408_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iNI_pp0p0_di_zE6uxGRULeg5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt">Less: Accumulated Amortization</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,262</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsNet_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total Intangible Asset</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">74,744</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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</table></ix:nonNumeric>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<ix:exclude><p id="xdx_239_zHvNeLhsir17" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 23; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23C_zp3bHWsvrpq" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_230_zxTAmPXPpBTk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23D_zEben2Fk9jai" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23F_zr74hTom5z5b" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_234_zS1imrYpEfA1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">Estimated future amortization expense related to
the intangible asset is as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_881_eus-gaap--ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock_zTW0hNm9Y8J2" summary="xdx: Disclosure - GOODWILL AND INTANGIBLE ASSET (Details 2)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td id="xdx_8BC_z8lcfoFRxri8" style="font-weight: bold; text-align: left"><span id="xdx_8B7_zh3ZMRnE4DQj" style="display: none">Schedule of estimated future amortization
    expense</span></td>
    <td colspan="4" id="xdx_491_20210930_z8u13PlrsgT4" style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Fiscal year ending:</span></td>
    <td colspan="4" style="font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_406_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 73%; text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">December
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    <td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="width: 15%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseNextTwelveMonths" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">2,349</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">December 31, 2022</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,395</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_402_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearThree_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">December 31, 2023</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearThree" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,395</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFour_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">December 31, 2024</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFour" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,395</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_405_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">December 31, 2025</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseYearFive" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,395</ix:nonFraction></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40B_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 10pt"><span style="font: 10pt Times New Roman, Times, Serif">Thereafter</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">34,815</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40D_eus-gaap--FiniteLivedIntangibleAssetsNet_iI_pp0p0_zB25AVm3jIi2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif; color: rgb(204,238,255)">Finite-Lived Intangible Assets, Net</span></td><td style="font-weight: bold; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:FiniteLivedIntangibleAssetsNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">74,744</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
</table></ix:nonNumeric>


<p id="xdx_8AE_z8vZf3SoVOk5" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: left">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:NoteReceivableTextBlock"><p id="xdx_800_ecustom--NoteReceivableTextBlock_zYrgj0Bb8aNc" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 &#8211; <span id="xdx_82D_zVSfnL6on9ad">NOTE RECEIVABLE</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On May 26, 2016, Robert Clark,
formed Elev8 Hemp, LLC, a Delaware limited liability company (&#8220;Elev8 Hemp&#8221;), on behalf of Ryan Medico, the Company&#8217;s
then-Chief Financial Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In June 2016, the Company entered
into a letter of intent with Elev8 Hemp to acquire it, such that it would become the Company&#8217;s wholly-owned subsidiary. Pursuant
to the letter of intent, on June 7, 2016, the Company entered into an Acquisition Agreement with Elev8 Hemp (the &#8220;Elev8 Hemp
Acquisition Agreement&#8221;), whereby the Company agreed to acquire <span id="xdx_901_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20160630__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_zQ9avpYiGc97" title="Ownership percentage"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2016-06-30_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">100</ix:nonFraction></span>% of the ownership of Elev8 Hemp and, in exchange, the
Company agreed to issue to Mr. Medico five million restricted shares of the Common Stock, which had a fair market value of $<span id="xdx_901_eus-gaap--StockIssuedDuringPeriodValueAcquisitions_c20160901__20160930__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_pp0p0" title="Restricted shares issued for acquisition, amount"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodValueAcquisitions" contextRef="From2016-09-012016-09-30_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">50,000</ix:nonFraction></span>.
The Elev8 Hemp Acquisition Agreement provided that if the Company failed to adequately capitalize the development of Elev8 Hemp
to complete its objectives set forth in its business plan, then Mr. Medico would have the option until March 31, 2018 to purchase
Elev8 Hemp from the Company for a purchase price of $<span id="xdx_908_eus-gaap--BusinessCombinationConsiderationTransferred1_c20160901__20160930__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_pp0p0" title="Purchase price"><ix:nonFraction name="us-gaap:BusinessCombinationConsiderationTransferred1" contextRef="From2016-09-012016-09-30_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">50,000</ix:nonFraction></span>, which could be paid in shares of the Company&#8217;s Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On October 10, 2016, the Company
entered into a Membership Interest Purchase Agreement (the &#8220;Membership Interest Purchase Agreement&#8221;) with Elev8 Hemp,
as the Company&#8217;s wholly-owned subsidiary, and Branded Legacy, Inc., formerly known as Elev8 Brands, Inc. and, prior to that,
known as PLAD, Inc. (&#8220;Branded Legacy&#8221;), to sell <span id="xdx_905_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20161010__us-gaap--TypeOfArrangementAxis__custom--MembershipInterestPurchaseAgreementMember__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_zUmH70piGR6k" title="Ownership percentage"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2016-10-10_custom_MembershipInterestPurchaseAgreementMember_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">100</ix:nonFraction></span>% of the then-issued and outstanding membership interests of Elev8
Hemp to Branded Legacy in consideration of its issuance to the Company of <span id="xdx_90C_eus-gaap--BusinessAcquisitionEquityInterestsIssuedOrIssuableNumberOfSharesIssued_c20161001__20161010__us-gaap--TypeOfArrangementAxis__custom--MembershipInterestPurchaseAgreementMember__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_pdd" title="Business acquisition, shares issued"><ix:nonFraction name="us-gaap:BusinessAcquisitionEquityInterestsIssuedOrIssuableNumberOfSharesIssued" contextRef="From2016-10-012016-10-10_custom_MembershipInterestPurchaseAgreementMember_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">200,000,000</ix:nonFraction></span> shares of its common stock, par value $<span id="xdx_90B_eus-gaap--CommonStockParOrStatedValuePerShare_c20161010__us-gaap--TypeOfArrangementAxis__custom--MembershipInterestPurchaseAgreementMember__us-gaap--BusinessAcquisitionAxis__custom--Elev8HempMember_pdd" title="Common stock par value"><ix:nonFraction name="us-gaap:CommonStockParOrStatedValuePerShare" contextRef="AsOf2016-10-10_custom_MembershipInterestPurchaseAgreementMember_custom_Elev8HempMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.00001</ix:nonFraction></span>.
In connection with this transaction, Mr. Medico became the Chief Executive Officer and the sole director of Branded Legacy. The
parties desired to enter into the Membership Interest Purchase Agreement because the Company did not have adequate capital to fund
the development of Elev8 Hemp&#8217;s business, as well as its own. Until July 2018, Mr. Medico also continued to serve as the
Company&#8217;s Chief Financial Officer.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On April 14, 2017, the Company&#8217;s
Board of Directors (the &#8220;Board&#8221;) declared a dividend to its stockholders of an aggregate of <span id="xdx_903_eus-gaap--CommonStockDividendsShares_c20170401__20170414__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StockholdersMember_pdd" title="Common stock dividends, shares"><ix:nonFraction name="us-gaap:CommonStockDividendsShares" contextRef="From2017-04-012017-04-14_custom_StockholdersMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">53,196,608</ix:nonFraction></span> shares of common
stock of Branded Legacy. The Company&#8217;s stockholders received one share of common stock of Branded Legacy for every 10 shares
of the Company&#8217;s Common Stock held on the record date. On the record date, we had approximately 104 stockholders, all of
whom received this dividend. After the payment of the dividend, the Company held <span id="xdx_90A_eus-gaap--CommonStockSharesOutstanding_c20170414_pdd" title="Common stock, shares outstanding"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2017-04-14" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">146,803,392</ix:nonFraction></span> shares of common stock of Branded
Legacy.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On March 6, 2018, the Company
entered into a Securities Exchange and Settlement Agreement (the &#8220;First Exchange Agreement&#8221;) with Branded Legacy. Pursuant
to the First Exchange Agreement, the Company exchanged with Branded Legacy the remaining <span id="xdx_900_ecustom--RemainingInvestmentShares_c20180301__20180306__us-gaap--TypeOfArrangementAxis__custom--FirstExchangeAgreementMember__dei--LegalEntityAxis__custom--BrandedLegacyMember_pdd" title="Remaining investment, shares"><ix:nonFraction name="kgkg:RemainingInvestmentShares" contextRef="From2018-03-012018-03-06_custom_FirstExchangeAgreementMember_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">146,803,392</ix:nonFraction></span> shares of common stock held
by the Company for <span id="xdx_905_ecustom--SharesHeldByCompany_c20180301__20180306__us-gaap--TypeOfArrangementAxis__custom--FirstExchangeAgreementMember__dei--LegalEntityAxis__custom--BrandedLegacyMember_pdd" title="Shares held by company"><ix:nonFraction name="kgkg:SharesHeldByCompany" contextRef="From2018-03-012018-03-06_custom_FirstExchangeAgreementMember_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,746,723</ix:nonFraction></span> shares of Branded Legacy&#8217;s Series D preferred stock. The shares of Series D preferred stock
were initially convertible into <span id="xdx_906_eus-gaap--ConversionOfStockSharesIssued1_c20180301__20180306__us-gaap--TypeOfArrangementAxis__custom--FirstExchangeAgreementMember__dei--LegalEntityAxis__custom--BrandedLegacyMember_pdd" title="Preferred stock, shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesIssued1" contextRef="From2018-03-012018-03-06_custom_FirstExchangeAgreementMember_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">164,803,380</ix:nonFraction></span> shares of common stock of Branded Legacy. At December 31, 2018, the balance of the
investment in Branded Legacy was $<span id="xdx_901_eus-gaap--Investments_c20181231__dei--LegalEntityAxis__custom--BrandedLegacyMember_pp0p0" title="Investment"><ix:nonFraction name="us-gaap:Investments" contextRef="AsOf2018-12-31_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,648</ix:nonFraction></span>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_231_z4yqVUWe1CZ6" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 24; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23D_z0IXA8f4lNl7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23C_z0JiWvoWhrLb" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zDXnUwoMnjw5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23F_zqPFeIKodwrf" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23E_zvdI0m0zEsf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On November 26, 2019, we entered
into a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the remaining investment of <span id="xdx_901_ecustom--RemainingInvestmentShares_c20191101__20191126__us-gaap--TypeOfArrangementAxis__custom--SecondExchangeAgreementMember__dei--LegalEntityAxis__custom--BrandedLegacyMember_pdd" title="Remaining investment, shares"><ix:nonFraction name="kgkg:RemainingInvestmentShares" contextRef="From2019-11-012019-11-26_custom_SecondExchangeAgreementMember_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,746,723</ix:nonFraction></span>
shares of Branded Legacy&#8217;s Series D preferred stock for its 10-year, unsecured, non-convertible promissory note in our favor
in the original principal amount of $<span id="xdx_906_eus-gaap--DebtInstrumentFaceAmount_c20191126__us-gaap--TypeOfArrangementAxis__custom--SecondExchangeAgreementMember__dei--LegalEntityAxis__custom--BrandedLegacyMember_pp0p0" title="Debt instrument, principal amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2019-11-26_custom_SecondExchangeAgreementMember_custom_BrandedLegacyMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span> (the &#8220;Branded Legacy Note&#8221;). All principal and accrued and unpaid interest
on the Branded Legacy Note is payable, in full, on November 27, 2029. As of the dates of the foregoing transactions, the Company
and Branded Legacy were not considered related parties based upon the guidance set forth in ASC Topic 850, <i>Related Party Disclosures</i>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Management could not ascertain
with certainty of the collectability of the Branded Legacy Note due to the dollar amount and duration of the term; therefore, an
allowance for $<span id="xdx_903_eus-gaap--AllowanceForDoubtfulOtherReceivablesCurrent_c20201231_pp0p0" title="Allowance for doubtful account"><ix:nonFraction name="us-gaap:AllowanceForDoubtfulOtherReceivablesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span> had been assessed and expensed, which was included in the Consolidated Statements of Loss for the year
ended December 31, 2019. The Branded Legacy Note and the investment in Branded Legacy consisted of the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:ScheduleOfNoteReceivable"><table cellpadding="0" cellspacing="0" id="xdx_888_ecustom--ScheduleOfNoteReceivable_zRN1vTQWthYe" summary="xdx: Disclosure - NOTE RECEIVABLE (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8BB_zdsapV1b3H2l" style="display: none">Schedule of note receivable</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_49C_20210930_zRS81H6Zyg7d" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_49D_20201231_zJYAMk2vYXF" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">September
    30, 2021</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif">December
    31, 2020</span></td></tr>
<tr id="xdx_406_eus-gaap--InvestmentOwnedAtCost_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Investment in Branded Legacy</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl1189">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl1190">&#8212;</span></span></td><td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_402_eus-gaap--NotesReceivableGross_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="width: 56%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note receivable</span></td><td style="width: 8%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
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    <td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="width: 12%; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:NotesReceivableGross" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span></td><td style="width: 1%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_40C_eus-gaap--AllowanceForDoubtfulOtherReceivablesCurrent_iNI_pp0p0_di_zG8fkifPES9b" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:AllowanceForDoubtfulOtherReceivablesCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td><td style="padding-bottom: 1pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:AllowanceForDoubtfulOtherReceivablesCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr id="xdx_408_eus-gaap--NotesReceivableNet_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Note
    receivable, net</span></td><td style="font-weight: bold; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl1198">&#8212;</span></span></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td><td style="font-weight: bold; padding-bottom: 2.5pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><span style="font: 10pt Times New Roman, Times, Serif"><span style="-sec-ix-hidden: xdx2ixbrl1199">&#8212;</span></span></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
</table></ix:nonNumeric>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: center">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ShareholdersEquityAndShareBasedPaymentsTextBlock"><p id="xdx_80F_eus-gaap--ShareholdersEquityAndShareBasedPaymentsTextBlock_zOtFTedh9h2i" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 7 &#8211;<span id="xdx_82D_zk04kkLlrfAd"> STOCK-BASED COMPENSATION</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company&#8217;s directors,
officers, key employees, and non-employees were granted stock-based compensation consisting of restricted stock awards. Stock-based
compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense at the date of
issuance. The Company estimates the fair value of each restricted stock award as of the date of grant using closing price as reported
by the OTCM on the date of grant. The Board has not adopted any employee stock purchase plans or other incentive plans, nor does
the Company grant stock options to its directors, officers, and employees.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The share-based payments granted
for the nine months ended September 30, 2021 and the year ended December 31, 2020, were <span id="xdx_90A_eus-gaap--StockGrantedDuringPeriodValueSharebasedCompensation_c20210101__20210930_pp0p0" title="Stock-based compensation granted"><ix:nonFraction name="us-gaap:StockGrantedDuringPeriodValueSharebasedCompensation" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,100,000</ix:nonFraction></span>&#160; and <span id="xdx_90E_eus-gaap--StockGrantedDuringPeriodValueSharebasedCompensation_c20200101__20201231_pp0p0" title="Stock-based compensation granted"><ix:nonFraction name="us-gaap:StockGrantedDuringPeriodValueSharebasedCompensation" contextRef="From2020-01-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,085,140</ix:nonFraction> </span>shares
of the Common Stock, respectively. No stock-based Common Stock was cancelled or forfeited for the nine months ended September 30,
2021 and the year ended December 31, 2020, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">For the nine months ended September
30, 2021 and 2020, the Company recognized stock-based compensation expense, which is included in selling, general and administrative
expenses in the accompanying Consolidated Statements of Loss, as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfCompensationCostForShareBasedPaymentArrangementsAllocationOfShareBasedCompensationCostsByPlanTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_88C_eus-gaap--ScheduleOfCompensationCostForShareBasedPaymentArrangementsAllocationOfShareBasedCompensationCostsByPlanTableTextBlock_zl8zyal1kmH4" summary="xdx: Disclosure - STOCK BASED COMPENSATION (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8BC_zY0dOs9R9H3e" style="display: none">Stock-based compensation expense</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Nine Months Ended September 30,</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Nine Months Ended September 30,</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left">Employee stock awards</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensation_c20210101__20210930__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--EmployeeStockMember_pp0p0" title="Stock-based compensation expense" style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2021-01-012021-09-30_us-gaap_EmployeeStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">55,800</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--ShareBasedCompensation_c20200101__20200930__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--EmployeeStockMember_pp0p0" title="Stock-based compensation expense" style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2020-01-012020-09-30_us-gaap_EmployeeStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">476,000</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Non-employee stock awards</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_98A_eus-gaap--ShareBasedCompensation_c20210101__20210930__us-gaap--SubsidiarySaleOfStockAxis__custom--NonEmployeeStockMember_pp0p0" title="Stock-based compensation expense" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2021-01-012021-09-30_custom_NonEmployeeStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">270,900</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_984_eus-gaap--ShareBasedCompensation_c20200101__20200930__us-gaap--SubsidiarySaleOfStockAxis__custom--NonEmployeeStockMember_pp0p0" title="Stock-based compensation expense" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2020-01-012020-09-30_custom_NonEmployeeStockMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">2,577</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Total stock-based compensation expense</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensation_c20210101__20210930_pp0p0" title="Stock-based compensation expense" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">326,700</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensation_c20200101__20200930_pp0p0" title="Stock-based compensation expense" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensation" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">478,577</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>







<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company expenses stock-based
compensation cost in the current period at the grant date. No future years of compensation is expected for the next five fiscal
years. The Company has a balance in accrued stock-based compensation at September 30, 2021 and December 31, 2020, of $<span id="xdx_90D_ecustom--AccruedStockbasedCompensation_c20210930_pp0p0" title="Accrued stock-based compensation"><ix:nonFraction name="kgkg:AccruedStockbasedCompensation" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,386,497</ix:nonFraction></span>
and $<span id="xdx_90B_ecustom--AccruedStockbasedCompensation_c20201231_pp0p0" title="Accrued stock-based compensation"><ix:nonFraction name="kgkg:AccruedStockbasedCompensation" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,386,497</ix:nonFraction></span>, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_231_znYMuE5FpRoj" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 25; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence -->&#160;</p></div>
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_231_zldKffYzGbnl" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_231_zYEPHR3hehrd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zBbtWuK95pE6" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_235_zv5IUFoDhDSc" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_239_ztGDsFqFAEml" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:LineOfCreditTextBlock"><p id="xdx_807_ecustom--LineOfCreditTextBlock_zsYNpTuk3IF2" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 8 &#8211; <span id="xdx_827_zBHSNGoTE30i">LINE OF CREDIT</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On May 5, 2018, Kona entered
into a Line of Credit Agreement with Matthew Nicoletti as the lender, which established a revolving line of credit in the amount
of up to $<span id="xdx_90F_ecustom--RevolvingLineOfCredit_c20180505_pp0p0" title="Revolving line of credit"><ix:nonFraction name="kgkg:RevolvingLineOfCredit" contextRef="AsOf2018-05-05" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">400,000</ix:nonFraction></span>. The line of credit matures on <span id="xdx_90F_eus-gaap--LineOfCreditFacilityExpirationDate1_dd_c20180421__20180505_zMs12zHLB5ze" title="Mature date on line of credit"><ix:nonNumeric contextRef="From2018-04-212018-05-05" format="ixt:datemonthdayyearen" name="us-gaap:LineOfCreditFacilityExpirationDate1">May 5, 2022</ix:nonNumeric></span> and is reflected as non-current on the accompanying Consolidated Balance
Sheets. Advances under the line of credit bear interest at the rate of <span id="xdx_900_eus-gaap--LineOfCreditFacilityInterestRateAtPeriodEnd_iI_dp_c20180505_z0d9fxpFIXc1" title="Interest rate"><ix:nonFraction name="us-gaap:LineOfCreditFacilityInterestRateAtPeriodEnd" contextRef="AsOf2018-05-05" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.75</ix:nonFraction></span> percent per annum. Payments of principal and accrued
interest are payable on the maturity date. At September 30, 2021 and December 31, 2020, the line of credit had an outstanding principal
balance of $<span id="xdx_909_eus-gaap--LineOfCredit_c20210930_pp0p0" title="Line of credit"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">198,470</ix:nonFraction></span>, respectively, and accrued interest of $<span id="xdx_90E_eus-gaap--InterestPayableCurrent_c20210930_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">42,683</ix:nonFraction></span> and $<span id="xdx_908_eus-gaap--InterestPayableCurrent_c20201231_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">32,102</ix:nonFraction></span>, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p id="xdx_80B_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zu9k72jfeTO3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 9 &#8211; <span id="xdx_829_z8gzFYWS9CYc">RELATED PARTY TRANSACTIONS</span> </b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b>&#160;</b></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">A.</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Long-term debt consists of two note payables with a related party:</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify; text-indent: -18pt">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 72px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">1)</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On October 31, 2018, Kona issued a Standard Promissory Note in favor of Robert Clark, as lender, in the original principal amount of $<span id="xdx_908_eus-gaap--DebtInstrumentFaceAmount_c20181031__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Principal amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2018-10-31_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">20,000</ix:nonFraction></span>. Mr. Clark is the Company&#8217;s President, Chief Executive Officer, Secretary, and Chairman of the Board. The note bears no interest. Principal payments of $<span id="xdx_90E_eus-gaap--DebtInstrumentPeriodicPayment_c20181001__20181031__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Principal payment"><ix:nonFraction name="us-gaap:DebtInstrumentPeriodicPayment" contextRef="From2018-10-012018-10-31_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">500</ix:nonFraction></span> per month commenced in February 2019, with the final payment due in April 2021. At September 30, 2021, this note had been paid in full. At December 31, 2020 the balance of this note was $<span id="xdx_901_eus-gaap--NotesPayableRelatedPartiesClassifiedCurrent_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Note payable related party"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" contextRef="AsOf2020-12-31_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">8,500</ix:nonFraction></span>.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 72pt; text-align: justify; text-indent: -18pt">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 72px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">2)</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On February 19, 2019, Gold Leaf issued a Standard Promissory Note in Favor of Robert Clark, as lender, in the original principal amount of $<span id="xdx_901_eus-gaap--DebtInstrumentFaceAmount_c20190219__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Principal amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2019-02-19_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">70,000</ix:nonFraction></span>. The note bears no interest. Principal payments of $<span id="xdx_905_eus-gaap--DebtInstrumentPeriodicPayment_c20190201__20190219__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Principal payment"><ix:nonFraction name="us-gaap:DebtInstrumentPeriodicPayment" contextRef="From2019-02-012019-02-19_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">500</ix:nonFraction></span> per month commenced in March 2019, with final payment due in March 2021. On March 15, 2021, Gold Leaf issued an Amendment to the original issued Standard Promissory Note in Favor of Robert Clark for the remaining outstanding principle of $<span id="xdx_90D_ecustom--RemainingOutstandingPrinciple_c20210315_pp0p0" title="Remaining outstanding principle"><ix:nonFraction name="kgkg:RemainingOutstandingPrinciple" contextRef="AsOf2021-03-15" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">58,000</ix:nonFraction></span>. Principal payment of $<span id="xdx_905_eus-gaap--DebtInstrumentPeriodicPayment_c20210301__20210315_pp0p0" title="Principal payment"><ix:nonFraction name="us-gaap:DebtInstrumentPeriodicPayment" contextRef="From2021-03-012021-03-15" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">500</ix:nonFraction></span> per month, with final payment due in March 2022. The outstanding principal balance of this note at September 30, 2021 and December 31, 2020 was $<span id="xdx_907_eus-gaap--NotesPayableRelatedPartiesClassifiedCurrent_c20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Note payable related party"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" contextRef="AsOf2021-09-30_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">55,000</ix:nonFraction></span> and $<span id="xdx_901_eus-gaap--NotesPayableRelatedPartiesClassifiedCurrent_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Note payable related party"><ix:nonFraction name="us-gaap:NotesPayableRelatedPartiesClassifiedCurrent" contextRef="AsOf2020-12-31_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">59,500</ix:nonFraction></span>, respectively.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 72pt; text-align: justify; text-indent: -18pt">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt">The future maturities are as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfMaturitiesOfLongTermDebtTableTextBlock"><table cellspacing="0" cellpadding="0" id="xdx_886_eus-gaap--ScheduleOfMaturitiesOfLongTermDebtTableTextBlock_z5UI5BNGwotj" summary="xdx: Disclosure - RELATED PARTY TRANSACTIONS (Details)" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td style="line-height: 107%"><span id="xdx_8B4_zdOvOaHwvNed" style="display: none">Schedule of future maturities</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_494_20210930_za7ldPdM3K54" style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr id="xdx_405_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: white">
    <td style="line-height: 107%; width: 73%"><span style="font: 10pt Times New Roman, Times, Serif">December 31, 2021 (remaining
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    <td style="line-height: 107%; width: 10%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1pt solid; line-height: 107%; width: 1%"><span style="font: 10pt Times New Roman, Times, Serif">$&#160;</span></td>
    <td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; width: 15%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">55,000</ix:nonFraction></span></td>
    <td style="line-height: 107%; width: 1%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr id="xdx_404_eus-gaap--LongTermDebt_iI_pp0p0" style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif; color: rgb(204,238,238)">&#160;Long-term Debt</span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 2.25pt double; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b><ix:nonFraction name="us-gaap:LongTermDebt" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">55,000</ix:nonFraction></b></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
</table></ix:nonNumeric>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">B.</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Lines of credit consists of two agreements with a related party:</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify; text-indent: -18pt">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 72px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">1)</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On April 4, 2019, Kona entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $<span id="xdx_909_ecustom--LineOfCreditFromRelatedParty_c20190404__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Line of credit from related party"><ix:nonFraction name="kgkg:LineOfCreditFromRelatedParty" contextRef="AsOf2019-04-04_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span>. Advances under this line of credit bear interest at the rate of <span id="xdx_900_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_dp_c20190401__20190404__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_zR1TTwBlIbx6" title="Line of credit interest rate"><ix:nonFraction name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" contextRef="From2019-04-012019-04-04_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.75</ix:nonFraction></span> percent per annum. The line of credit matures on April 4, 2022, at which time all outstanding principal amounts and accrued interest are due and payable. &#160;At September 30, 2021 and December 31, 2020, outstanding principal was $<span id="xdx_90A_eus-gaap--LineOfCredit_c20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Lline of credit"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2021-09-30_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,372,651</ix:nonFraction></span> and $<span id="xdx_90C_eus-gaap--LineOfCredit_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Lline of credit"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2020-12-31_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,369,651</ix:nonFraction></span>, respectively, and accrued interest was $<span id="xdx_909_eus-gaap--InterestPayableCurrent_c20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2021-09-30_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">73,906</ix:nonFraction></span> and $<span id="xdx_903_eus-gaap--InterestPayableCurrent_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KonaGoldLLCMember_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2020-12-31_custom_KonaGoldLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">36,397</ix:nonFraction></span>, respectively.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 72pt; text-align: justify; text-indent: -18pt">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 72px; line-height: 107%">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">2)</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On August 29, 2019, Gold Leaf entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $<span id="xdx_907_ecustom--LineOfCreditFromRelatedParty_c20190829__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Line of credit from related party"><ix:nonFraction name="kgkg:LineOfCreditFromRelatedParty" contextRef="AsOf2019-08-29_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span>. Advances under this line of credit bear interest at the rate of <span id="xdx_906_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_dp_c20190801__20190829__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_zIO52vjETBm5" title="Line of credit interest rate"><ix:nonFraction name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" contextRef="From2019-08-012019-08-29_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.75</ix:nonFraction></span> percent per annum. The line of credit matures on August 29, 2021, at which time all outstanding principal amounts and accrued interest are due and payable. At September 30, 2021 and December 31, 2020, outstanding principal was $<span id="xdx_905_eus-gaap--LineOfCredit_c20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Lline of credit"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2021-09-30_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">125,500</ix:nonFraction></span> and $<span id="xdx_90E_eus-gaap--LineOfCredit_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Lline of credit"><ix:nonFraction name="us-gaap:LineOfCredit" contextRef="AsOf2020-12-31_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">100,000</ix:nonFraction></span>, respectively, and accrued interest was $<span id="xdx_909_eus-gaap--InterestPayableCurrent_c20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2021-09-30_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,065</ix:nonFraction></span> and $<span id="xdx_903_eus-gaap--InterestPayableCurrent_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GoldLeafLLCMember_pp0p0" title="Accrued interest"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2020-12-31_custom_GoldLeafLLCMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,545</ix:nonFraction></span>, respectively.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_239_zfelorvpx3q9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence -->&#160;</p></div>
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_239_zt691jXWjKn1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_237_zdF4TFLQRT86" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_236_zSJHIXjvh0Jl" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zLOAEAEgHD8a" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_231_zoB5icr5XLh2" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:SecuritiesPurchaseAgreementDerivativeLiabilitiesAnd2020WarrantTextBlock"><p id="xdx_804_ecustom--SecuritiesPurchaseAgreementDerivativeLiabilitiesAnd2020WarrantTextBlock_zWmIbd8WHBd4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; text-indent: -36pt"><b>&#160;NOTE
10 &#8211;<span id="xdx_82C_zEniJ05pq57i"> SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; text-indent: -36pt">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><i>2020 Securities Purchase
Agreement</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In May 2020, the Company completed
the 2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the
First 2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second
2020 Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third
2020 Debenture promptly after the SEC declared the 2020 Registration Statement effective. The 2020 Debentures are due 12 months
from their respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each of its subsidiaries
pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s subsidiaries, and the Company.
Initially, the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $<span id="xdx_90C_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20200531_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2020-05-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.05</ix:nonFraction></span> per share, subject
to adjustment (the &#8220;2020 Fixed Conversion Price&#8221;), or (ii) 80% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;)
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the &#8220;2020
Market Conversion Price&#8221;). The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. The
2020 Debentures are subject to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any portion
of the 2020 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of
the Common Stock issuable upon conversion of the 2020 Debentures or exercise of the 2020 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at
least 65 days&#8217; prior written notice to the Company. The 2020 Debentures accrue interest at an annual rate equal to 8% and
are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2020 Debentures or otherwise
accelerates the maturity date, as provided for in the 2020 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the 2020 Debentures) are then satisfied, in shares of the Common Stock at the 2020 Market Conversion
Price on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">At the Company&#8217;s option,
it has the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their
respective maturity dates; <i>provided</i>, <i>that</i>, as of the date of the holder&#8217;s receipt of the redemption notice,
(i) the VWAP of the Common Stock is less than the 2020 Fixed Conversion Price, initially $0.05 per share, and (ii) there is no
Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued
interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption
Premium&#8221;). The Company must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption,
setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The 2020 Debentures contain
an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits,
reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result
in an adjustment of the conversion price of the 2020 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the
Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the
Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company
also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses
incurred by the Company in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling
Stockholder.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_238_z3KIJQAEaDva" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 27; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23C_zWPRs3Mu0wqg" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_232_z4BVHwwBuAvb" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_z6y0izp8C2Q3" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_235_zob8IoZYatgk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_235_zqvuaYrM2cif" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the 2020 SPA, the
purchase price for the First 2020 Debenture was $<span id="xdx_901_eus-gaap--DebtInstrumentFaceAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pp0p0" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">250,000</ix:nonFraction></span>, less $<span id="xdx_90A_eus-gaap--DebtInstrumentFeeAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pp0p0" title="Origination fees"><ix:nonFraction name="us-gaap:DebtInstrumentFeeAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">15,000</ix:nonFraction></span> for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $<span id="xdx_90C_ecustom--OriginalIssueDiscount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pp0p0" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span> and $<span id="xdx_901_ecustom--StructuringFee_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pp0p0" title="Structuring fee"><ix:nonFraction name="kgkg:StructuringFee" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5,000</ix:nonFraction></span> as a structuring fee. On December 23, 2020, the Company converted $<span id="xdx_90F_eus-gaap--ConversionOfStockAmountConverted1_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">100,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,274</ix:nonFraction></span> of accrued interest on, the First 2020 Debenture into <span id="xdx_905_eus-gaap--ConversionOfStockSharesConverted1_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,255,438</ix:nonFraction></span> shares of the Company&#8217;s common stock. On
January 25, 2021, the Company converted $<span id="xdx_90F_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,118</ix:nonFraction></span> of accrued interest on, the First 2020 Debenture
into <span id="xdx_907_eus-gaap--ConversionOfStockSharesConverted1_c20200101__20200125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2020-01-012020-01-25_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,094,732</ix:nonFraction></span> shares of the Company&#8217;s common stock, see Note 12, <i>Equity Transactions</i>. At March 31, 2021, no balance
remains on the First 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the 2020 SPA, the
purchase price for the Second 2020 Debenture was $<span id="xdx_90C_eus-gaap--DebtInstrumentFaceAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pp0p0" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">250,000</ix:nonFraction></span>, less $<span id="xdx_904_eus-gaap--DebtInstrumentFeeAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pp0p0" title="Origination fees"><ix:nonFraction name="us-gaap:DebtInstrumentFeeAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span> for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $<span id="xdx_903_ecustom--OriginalIssueDiscount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pp0p0" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span> fee. On January 25, 2021, the Company converted $<span id="xdx_90E_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">100,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,410</ix:nonFraction></span> of accrued
interest on, the Second 2020 Debenture into <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">5,183,613</ix:nonFraction></span> shares of the Company&#8217;s common stock. On February 19, 2021, the Company
converted $<span id="xdx_90B_eus-gaap--ConversionOfStockAmountConverted1_c20210201__20210219__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-02-012021-02-19_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_903_eus-gaap--ConversionOfStockAmountConverted1_c20210201__20210219__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-02-012021-02-19_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">855</ix:nonFraction></span> of accrued interest on, the Second 2020 Debenture into <span id="xdx_90B_eus-gaap--ConversionOfStockSharesConverted1_c20210201__20210219__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-02-012021-02-19_custom_SecuritiesPurchaseAgreement2Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,252,634</ix:nonFraction></span> shares of the
Company&#8217;s common stock see Note 12, <i>Equity Transactions</i>. At March 31, 2021, no balance remains on the First 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the 2020 SPA, the
purchase price for the Third 2020 Debenture was $<span id="xdx_905_eus-gaap--DebtInstrumentFaceAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement3Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pp0p0" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement3Member_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">500,000</ix:nonFraction></span>, less $<span id="xdx_902_eus-gaap--DebtInstrumentFeeAmount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement3Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pp0p0" title="Origination fees"><ix:nonFraction name="us-gaap:DebtInstrumentFeeAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement3Member_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span> for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $<span id="xdx_908_ecustom--OriginalIssueDiscount_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement3Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pp0p0" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreement3Member_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span> fee. On January 12, 2021, the Company converted $<span id="xdx_90C_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210112__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-12_custom_SecuritiesPurchaseAgreement2Member_custom_Third2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_90D_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210112__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-12_custom_SecuritiesPurchaseAgreement2Member_custom_Third2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,425</ix:nonFraction></span> of accrued
interest on, the First 2020 Debenture into <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210112__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2Member__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-01-12_custom_SecuritiesPurchaseAgreement2Member_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,887,819</ix:nonFraction></span> shares of the Company&#8217;s common stock, see Note 12, <i>Equity Transactions</i>.
On May 5, 2021, the Company converted $300,000 of the principal of, and $<span id="xdx_901_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement3Member__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_SecuritiesPurchaseAgreement3Member_custom_First2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,496</ix:nonFraction></span> of accrued interest on, the First 2020 Debenture
into issued an aggregate of <span id="xdx_908_eus-gaap--ConversionOfStockSharesConverted1_c20210201__20210219__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement3Member__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-02-012021-02-19_custom_SecuritiesPurchaseAgreement3Member_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">14,436,426</ix:nonFraction></span> shares of common stock, see Note 12, <i>Equity Transactions</i>. At September 30, 2021,
no balance remains on the Third 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><i>February 2021 Securities
Purchase Agreement</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><i>&#160;</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In February 2021, the Company
completed a private placement transaction (the &#8220;February 2021 Private Placement&#8221;) of two secured convertible debentures
(the &#8220;February 2021 Debentures&#8221;), convertible for up to <span id="xdx_900_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20210201__20210228__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2021Member_zcHdhwZPyFe6" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-02-012021-02-28_custom_SecuritiesPurchaseAgreement2021Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">154,958,678</ix:nonFraction></span>
shares (the &#8220;February 2021 Conversion Shares&#8221;) of Common Stock and granted a Warrant to purchase Common Stock (the
&#8220;February 2021 Warrant&#8221;), exercisable for up to <span id="xdx_90E_eus-gaap--ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeNumberOfExercisableOptions_iI_c20210228__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement2021Member_zhEOILVlQIO9" title="Exercisable shares"><ix:nonFraction name="us-gaap:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeNumberOfExercisableOptions" contextRef="AsOf2021-02-28_custom_SecuritiesPurchaseAgreement2021Member" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction></span>
shares of Common Stock (the &#8220;February 2021 Warrant Shares&#8221;),
pursuant to that certain Securities Purchase Agreement between the Selling stockholder and the Company, dated as of February 10, 2021
(the &#8220;February 2021 SPA&#8221;). The Company sold and issued the initial February 2021 Debenture (the &#8220;First February 2021
Debenture&#8221;) and granted the February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue
the second February 2021 Debenture (the &#8220;Second February 2021 Debenture&#8221;) promptly after the SEC declares effective the February
2021 Registration Statement (as defined below).</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_230_zlW8MmXrRz2f" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_238_zDnc4mBSmnd4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_239_z4QRlyCwdf2" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_z6Z05MesOo67" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_z00YiLr2raPi" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_238_zDAQIF7SzGM8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><br />
The February 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company&#8217;s
assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the
Company&#8217;s subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed
conversion price, which is $0.03 per share, subject to adjustment (the &#8220;February 2021 Fixed Conversion Price&#8221;), or (ii) 80%
of the lowest daily volume weighted average price (&#8220;VWAP&#8221;) of our Common Stock during the 15 trading days immediately preceding
the conversion date, subject to adjustment (the &#8220;February 2021 Market Conversion Price&#8221;). The February 2021 Debentures contain
an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock
splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also
result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject to a &#8220;conversion
blocker&#8221; such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures that would result in the
Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the February 2021
Debentures or exercise of the February 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder
can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at least 65 days&#8217; prior written notice to the Company. The
February 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or
sooner if the Selling Stockholder converts the February 2021 Debentures or otherwise accelerates the maturity date, as provided for in
the February 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the February 2021 Debentures)
are then satisfied, in shares of the Common Stock at the February 2021 Market Conversion Price on the trading day immediately prior to
the date paid.</p></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">At the Company&#8217;s option, it has the
right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP of the Common Stock
is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The
Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption
premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;). The Company must provide
the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the amount of principal and interest
we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the February 2021 Debentures.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;<br /> Pursuant to
the February 2021 SPA, the purchase price for the First February 2021 Debenture was $<span id="xdx_90E_eus-gaap--SupplementalDeferredPurchasePrice_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_ztVPlVsAPtal"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">900,000</ix:nonFraction></span>,
less $<span id="xdx_907_eus-gaap--AmortizationOfDeferredLoanOriginationFeesNet_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_zhVqAO9gBOy"><ix:nonFraction name="us-gaap:AmortizationOfDeferredLoanOriginationFeesNet" contextRef="From2021-01-012021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">41,000</ix:nonFraction> </span>for
origination fees, which consisted of the &#8220;original issue discount&#8221; of $<span id="xdx_901_ecustom--OriginalIssueDiscount_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_zSZZYLIIqkHa"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">36,000</ix:nonFraction> </span>and
$<span id="xdx_902_ecustom--StructuringFee_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First2021DebentureMember_z8tUWaMabhEi"><ix:nonFraction name="kgkg:StructuringFee" contextRef="AsOf2021-09-30_custom_First2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5,000</ix:nonFraction> </span>as
a structuring fee. Pursuant to the February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $<span id="xdx_90D_eus-gaap--SupplementalDeferredPurchasePrice_pp0p0_c20210101__20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021DebentureMember_ztBIzrnJeS43"><ix:nonFraction name="us-gaap:SupplementalDeferredPurchasePrice" contextRef="From2021-01-012021-09-30_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">600,000</ix:nonFraction></span>,
less $<span id="xdx_90B_ecustom--OriginalIssueDiscount_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--Second2021DebentureMember_zyV7dQ0mZ6J3"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">24,000</ix:nonFraction> </span>as
an &#8220;original issue discount.&#8221;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In connection with the February 2021 Private
Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock.
The February 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment.
If the Company fails to maintain an effective registration statement with the SEC covering the resale of the February 2021 Warrant Shares,
or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the February 2021 Warrant on
a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event of default under the February 2021 SPA or the February 2021
Debentures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The February 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the February 2021 Warrant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_239_zpIXnTs5j3lh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_23E_zAbqtFSnBpyg" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_231_zT7u7VvqQHQ9" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zHp9VgTTN0Oa" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_232_zlvYH2OsbT9a" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><br />
The February 2021 Warrant is subject to an &#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion
of the February 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common
Stock issuable upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised
or converted, respectively). The Selling Stockholder can increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65
days&#8217; prior written notice to the Company.</p></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the February 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the &#8220;February
2021 Registration Statement&#8221;) with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant
Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file
the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the February 2021 Registration Statement
will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in
connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares held by the Selling Stockholder.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the February 2021 SPA, the purchase
price for the First February 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the &#8220;original issue
discount&#8221; of $36,000 and $5,000 as a structuring fee.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">At September 30, 2021, the principal balance
of the First February 2021 Debenture is $900,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On May 5, 2021, the Company
and YA II PN, LTD entered into a Limited Amendment Agreement dated as of May 5, 2021, by and between Kona Gold Beverage, Inc.,
a Delaware corporation (the &#8220;Company&#8221;), and YA II PN, LTD., a Cayman Islands exempt company (&#8220;Investor&#8221;).
The Company and the Investor agree to a partial Second Closing, whereby the Investor will purchase a portion of the intended Second
Convertible Debenture (the &#8220;Partial Second Convertible Debenture&#8221;) in the face amount of $<span id="xdx_902_eus-gaap--DebtInstrumentFaceAmount_c20210505_pp0p0" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-05-05" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> for a purchase price
of $<span id="xdx_905_ecustom--ConvertibleDebenturePurchasePrice_c20210505_pp0p0" title="Convertible debenture purchase price"><ix:nonFraction name="kgkg:ConvertibleDebenturePurchasePrice" contextRef="AsOf2021-05-05" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">192,000</ix:nonFraction></span> (the &#8220;Partial Second Convertible Debenture Purchase Price&#8221;) within 1 business day following the date hereof.
The Investor and the Company entered into a Securities Purchase Agreement (the &#8220;Securities Purchase Agreement&#8221;), Registration
Rights Agreement (the &#8220;Registration Rights Agreement&#8221;) and related Transaction Documents (as this term is defined in
the Securities Purchase Agreement) dated February 10, 2021, the date thereof, pursuant to which the Investor agreed to purchase
secured Convertible Debentures (individually referred to as the &#8220;First Convertible Debenture&#8221; and the &#8220;Second
Convertible Debenture&#8221;) upon various conditions precedent as articulated in Section 8(a) and (b) of the Securities Purchase
Agreement and in the Transaction Documents, see above Note 9 &#8211; Securities Purchase Agreement, Derivative Liabilities, And
Warrant.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_239_zqw0Z9wMLsgd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_234_zgx96QvC0iZ2" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zqWklsluhuMd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zjcKtmvNmPK2" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_230_z2DlF9b7ysU1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">Pursuant to the February 2021 SPA,
the purchase price for the Second February 2021 Debenture was $600,000, less $200,000 for the &#8220;Partial Second Convertible Debenture&#8221;,
dated May 5, 2021, less for origination fees, which consisted of the &#8220;original issue discount&#8221; of $16,000. On June 9, 2021,
the Company converted $200,000 of the principal of, and $1,578 of accrued interest on the Second February 2021 Debenture into 6,719,269
shares of the Company&#8217;s common stock see Note 11, <i>equity transactions</i>. At September 30, 2021, no balance remains on the
Second February 2021 Debenture.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify"><i>August 2021 Securities Purchase Agreement</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify"><i>&#160;</i></p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">In August 2021, the Company completed
a private placement transaction (the &#8220;August 2021 Private Placement&#8221;) of two secured convertible debentures (the &#8220;August
2021 Debentures&#8221;), convertible for up to 1,111,111,110 shares (the &#8220;August 2021 Conversion Shares&#8221;) of Common Stock
and granted a Warrant to purchase Common Stock (the &#8220;August 2021 Warrant&#8221;), exercisable for up to 100,000,000 shares of Common
Stock (the &#8220;August 2021 Warrant Shares&#8221;), pursuant to that certain Securities Purchase Agreement between the Selling stockholder
and the Company, dated as of August 20, 2021 (the &#8220;August 2021 SPA&#8221;). The Company sold and issued the initial August 2021
Debenture (the &#8220;First August 2021 Debenture&#8221;) and granted the August 2021 Warrant promptly after entering in the August 2021
SPA. The Company will sell and issue the second August 2021 Debenture (the &#8220;Second August 2021 Debenture&#8221;) promptly after
the SEC declares effective the August 2021 Registration Statement (as defined below).</p>

<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">The August 2021 Debentures are due 12 months
from their respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each of its subsidiaries pursuant
to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s subsidiaries, and the Company. Initially,
the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment
(the &#8220;August 2021 Fixed Conversion Price&#8221;), or (ii) 75% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;)
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the &#8220;August 2021
Market Conversion Price&#8221;). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The
August 2021 Debentures are subject to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any portion
of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common
Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted or
exercised, respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at least 65 days&#8217;
prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable
on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise accelerates
the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions
(as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion Price
on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">At the Company&#8217;s option, it has the
right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP of the Common Stock
is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company
must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption
premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;). The Company must provide
the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the amount of principal and interest
we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 36pt; text-align: justify">The August 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the August 2021 Debentures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_231_zUh1D8GLjIZ4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_23E_zZFCg8NLsKcl" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_239_zHtLO7qhRJ5g" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zvLpQHSs0Dx2" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zTVwp5jGotul" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_234_zcxyAtSVGymj" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><br />
Pursuant to the August 2021 SPA, the purchase price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination
fees, which consisted of the &#8220;original issue discount&#8221; of $60,000 and $10,000 as a structuring fee. Pursuant to the August
2021 SPA, the purchase price for the Second August 2021 Debenture will be $1,500,000, less $10,000 as an &#8220;original issue discount.&#8221;</p></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In connection with the August 2021 Private
Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of 100 million shares of the Common Stock.
The August 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment.
If the Company fails to maintain an effective registration statement with the SEC covering the resale of the August 2021 Warrant Shares,
or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the August 2021 Warrant on a
&#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event of default under the August 2021 SPA or the August 2021 Debentures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The August 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the August 2021 Warrant.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The August 2021 Warrant is subject to an
&#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant
or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65 days&#8217; prior written notice to the Company.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the terms of the August 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the &#8220;August
2021 Registration Statement&#8221;) with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant
Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the
August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement
will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_23F_z5Sdqp3EzmJg" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_233_z95gepmZR9mh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_239_zoeiOMlvOlA5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_232_zOHP0Il7wFRi" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_z4moXFhe6fkd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23A_zKW3SCRFaDB" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Pursuant to the August 2021 SPA,
the purchase price for the First August 2021 Debenture was $<span id="xdx_906_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First20212DebentureMember_zhOcuq4JonYa" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span>,
less $<span id="xdx_904_eus-gaap--DebtInstrumentFeeAmount_iI_pp0p0_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First20212DebentureMember_zKB6jTkxFVVh" title="Origination fees"><ix:nonFraction name="us-gaap:DebtInstrumentFeeAmount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">70,000</ix:nonFraction></span>
for origination fees, which consisted of the &#8220;original issue discount&#8221; of $<span id="xdx_905_ecustom--OriginalIssueDiscount_iI_pp0p0_c20210930__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First20212DebentureMember_zFFwgdX7Lakk" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-09-30_custom_SecuritiesPurchaseAgreementMember_custom_First20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">60,000</ix:nonFraction></span>
and $<span id="xdx_908_ecustom--StructuringFee_iI_pp0p0_c20210930__us-gaap--DerivativeInstrumentRiskAxis__custom--First20212DebentureMember_zi4Dk1WhSK4b" title="Structuring fee"><ix:nonFraction name="kgkg:StructuringFee" contextRef="AsOf2021-09-30_custom_First20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,000</ix:nonFraction></span>
as a structuring fee. At September 30, 2021, the principal balance of the First August 2021 Debenture is $1,500,000.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt"><i>Derivative Liability</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The 2020 Debentures and the
2021 Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of
the First 2020 Debenture. The estimated fair value of the 2020 Debentures and the 2021 Debentures have been calculated using the
Black-Scholes fair value option-pricing model with key input variables provided by management, as of the date of issuance, with
the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded as gains
or losses on revaluation in other income (expense). The Company identified embedded features in the 2020 Debentures and the 2021
Debentures, which caused the 2020 Debentures and the 2021 Debentures to be classified as a liability. These embedded features included
the right for the holder to request for the Company to settle the amounts owed pursuant to the 2020 Debentures and the 2021 Debentures
to the holder by paying an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the 2020 Debentures
and the 2021 Debentures on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial
instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a
derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance
sheet date.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The derivative liabilities
were valued using Black-Scholes pricing model with the following average assumptions:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_883_eus-gaap--ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock_zAkKUwg7rqdl" summary="xdx: Disclosure - SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8BF_zqeddKVElpLa" style="display: none">Schedule of derivative liabilities</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30,&#160;2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%">Stock Price</td><td style="width: 10%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Exercise Price</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_c20210930_pdd" title="Exercise Price" style="text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0124</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Expected Life</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Volatility</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Dividend Yield</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk-Free Interest Rate</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Fair Value</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_c20210930_pp0p0" title="Fair Value" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,225,741</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following table summarizes
the changes in the Company&#8217;s assets and liabilities measured at fair value as of September 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_889_eus-gaap--ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock_zacofag2zCz8" summary="xdx: Disclosure - SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details 1)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center"><span id="xdx_8BC_zOF9qh8Aln0l" style="display: none">Schedule of assets and liabilities measured at fair value</span></td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">March 31, 2021</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Quoted prices in Active Markets for Identical Assets<br />
(Level 1)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Significant Other Observable Inputs<br />
(Level 2)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Significant Unobservable Inputs<br />
(Level 3)</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: left">Convertible promissory notes with embedded conversion option</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--DerivativeLiabilities_iI_pp0p0_c20210930__us-gaap--LongtermDebtTypeAxis__custom--ConvertiblePromissoryNotesMember_z2NsyRA5nF79" title="Derivative liability" style="border-bottom: Black 1pt solid; width: 10%; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2021-09-30_custom_ConvertiblePromissoryNotesMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,225,741</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; width: 10%; text-align: right"></td><td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_988_eus-gaap--DerivativeLiabilities_c20210930_pp0p0" title="Derivative liability" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,225,741</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_237_zYQwB8ay2QIa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence -->&#160;</p></div>
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_237_zBEd0hYQduif" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_233_znWbR971Pmdk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23D_zWI5PTDwSkr7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zJTEV6wWzjkk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23E_zegRa3T48nBf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following table sets forth
a summary of change in fair value of the Company&#8217;s derivative liabilities for the year ended September 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:SummaryOfChangeInFairValueOfDerivativeLiabilityTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_88B_ecustom--SummaryOfChangeInFairValueOfDerivativeLiabilityTableTextBlock_zjqhA59T4mha" summary="xdx: Disclosure - SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details 2)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8B7_zUUwCsSsr65h" style="display: none">Summary of change in fair value of derivative liability</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Fair value, January 1, 2020</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_98C_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20200101__20200630_zCm9j3ZaBjlg" title="Fair value at beginning" style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1451">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98C_eus-gaap--DerivativeGainLossOnDerivativeNet_pp0p0_c20200101__20200630_z4j8KH5PnXV9" title="Change in fair value of embedded conversion features of debenture included in earnings" style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1453">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%; text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2020 debenture</td><td style="width: 10%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td id="xdx_98E_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_pp0p0_c20200101__20200630_zygNBtCOpgfj" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; width: 18%; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2020-01-012020-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">148,628</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Fair value, June 30, 2020</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_98F_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20200701__20200930_zmu9Zkn3ql52" title="Fair value at beginning" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2020-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">148,628</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98A_eus-gaap--DerivativeGainLossOnDerivativeNet_pp0p0_c20200701__20200930_zmCoM9T6BG8f" title="Change in fair value of embedded conversion features of debenture included in earnings" style="text-align: right">(<ix:nonFraction name="us-gaap:DerivativeGainLossOnDerivativeNet" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">39,725</ix:nonFraction></td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2020 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_98F_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_pp0p0_c20200701__20200930_zuBlRPSOuXdl" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">108,903</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Fair value, September 30, 2020</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_98B_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20201001__20201231_zxwNdvLIGgc9" title="Fair value at beginning" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">217,806</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_989_eus-gaap--DerivativeGainLossOnDerivativeNet_pp0p0_c20201001__20201231_zDuPVqPdNOeb" title="Change in fair value of embedded conversion features of debenture included in earnings" style="text-align: right">(<ix:nonFraction name="us-gaap:DerivativeGainLossOnDerivativeNet" contextRef="From2020-10-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">69,051</ix:nonFraction></td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2020 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_982_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_pp0p0_c20201001__20201231_zEd4QKqFcAr5" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2020-10-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">212,397</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Fair value, December 31, 2020</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_986_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20210101__20210331_zcT8qmB2bYt" title="Fair value at beginning" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">361,152</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_982_eus-gaap--DerivativeGainLossOnDerivativeNet_c20210101__20210331_pp0p0" title="Change in fair value of embedded conversion features of debenture included in earnings" style="text-align: right">(<ix:nonFraction name="us-gaap:DerivativeGainLossOnDerivativeNet" contextRef="From2021-01-012021-03-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">202,443</ix:nonFraction></td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2021 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_98D_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_c20210101__20210331_pp0p0" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2021-01-012021-03-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">468,309</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Fair value, March 31, 2021</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td id="xdx_984_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20210401__20210630_zx8GaTZb9Dwg" title="Fair value at beginning" style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2021-03-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">627,018</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_987_eus-gaap--DerivativeGainLossOnDerivativeNet_pp0p0_c20210401__20210630_z9GXPgkM9VQc" title="Change in fair value of embedded conversion features of debenture included in earnings" style="text-align: right">(<ix:nonFraction name="us-gaap:DerivativeGainLossOnDerivativeNet" contextRef="From2021-04-012021-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">307,585</ix:nonFraction></td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of February 2021
    debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_98E_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_pp0p0_c20210401__20210630_zzIJHAFeAbEf" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2021-04-012021-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">166,088</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Fair value, June 30, 2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td id="xdx_982_eus-gaap--DerivativeLiabilities_iS_pp0p0_c20210701__20210930_ztoJo5S4tTw9" title="Fair value at beginning" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2021-06-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">485,521</ix:nonFraction></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</td><td id="xdx_986_eus-gaap--DerivativeGainLossOnDerivativeNet_pp0p0_c20210701__20210930_zlj0HQNaGEt7" title="Change in fair value of embedded conversion features of debenture included in earnings" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(<ix:nonFraction name="us-gaap:DerivativeGainLossOnDerivativeNet" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">120,306</ix:nonFraction></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of August 2021
    debentures</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</td><td id="xdx_984_ecustom--EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture_pp0p0_c20210701__20210930_z4gcPLpNCAyl" title="Embedded conversion option liability recorded in connection with the issuance of debenture" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="kgkg:EmbeddedConversionOptionLiabilityRecordedInConnectionWithIssuanceOfDebenture" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">860,526</ix:nonFraction></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Fair value, September 30, 2021</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_988_eus-gaap--DerivativeLiabilities_iE_pp0p0_c20210701__20210930_zZEVN5S2Opdc" title="Fair value at beginning" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:DerivativeLiabilities" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,225,741</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table></ix:nonNumeric>

<p id="xdx_8A6_zVWcR61N2Zbf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><i>Warrant</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company also granted the
2020 Warrant, February 2021 Warrant, and the August 2021 Warrant to purchase up to an aggregate of <span id="xdx_903_ecustom--PurchaseUpToAggregateShares_pdn3_dm_c20210101__20210930__us-gaap--AwardTypeAxis__custom--Warrant2020Member_zxFMIRGmRgL3" title="Purchase up to an aggregate"><ix:nonFraction name="kgkg:PurchaseUpToAggregateShares" contextRef="From2021-01-012021-09-30_custom_Warrant2020Member" format="ixt:numdotdecimal" decimals="INF" scale="6" unitRef="Shares">20</ix:nonFraction></span>
million shares, <span id="xdx_903_ecustom--PurchaseUpToAggregateShares_pdn3_dm_c20210101__20210930__us-gaap--AwardTypeAxis__custom--Warrant2021Member_zkt2vtD80bac" title="Purchase up to an aggregate"><ix:nonFraction name="kgkg:PurchaseUpToAggregateShares" contextRef="From2021-01-012021-09-30_custom_Warrant2021Member" format="ixt:numdotdecimal" decimals="INF" scale="6" unitRef="Shares">50</ix:nonFraction></span>
million, and <span id="xdx_90A_ecustom--PurchaseUpToAggregateShares_pdn3_dm_c20210101__20210930__us-gaap--AwardTypeAxis__custom--Warrant20212Member_z9xq1h4ziyCg" title="Purchase up to an aggregate"><ix:nonFraction name="kgkg:PurchaseUpToAggregateShares" contextRef="From2021-01-012021-09-30_custom_Warrant20212Member" format="ixt:numdotdecimal" decimals="INF" scale="6" unitRef="Shares">100</ix:nonFraction></span>
million shares of Common Stock, respectively. Each of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant has a
three-year term. The 2020 Warrant is immediately exercisable at an exercise price of $0.05 per share, subject to adjustment. Each of
the February 2021 Warrant and the August 2021 Warrant is immediately exercisable at an exercise price of $<span id="xdx_905_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice_c20210930_pdd" title="Exercise price"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.03</ix:nonFraction></span>
per share, subject to adjustment.&#160;If the Company fails to maintain an effective registration statement
with the SEC covering the resale of the 2020 Warrant Shares, the February 2021 Warrant Shares, and the August 2021 Warrant Shares, or
if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise, respectively, the 2020 Warrant,
the February 2021 Warrant, and the August 2021 Warrant on a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event
of default under the 2020 SPA, the February 2021 SPA and the August 2021 SPA or the 2020 Debentures, February 2021 Debentures and the
August 2021 Debentures,  respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_239_zDBNsZL0TqH9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 34; Value: 1 -->
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_237_zR4NxC4xRb69" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23A_zDop1uqY3UWh" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_234_zcn5y7oDuOVd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zfQ9bSMaN3vi" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_232_z0RTmQbCwfp2" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The 2020 Warrant, February 2021
Warrant, and the August 2021 Warrant, respectively, each contains an adjustment provision that, subject to certain exceptions, reduces
the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current
exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively. Any stock splits, reverse stock
splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment
of the exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Each of the 2020 Warrant, February 2021 Warrant,
and the August 2021 Warrant is subject to an &#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion
of any of those warrants if such exercise would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common
Stock issuable, respectively, upon exercise of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant or conversion of the
2020 Debentures, February 2021 Debentures, and the August 2021 Debentures, respectively, that had not then been exercised or converted,
respectively). The Selling Stockholder can increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65 days&#8217; prior
written notice to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">During the year ended December 31,
2020, the Company granted the 2020 Warrant that was immediately exercisable for up to <span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_c20201231_pdd"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">20,000,000</ix:nonFraction>
</span>shares of Common Stock. During the three months ended March 31, 2021, the Company granted the February 2021 Warrant that was immediately
exercisable for up to <span id="xdx_902_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iI_c20210331_zJKs8isUPHP6"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber" contextRef="AsOf2021-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction>
</span>shares of Common Stock. During the three months ended September 30, 2021,
the Company granted the August 2021 Warrant that was immediately exercisable for up to 100,000,000 shares of Common Stock. Each of the
2020 Warrant, February 2021 Warrant, and the August 2021 Warrant was fully expensed as an interest expense related to the respective 2020
Warrant, February 2021 Warrant, and the August 2021 Warrant that was issued in connection with the consummation of the transactions contemplated
by the 2020 SPA, the February 2021 SPA, and the August 2021 SPA, respectively, and no liability was recorded as of September 30, 2021
and December 31, 2020, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:PaycheckProtectionProgramLoanTextBlock"><p id="xdx_809_ecustom--PaycheckProtectionProgramLoanTextBlock_zSJIyxCXhoWi" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 11 &#8211; <span id="xdx_824_zNdr0LM7pTn9">PAYCHECK PROTECTION PROGRAM LOAN</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On May 4, 2020,
the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $95,161 (the &#8220;First PPP Loan&#8221;)
with Wells Fargo Bank, N.A (&#8220;Wells Fargo&#8221;). The First PPP Loan was made under, and is subject to, the terms and conditions
of the Paycheck Protection Program (the &#8220;PPP&#8221;), which was established as part of the Coronavirus Aid, Relief and Economic
Security Act the (&#8220;CARES Act&#8221;) and is administered by the U.S. Small Business Administration (the &#8220;SBA&#8221;). The
PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying
business. The term of the First PPP Loan was two years, with a maturity date of May 6, 2022 and it contains a favorable fixed annual interest
rate of 1.00%. Payments of principal and interest on the First PPP Loan were deferred until the date on which the amount of the forgiveness
determined under the PPP Program Requirements was remitted to Wells Fargo and then would continue monthly until the maturity of the First
PPP Loan. If the we failed to apply for forgiveness within 10 months after the last day of the Covered Period, as defined in the PPP Program
Requirements, monthly principal and interest payments would commence 10 months from the last day of the Covered Period. Payments of principal
and interest must be made on such date as designated by Wells Fargo in the months that they are due. Thereafter, principal and interest
would be payable monthly and may be prepaid at any time prior to maturity with no prepayment penalties.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">In
January 2021, the Company entered into a second Paycheck Protection Promissory Note in the original principal amount of $<span id="xdx_903_eus-gaap--DebtInstrumentFaceAmount_c20210121__us-gaap--LongtermDebtTypeAxis__custom--PaycheckProtectionPromissoryNoteMember_pp0p0" title="Principal amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-01-21_custom_PaycheckProtectionPromissoryNoteMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">117,487</ix:nonFraction></span>
(the&#160;&#8220;Second PPP Loan&#8221;) with Wells Fargo. The Second PPP Loan
was made under, and is subject to, the terms and conditions of the PPP. The current term of the Second PPP Loan is five years, with a
maturity date of January 2026 and it contains a favorable fixed annual interest rate  of <span id="xdx_902_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20210101__20210121__us-gaap--LongtermDebtTypeAxis__custom--PaycheckProtectionPromissoryNoteMember_zMTo5XPFEME1" title="Interest rate"><ix:nonFraction name="us-gaap:DebtInstrumentInterestRateDuringPeriod" contextRef="From2021-01-012021-01-21_custom_PaycheckProtectionPromissoryNoteMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1.00</ix:nonFraction></span>%.
Payments of principal and interest on the Second PPP Loan were deferred for
the first six months of its term, or July 2021. Thereafter, principal and interest are payable monthly and may be prepaid by us at any
time prior to maturity with no prepayment penalties.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

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<ix:exclude><p id="xdx_23A_zaYEPJ8enAW7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23D_zHkszwVgDzcb" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_232_zowhuuVrpoj3" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_230_zTe4id0pnSWb" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">Under the
terms of the CARES Act, recipients can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such
forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth
in the PPP, including, but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, &#8220;Qualifying Expenses&#8221;),
and on the maintenance of employee and compensation levels during a certain time period following the funding of the First PPP Loan and
the Second PPP Loan. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the
eight-week period. The Company has used the proceeds of each of the PPP Loan and the Second PPP Loan for salaries and wages, building
lease expense, and utilities. On April 27, 2021, the First PPP Loan was forgiven for the full amount. No assurance is provided that the
Company will be able to obtain forgiveness of the Second PPP Loan in whole or in part.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">In
May 2020, the Company also received an advance in the amount of $<span id="xdx_903_eus-gaap--ProceedsFromLoans_c20200501__20200531__us-gaap--LongtermDebtTypeAxis__custom--USSmallBusinessAdministrationMember_pp0p0" title="Proceeds from loan"><ix:nonFraction name="us-gaap:ProceedsFromLoans" contextRef="From2020-05-012020-05-31_custom_USSmallBusinessAdministrationMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,000</ix:nonFraction></span> as part of the Economic Injury Disaster Loan program offered by the SBA.
This advance was received after the Company filed its application for the First PPP Loan. The advance was not included in any of the documentation
related to the First PPP Loan; however, this advance was included as part of the First PPP Loan forgiveness.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p id="xdx_80E_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_ztlwJkgTCBb4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 12 &#8211; <span id="xdx_82E_zqRke49dbPKe">EQUITY TRANSACTIONS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><i>Preferred
Stock</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company&#8217;s issued and outstanding preferred stock, par value $<span id="xdx_90E_eus-gaap--PreferredStockParOrStatedValuePerShare_c20210930_pdd" title="Preferred stock, shares par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.00001</ix:nonFraction></span> per share, at September 30, 2021 and December 31, 2020 was
<span id="xdx_90A_eus-gaap--PreferredStockSharesOutstanding_c20201231_pdd" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">988,140</ix:nonFraction></span>, respectively. The Board, without further stockholder approval, may issue preferred stock in one or more series from time
to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions
of the shares of each series.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><b>Series
A Preferred Stock</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company had authorized 4,000,000 shares of Series A Preferred Stock, par value of $0<span id="xdx_901_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_znG4tzeCqVka" title="Preferred Stock, par value"><span id="xdx_90A_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zCC4n7KkH2J6" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> per share (the &#8220;Series A Preferred
Stock&#8221;), of which no shares were authorized, issued or outstanding at September 30, 2021 and December 31, 2020 and 4,000,000
shares were authorized, issued and outstanding at September 30, 2021 and December 31, 2020. Each share of Series A Preferred Stock,
when outstanding, could have been converted into one share of  Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><b>Series
B Preferred Stock</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company has <span id="xdx_907_eus-gaap--PreferredStockSharesAuthorized_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zrZAzEk2RZb9" title="Preferred stock, shares authorized"><span id="xdx_908_eus-gaap--PreferredStockSharesAuthorized_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_z0dxvGoEAMa6" title="Preferred stock, shares authorized"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,200,000</ix:nonFraction></ix:nonFraction></span></span>
shares of Series B Preferred Stock, par value of $0<span id="xdx_902_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zgFNdpYdMGMa" title="Preferred Stock, par value"><span id="xdx_908_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zjDMWKA1RIAg" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesCPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span>
per share (the &#8220;Series B Preferred Stock&#8221;) authorized, of of which <span id="xdx_905_eus-gaap--PreferredStockSharesIssued_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zYJdnB4hKkpb" title="Preferred stock, shares issued"><span id="xdx_908_eus-gaap--PreferredStockSharesOutstanding_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zLjGzJv1ceUk" title="Preferred stock, shares outstanding"><span id="xdx_906_eus-gaap--PreferredStockSharesIssued_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_zgx2u2W85rFh" title="Preferred stock, shares issued"><span id="xdx_90A_eus-gaap--PreferredStockSharesOutstanding_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesBPreferredStockMember_ziislBq9Bvgg" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesBPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">488,000</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span>
were issued and outstanding at September 30, 2021 and December 31, 2020, respectively. Each share of Series B Preferred Stock may be
converted into one share of the Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

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<ix:exclude><p id="xdx_235_zZ06S2bXtXd1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_234_zAfamLXiIQO8" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_zsQ5DkJByXOj" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23C_zv3lBH2EOqY9" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23D_zhYx8oEvsl1h" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><b>Series
C Preferred Stock</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
July 8, 2020, the Company reduced the authorized number of Series C Preferred Stock from 3,300,000 to <span id="xdx_903_eus-gaap--PreferredStockSharesAuthorized_c20200708__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_pdd" title="Preferred stock, shares authorized"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-07-08_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">250</ix:nonFraction></span> shares, par value $<span id="xdx_90D_eus-gaap--PreferredStockParOrStatedValuePerShare_c20200708__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_pdd" title="Preferred stock, shares par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-07-08_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.00001</ix:nonFraction></span>
per share (the &#8220;Series C Preferred Stock&#8221;), by filing a Certificate
of Designation of the Preferences, Rights, and Limitations of the Series C Preferred Stock with the Secretary of State of the State of
Delaware. The Company also amended the terms of the Series C Preferred Stock, as a result of which the holders of shares of the Series
Preferred C Stock became entitled to 2,000,000 votes for every share of Series Preferred C Stock held. The holders of the Series Preferred
C Stock are not entitled to receive dividends. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary,
before any distribution or payment will be made to the holders of any stock ranking junior to the Series C Preferred Stock, the holders
of the Series C Preferred Stock will be entitled to be paid out of the Company&#8217;s assets an amount equal to $1.00 in the aggregate
for all issued and outstanding shares of the Series C Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations,
and the like with respect to such shares) (the &#8220;Preference Value&#8221;). After the payment of the full applicable Preference Value
of each share of the Series C Preferred Stock, our remaining assets legally available for distribution, if any, will be distributed ratably
to the holders of the Common Stock. The Series C Preferred Stock has conversion rights, whereby each share of the Series C Preferred Stock
automatically converts into one share of Common Stock on the one-year anniversary of the issuance date, which conversion has occurred.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">September
30, 2021 and December 31, 2020, the Company had authorized <span id="xdx_90C_eus-gaap--PreferredStockSharesAuthorized_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_z9loAdxHwh5a" title="Preferred stock, shares authorized"><span id="xdx_90A_eus-gaap--PreferredStockSharesAuthorized_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zvDL9NSXtoLi" title="Preferred stock, shares authorized"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">250</ix:nonFraction></ix:nonFraction></span></span>
shares, respectively, of Series C Preferred Stock of which <span id="xdx_906_eus-gaap--PreferredStockSharesIssued_iI_c20210331__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zRMRIA2FrSz7" title="Preferred stock, shares issued"><span id="xdx_903_eus-gaap--PreferredStockSharesOutstanding_iI_c20210630__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_zQpXJmVWQF2i" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-03-31_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-06-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">140</ix:nonFraction></ix:nonFraction></span></span>,
respectively, were issued and outstanding at June 30, 2021 and December 31, 2020, respectively. At such dates, each share of the
Series C Preferred Stock was convertible into one and <span id="xdx_90B_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesCPreferredStockMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-09-30_us-gaap_SeriesCPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,000</ix:nonFraction></span>
shares, respectively of the Common Stock. As of September 30, 2021, there are no shares of Series C Preferred Stock issued and outstanding.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><b>Series
D Preferred Stock</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company had authorized <span id="xdx_909_eus-gaap--PreferredStockSharesAuthorized_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zvNiNiLhsRRd" title="Preferred stock, shares authorized"><span id="xdx_908_eus-gaap--PreferredStockSharesAuthorized_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zl7VBFId8ay7" title="Preferred stock, shares authorized"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">500,000</ix:nonFraction></ix:nonFraction></span></span> shares of Series D Preferred Stock, par value of $0<span id="xdx_906_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zSmSilKB6Z77" title="Preferred Stock, par value"><span id="xdx_90E_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zeqF0i6gdmx3" title="Preferred Stock, par value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" decimals="INF" unitRef="USDPShares">.00001</ix:nonFraction></ix:nonFraction></span></span> per share (the &#8220;Series D Preferred
Stock&#8221;), of which <span id="xdx_90A_eus-gaap--PreferredStockSharesIssued_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zld4sQkx4zs4" title="Preferred stock, shares issued"><span id="xdx_90D_eus-gaap--PreferredStockSharesOutstanding_iI_c20210930__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zwyd2lmpD3Bi" title="Preferred stock, shares outstanding"><span id="xdx_900_eus-gaap--PreferredStockSharesIssued_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_zCgTYbeaDR5l" title="Preferred stock, shares issued"><span id="xdx_908_eus-gaap--PreferredStockSharesOutstanding_iI_c20201231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesDPreferredStockMember_z843uzttoYC7" title="Preferred stock, shares outstanding"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-09-30_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2020-12-31_us-gaap_SeriesDPreferredStockMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">500,000</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span> shares were issued and outstanding at September 30, 2021 and December 31, 2020, respectively. Each
share of the Series D Preferred Stock may be converted into 1,000 shares of Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><i>Common
Stock</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company had authorized <span id="xdx_904_eus-gaap--CommonStockSharesAuthorized_iI_c20210930_zUYnNqI7iGsh" title="Common stock, shares authorized"><span id="xdx_902_eus-gaap--CommonStockSharesAuthorized_iI_c20201231_zwYpJRHoKXfh" title="Common stock, shares authorized"><ix:nonFraction name="us-gaap:CommonStockSharesAuthorized" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesAuthorized" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,500,000,000</ix:nonFraction></ix:nonFraction></span></span> shares of the Common Stock, of which 883,068,249 shares were issued and outstanding at September
30, 2021 and <span id="xdx_901_eus-gaap--CommonStockSharesIssued_iI_c20201231_zdhMtdGehBU4" title="Common Stock, shares issued"><span id="xdx_900_eus-gaap--CommonStockSharesOutstanding_iI_c20201231_zla31WMTNgp2" title="Common Stock, shares outstanding"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">786,308,041</ix:nonFraction></ix:nonFraction></span></span> were issued and outstanding at December 31, 2020.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"><b>Equity
Transactions </b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
December 23, 2020, the Company issued an aggregate of <span id="xdx_90B_eus-gaap--ConversionOfStockSharesConverted1_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_zWipMPFvtYd5" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,255,438</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_903_eus-gaap--DebtConversionConvertedInstrumentAmount1_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Debt conversion, converted instrument, amount"><ix:nonFraction name="us-gaap:DebtConversionConvertedInstrumentAmount1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">100,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_909_eus-gaap--DebtConversionConvertedInstrumentAmount1_pp0p0_c20201201__20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_zlSi1UpxCmgb" title="Debt conversion, converted instrument, amount"><ix:nonFraction name="us-gaap:DebtConversionConvertedInstrumentAmount1" contextRef="From2020-12-012020-12-23_custom_SecuritiesPurchaseAgreementMember_custom_First2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,274</ix:nonFraction></span> of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $<span id="xdx_904_ecustom--FairMarketValueOfShare_c20201223__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-12-23_custom_SecuritiesPurchaseAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0170</ix:nonFraction></span>. The First 2020 Debenture was converted at the conversion price of $0.0136, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On January 12, 2021, the Company
issued an aggregate of <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210112__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-01-12_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,887,819</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_90A_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210112__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-12_custom_Third2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_90F_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210112__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-12_custom_Third2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,425</ix:nonFraction></span> of accrued
interest on, the Third 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0231. The
Third 2020 Debenture was converted at the conversion price of $<span id="xdx_90D_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210112__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-01-12_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0185</ix:nonFraction></span>, which was the lower of the 2020 Fixed Conversion Price and
the 2020 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
January 25, 2021, the Company issued an aggregate of <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210125__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-01-25_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,094,732</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_First2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal
of, and $1,118 of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The First 2020 Debenture was converted at the conversion price of $<span id="xdx_904_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210125__us-gaap--LongtermDebtTypeAxis__custom--First2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-01-25_custom_First2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0213</ix:nonFraction></span>, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<ix:exclude><p id="xdx_232_zYPCO3OSAZR1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 37; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<ix:exclude><p id="xdx_234_zDe57nvjnEt7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23F_znfJ3r7sf77i" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zLAZfYdMaiNl" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23B_zXhHVdHgTn91" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23A_zPWkXbPAqewl" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
January 25, 2021, the Company issued an aggregate of <span id="xdx_90C_eus-gaap--ConversionOfStockSharesConverted1_c20210101__20210125__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-01-012021-01-25_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">5,183,613</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_90F_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_Second2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">100,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_90C_eus-gaap--ConversionOfStockAmountConverted1_c20210101__20210125__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-01-012021-01-25_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">10,411</ix:nonFraction></span> of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The Second 2020 Debenture was converted at the conversion price of $<span id="xdx_90D_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210125__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-01-25_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0213</ix:nonFraction></span>, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">Pursuant
to the Agreement and Plan of Merger with S and S<span style="color: black">, </span>the Company issued 9,000,000 shares of its
common <span style="color: black">stock to the five </span>S and S<span style="color: black"> Legacy Shareholders as follows: 6,300,000
shares to K &amp; L Beverage; <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20210101__20210125__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--WilliamJStinemanMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2021-01-012021-01-25_custom_WilliamJStinemanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,980,000</ix:nonFraction></span> shares to William J. Stineman; <span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20210101__20210125__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--WilliamFStinemanMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2021-01-012021-01-25_custom_WilliamFStinemanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">360,000</ix:nonFraction></span> shares to William F. Stineman; <span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20210101__20210125__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GaryKramerMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2021-01-012021-01-25_custom_GaryKramerMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">270,000</ix:nonFraction></span> shares to
Gary Kramer; and <span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20210101__20210125__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StevenSirusMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2021-01-012021-01-25_custom_StevenSirusMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">90,000</ix:nonFraction></span> shares to Steven Sirus. T</span>he per-share fair market value of the common stock was $0.0301, based on
the closing price of the Company&#8217;s common stock, as reported by OTC Markets Group Inc. on February 5, 2021, the date on which
the Company filed its Current Report on Form 8-K disclosing the acquisition<span style="color: black">.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
February 19, 2021, the Company issued an aggregate of <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20210201__20210219__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-02-012021-02-19_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,252,634</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_90A_eus-gaap--ConversionOfStockAmountConverted1_c20210201__20210219__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-02-012021-02-19_custom_Second2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_902_eus-gaap--ConversionOfStockAmountConverted1_c20210201__20210219__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-02-012021-02-19_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">855</ix:nonFraction></span> of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0260. The Second 2020 Debenture was converted at the conversion price of $<span id="xdx_909_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210219__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-02-19_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0208</ix:nonFraction></span>, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
May 5, 2021, the Company issued an aggregate of <span id="xdx_90F_eus-gaap--ConversionOfStockSharesConverted1_c20210501__20210505__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pdd" title="Number of shares converted"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-05-012021-05-05_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">14,436,426</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_900_eus-gaap--ConversionOfStockAmountConverted1_c20210501__20210505__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-05-012021-05-05_custom_Third2020DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">300,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_904_eus-gaap--ConversionOfStockAmountConverted1_c20210501__20210505__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-05-012021-05-05_custom_Third2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,496</ix:nonFraction></span> of accrued interest on, the Third 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The Third 2020 Debenture was converted at the conversion price of $<span id="xdx_907_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210505__us-gaap--LongtermDebtTypeAxis__custom--Third2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-05-05_custom_Third2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0213</ix:nonFraction></span>, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
June 9, 2021, the Company issued an aggregate of <span id="xdx_90A_eus-gaap--SharesIssued_c20210609__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_pdd" title="Common stock shares issued"><ix:nonFraction name="us-gaap:SharesIssued" contextRef="AsOf2021-06-09_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">6,719,269</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_903_eus-gaap--ConversionOfStockAmountConverted1_c20210601__20210609__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-06-012021-06-09_custom_Second2021DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_909_eus-gaap--ConversionOfStockAmountConverted1_c20210601__20210609__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_pp0p0" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-06-012021-06-09_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,578</ix:nonFraction></span> of accrued interest on, the Second 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0237. The Second 2021 Debenture was converted at the conversion price of $<span id="xdx_90A_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20210609__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_pdd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-06-09_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.030</ix:nonFraction></span>, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
July 23, 2021, the Company issued an aggregate of <span id="xdx_901_eus-gaap--SharesIssued_iI_c20210723__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_z6DNkkgNJmDa" title="Common stock shares issued"><ix:nonFraction name="us-gaap:SharesIssued" contextRef="AsOf2021-07-23_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">9,616,095</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_90B_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20210701__20210723__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--FinancialInstrumentAxis__custom--PrincipalMember_zM9HlTVSrqT4" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-07-012021-07-23_custom_Second2021DebentureMember_custom_PrincipalMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal
of, and $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20210701__20210723__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember__us-gaap--FinancialInstrumentAxis__custom--AccruedInterestMember_zPunuE6qzQIk" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-07-012021-07-23_custom_Second2020DebentureMember_custom_AccruedInterestMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,858</ix:nonFraction></span> of accrued interest on, the Second 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0200. The Second 2021 Debenture was converted at the conversion price of $<span id="xdx_90F_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20210723__us-gaap--LongtermDebtTypeAxis__custom--Second2020DebentureMember_zkwG5UuFiQfd" title="Conversion price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-07-23_custom_Second2020DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0160</ix:nonFraction></span>, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">For
other equity issuances during the nine months ended September 30, 2021 and the year ended December 31, 2020, please see Note 13,
<i>Employees</i>, and Note 14, <i>Sponsorships.</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<ix:exclude><p id="xdx_231_z45D84uoKzS8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white"></p></ix:exclude>

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<ix:exclude><p id="xdx_238_znCIeh84dbbc" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23E_zYeqomBQTFoh" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_235_z1o3IYuWTDJj" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_233_zJqlS0nAPjTj" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_230_zoNBHtLcBYui" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:EmployeesTextBlock"><p id="xdx_809_ecustom--EmployeesTextBlock_z1QO4aaW4hg6" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 13 &#8211; <span id="xdx_820_z9NUlupgvcka">EMPLOYEES</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">On August 12, 2015, the Company
entered into an Employment Agreement with Robert Clark (the &#8220;Clark Employment Agreement&#8221;). On December 1, 2016, the
Company entered into an Amendment to Employment Agreement (the &#8220;Clark Amendment&#8221;; and, together with the Clark Employment
Agreement, the &#8220;Amended Clark Employment Agreement&#8221;). Pursuant to the terms of the Amendment Clark Employment Agreement,
the Company agreed to issue, among other securities, <span id="xdx_90F_eus-gaap--CommonStockSharesIssued_c20161202__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RobertClarkMember_pdd" title="Common stock, shares issued"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2016-12-02_custom_RobertClarkMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">200,000,000</ix:nonFraction></span> shares of the Common Stock. Immediately, Mr. Clark decided to
defer receipt of <span id="xdx_90E_ecustom--DeferReceiptShares_c20161201__20161202__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RobertClarkMember_pdd" title="Defer receipt, shares"><ix:nonFraction name="kgkg:DeferReceiptShares" contextRef="From2016-12-012016-12-02_custom_RobertClarkMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">80,000,000</ix:nonFraction></span> of such shares; thus leaving <span id="xdx_90D_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_c20161202__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RobertClarkMember_pdd" title="Shares reserve for issuance"><ix:nonFraction name="us-gaap:CommonStockCapitalSharesReservedForFutureIssuance" contextRef="AsOf2016-12-02_custom_RobertClarkMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">120,000,000</ix:nonFraction></span> shares of the Common Stock to be issued to him. Those 120,000,000
shares of the Common Stock were issued to Mr. Clark, as follows: (i) on October 28, 2015, the Company issued <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20151001__20151028__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2015-10-012015-10-28_custom_EmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">30,000,000</ix:nonFraction></span> of such
shares at the per-share fair market value of $<span id="xdx_908_ecustom--FairMarketValueOfShare_c20151028__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2015-10-28_custom_EmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.015</ix:nonFraction></span>, based on the closing price of the Common Stock as reported by the OTCM on
the date of issuance; (ii) on March 2, 2016, the Company issued <span id="xdx_909_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20160301__20160302__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2016-03-012016-03-02_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">40,000,000</ix:nonFraction></span> of such shares at the per-share fair market value of
$<span id="xdx_903_ecustom--FairMarketValueOfShare_c20160302__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2016-03-02_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0250</ix:nonFraction></span> based on the closing price of the Common Stock as reported by the OTCM on the date of issuance; and (iii) on Mary 16, 2016,
the Company issued <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20160501__20160516__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2016-05-012016-05-16_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction></span> of such shares at the per-share fair market value of $<span id="xdx_90A_ecustom--FairMarketValueOfShare_c20160516__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2016-05-16_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0036</ix:nonFraction></span> based on the closing price of the Common
Stock as reported by the OTCM on the date of issuance. The Company accrued <span id="xdx_90D_ecustom--AccruedUnissuedShares_c20161231__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Accrued unissued shares"><ix:nonFraction name="kgkg:AccruedUnissuedShares" contextRef="AsOf2016-12-31_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">80,000,000</ix:nonFraction></span> shares of the Common Stock on December 31,
2016 that were not issued. At the date of accrual, the per-share fair market value of the shares was $<span id="xdx_901_ecustom--FairMarketValueOfShare_c20161231__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2016-12-31_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0025</ix:nonFraction></span> based on the closing
price of the Common Stock as reported by the OTCM on the date of issuance. On April 19, 2018, <span id="xdx_902_ecustom--NumberOfCommonStockCancelled_c20160401__20160419__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Number of common stock cancelled"><ix:nonFraction name="kgkg:NumberOfCommonStockCancelled" contextRef="From2016-04-012016-04-19_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">40,000,000</ix:nonFraction></span> shares were cancelled
and returned to the Company for accrual valued at $<span id="xdx_902_ecustom--NumberOfCommonStockCancelledValue_c20160401__20160419__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pp0p0" title="Number of common stock cancelled, value"><ix:nonFraction name="kgkg:NumberOfCommonStockCancelledValue" contextRef="From2016-04-012016-04-19_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,000,000</ix:nonFraction></span> by Mr. Clark. On July 31, 2019, an additional <span id="xdx_90C_ecustom--NumberOfCommonStockCancelled_c20190701__20190731__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pdd" title="Number of common stock cancelled"><ix:nonFraction name="kgkg:NumberOfCommonStockCancelled" contextRef="From2019-07-012019-07-31_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction></span> shares were
cancelled and returned to the Company for accrual valued at $<span id="xdx_909_ecustom--NumberOfCommonStockCancelledValue_c20190701__20190731__us-gaap--TypeOfArrangementAxis__custom--ClarkEmploymentAgreementMember_pp0p0" title="Number of common stock cancelled, value"><ix:nonFraction name="kgkg:NumberOfCommonStockCancelledValue" contextRef="From2019-07-012019-07-31_custom_ClarkEmploymentAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">180,000</ix:nonFraction></span>. Accordingly, as of September 30, 2020, Mr. Clark was the
record and beneficial owner of <span id="xdx_901_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RobertClarkMember_pdd" title="Shares reserve for issuance"><ix:nonFraction name="us-gaap:CommonStockCapitalSharesReservedForFutureIssuance" contextRef="AsOf2020-12-31_custom_RobertClarkMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">17,100,000</ix:nonFraction></span> of shares of the Common Stock and, subject to the July 2020 issuance to Mr. Clark of
140 shares of Series C Preferred, the Company accrued and owed to Mr. Clark an aggregate of <span id="xdx_90F_eus-gaap--CommonStockSharesOutstanding_c20201231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RobertClarkMember_pdd" title="Common stock shares outstanding"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2020-12-31_custom_RobertClarkMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">170,000,000</ix:nonFraction></span> shares to be reissued to
him upon his request pursuant to the terms of the oral agreement with him.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company issued <span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20200101__20200127__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--LoriRadcliffeMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2020-01-012020-01-27_custom_LoriRadcliffeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">5,000,000</ix:nonFraction></span>
shares of Common Stock on January 27, 2020 to Lori Radcliffe pursuant to that certain Employment Agreement dated October 7, 2019,
by and between Ms. Radcliffe and the Company. At the date of issuance, the per-share fair market value of the shares was $<span id="xdx_90F_ecustom--FairMarketValueOfShare_c20200127__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--LoriRadcliffeMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-01-27_custom_LoriRadcliffeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0637</ix:nonFraction></span>
based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, for a total value of $<span id="xdx_908_eus-gaap--StockIssuedDuringPeriodValueNewIssues_c20200101__20200127__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--LoriRadcliffeMember_pp0p0" title="Value of stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodValueNewIssues" contextRef="From2020-01-012020-01-27_custom_LoriRadcliffeMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">318,500</ix:nonFraction></span>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
April 3, 2020, the Company issued <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20200401__20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PaulORenickMember_pdd" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2020-04-012020-04-03_custom_PaulORenickMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">5,000,000</ix:nonFraction></span> shares of the Common Stock to Paul O&#8217;Renick pursuant to an Employment Agreement
dated October 1, 2019 in exchange for compensation owed in the amount of $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueNewIssues_c20200401__20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PaulORenickMember_pp0p0" title="Value of stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodValueNewIssues" contextRef="From2020-04-012020-04-03_custom_PaulORenickMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">157,500</ix:nonFraction></span> for services provided. At the date of issuance,
the per-share fair market value was $<span id="xdx_902_ecustom--FairMarketValueOfShare_c20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PaulORenickMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-04-03_custom_PaulORenickMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0315</ix:nonFraction></span> based on the closing price of the Common Stock as reported by the OTCM on the date
of issuance.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company issued <span id="xdx_904_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20200701__20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--WilliamJStinemanMember_zdNjWPpPQmrl" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2020-07-012020-07-30_custom_WilliamJStinemanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">3,000,000</ix:nonFraction></span> shares of Common Stock on July 30, 2020 to William J Stineman pursuant to that certain Employment Agreement
dated December 15, 2020, by and between Mr. Stineman and the Company. At the date of issuance, the per-share fair market value
of the shares was $<span id="xdx_901_ecustom--FairMarketValueOfShare_iI_c20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--WilliamJStinemanMember_ztp1iaUUqb6" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-07-30_custom_WilliamJStinemanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.018</ix:nonFraction></span> based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, for a
total value of $<span id="xdx_901_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pp0p0_c20200701__20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--WilliamJStinemanMember_z9Og2lONCEU2" title="Value of stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodValueNewIssues" contextRef="From2020-07-012020-07-30_custom_WilliamJStinemanMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">54,000</ix:nonFraction></span>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">The
Company issued <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20200701__20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--JohnTorrenceMember_zKk1hpbYLv5g" title="Stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" contextRef="From2020-07-012020-07-30_custom_JohnTorrenceMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">100,000</ix:nonFraction></span> shares of Common Stock on July 30, 2020 to John Torrence pursuant to performance award by and between Mr.
Torrence and the Company. At the date of issuance, the per-share fair market value of the shares was $<span id="xdx_90D_ecustom--FairMarketValueOfShare_iI_c20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--JohnTorrenceMember_zfkXkrUbUeu" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-07-30_custom_JohnTorrenceMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.018</ix:nonFraction></span> based on the closing
price of the Common Stock as reported by the OTCM on the date of issuance, for a total value of $<span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pp0p0_c20200701__20200730__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--JohnTorrenceMember_zPnzTQ9a1FDb" title="Value of stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodValueNewIssues" contextRef="From2020-07-012020-07-30_custom_JohnTorrenceMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,800</ix:nonFraction></span>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:SponsorshipsTextBlock"><p id="xdx_80B_ecustom--SponsorshipsTextBlock_zhet3aoaJP1l" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 14 &#8211; <span id="xdx_82A_z3s4j3hZi7gh">SPONSORSHIPS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
May 1, 2019, the Company entered into a sponsorship agreement with Ryan Dodd, a professional waterski jumper (the &#8220;Dodd Agreement&#8221;),
whereby the Company agreed to pay monthly sponsorship fees of $<span id="xdx_90E_eus-gaap--SponsorFees_c20190501__20190523__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pp0p0" title="Sponsorship fees"><ix:nonFraction name="us-gaap:SponsorFees" contextRef="From2019-05-012019-05-23_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,250</ix:nonFraction></span> for one year. On May 23, 2019, the Company issued Mr. Dodd
<span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures_c20190501__20190523__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pdd" title="Number of restricted common stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures" contextRef="From2019-05-012019-05-23_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">262,500</ix:nonFraction></span> shares of Common Stock. At the date of issuance, the shares of Common Stock had a fair market value of $<span id="xdx_904_ecustom--FairMarketValueOfShare_c20190523__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2019-05-23_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.131</ix:nonFraction></span> per share
based on the closing price of the Common Stock on the date of issuance as reported by the OTCM, representing $<span id="xdx_904_eus-gaap--PaymentsForFees_c20190501__20190523__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pp0p0" title="Payment for sponsorship"><ix:nonFraction name="us-gaap:PaymentsForFees" contextRef="From2019-05-012019-05-23_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">34,388</ix:nonFraction></span> as payment
for the Company&#8217;s sponsorship. The Dodd Agreement was extended in January 2020 for an additional one-year term. On April
3, 2020, the Company issued <span id="xdx_90C_eus-gaap--StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures_c20200401__20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pdd" title="Number of restricted common stock issued"><ix:nonFraction name="us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures" contextRef="From2020-04-012020-04-03_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">85,000</ix:nonFraction></span> shares of the Common Stock to Ryan Dodd pursuant to the Dodd Agreement. At the date of issuance,
the per-share fair market value was $<span id="xdx_909_ecustom--FairMarketValueOfShare_c20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pdd" title="Fair market value of share"><ix:nonFraction name="kgkg:FairMarketValueOfShare" contextRef="AsOf2020-04-03_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0315</ix:nonFraction></span> based on the closing price of the Common Stock as reported by the OTCM on the date
of issuance, representing a payment of $<span id="xdx_90B_eus-gaap--PaymentsForFees_c20200401__20200403__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RyanDoddMember_pp0p0" title="Payment for sponsorship"><ix:nonFraction name="us-gaap:PaymentsForFees" contextRef="From2020-04-012020-04-03_custom_RyanDoddMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">2,578</ix:nonFraction></span> for sponsorship fees.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p id="xdx_804_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zfaxsy4QyoU3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 15 &#8211; <span id="xdx_82A_zUov5X6kmZfb">COMMITMENTS AND CONTINGENCIES</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Liabilities for loss contingencies
arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability
has been incurred and the amount of the assessment can be reasonably estimated. The following represents the Company&#8217;s commitments
and contingencies as of December 31, 2020:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_236_zxzhZMsSBpL3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

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<ix:exclude><p id="xdx_239_zCTFcdKiSyQf" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_234_zc2aE1DvTyOa" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zo6T1xnDQQf5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23F_zB6COvpq5Fe7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23E_zmGHQUDokOLa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Operating
Lease &#8211; The Company currently leases approximately 4,500 square feet of corporate office and warehouse space located at
746 North Drive, Suite A, Melbourne, Florida 32934. The lease is for a five-year term, and expires on May 31, 2023. The initial
monthly base rent was approximately $<span id="xdx_902_ecustom--BaseRent_c20200101__20200930__srt--StatementGeographicalAxis__stpr--FL_pp0p0" title="Base rent"><ix:nonFraction name="kgkg:BaseRent" contextRef="From2020-01-012020-09-30_stpr_FL" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,994</ix:nonFraction></span>, plus state taxes. The monthly base rent increases annually by three percent, beginning
on June 1, 2019 and each June 1st thereafter. During the lease year that commenced on June 1, 2020, the Company&#8217;s monthly
base rent will be $<span id="xdx_90F_ecustom--BaseRent_c20210101__20210930_pp0p0" title="Base rent"><ix:nonFraction name="kgkg:BaseRent" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">4,114</ix:nonFraction></span>. For the three and nine months ended September 30, 2021, the Company recognized operating lease expense
of $<span id="xdx_90B_eus-gaap--OperatingLeaseExpense_c20210101__20210930_pp0p0" title="Operating lease expense"><ix:nonFraction name="us-gaap:OperatingLeaseExpense" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">13,944</ix:nonFraction></span> and $<span id="xdx_90D_eus-gaap--OperatingLeaseExpense_c20210701__20210930_pp0p0" title="Operating lease expense"><ix:nonFraction name="us-gaap:OperatingLeaseExpense" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">36,643</ix:nonFraction></span>, respectively, which is included in in selling, general and administrative expenses in the accompanying
Consolidated Statements of Loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 60pt; text-indent: 0pt; text-align: justify">&#160;</p>
</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:LesseeOperatingLeasesTextBlock"><p id="xdx_809_eus-gaap--LesseeOperatingLeasesTextBlock_zSRaPK9eTIJ" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 16 &#8211; <span id="xdx_826_zTalyQRCE7mh">LEASE LIABILITIES</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company reported the following
operating lease liabilities &#160;as of September 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">A.</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Right-of-Use Operating Lease &#8211; On May 22, 2019, Kona Gold entered into a lease agreement for 30,000 square feet of office and warehouse space in Greer County, South Carolina. The agreement includes monthly payments of $<span id="xdx_908_eus-gaap--OperatingLeaseExpense_pp0p0_c20190501__20190522__us-gaap--TransactionTypeAxis__custom--LeaseAgreementMember_z1zSRSuKNi3k" title="Operating lease expenses"><ix:nonFraction name="us-gaap:OperatingLeaseExpense" contextRef="From2019-05-012019-05-22_custom_LeaseAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">13,100</ix:nonFraction></span>, and included a $<span id="xdx_90A_eus-gaap--LeaseDepositLiability_iI_pp0p0_c20190522__us-gaap--TransactionTypeAxis__custom--LeaseAgreementMember_zd02XWPZLyg7" title="Deposits"><ix:nonFraction name="us-gaap:LeaseDepositLiability" contextRef="AsOf2019-05-22_custom_LeaseAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">6,500</ix:nonFraction></span> deposit. For the three and nine months ended September 30, 2021, the Company recognized right-of-use operating lease expense of $<span id="xdx_909_eus-gaap--OperatingLeaseRightOfUseAssetAmortizationExpense_pp0p0_c20210701__20210930__us-gaap--TransactionTypeAxis__custom--LeaseAgreementMember_z2o24hswwPue" title="Right-of-use operating lease expense"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" contextRef="From2021-07-012021-09-30_custom_LeaseAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">40,287</ix:nonFraction></span> and $<span id="xdx_90A_eus-gaap--OperatingLeaseRightOfUseAssetAmortizationExpense_pp0p0_c20210101__20210930__us-gaap--TransactionTypeAxis__custom--LeaseAgreementMember_zizriB76FzU9"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" contextRef="From2021-01-012021-09-30_custom_LeaseAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">107,432</ix:nonFraction></span>, respectively, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">B.</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On March 17, 2020, Kona entered into a lease agreement for equipment. The agreement includes monthly payments of $<span id="xdx_90B_eus-gaap--OperatingLeaseExpense_pp0p0_c20200301__20200317__us-gaap--TransactionTypeAxis__custom--LeaseAgreement1Member_zLTbQK9ZFBe7" title="Operating lease expenses"><ix:nonFraction name="us-gaap:OperatingLeaseExpense" contextRef="From2020-03-012020-03-17_custom_LeaseAgreement1Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">676</ix:nonFraction></span>. For the three and nine months ended September 30, 2021, the Company recognized right-of-use operating lease expense of $<span id="xdx_906_eus-gaap--OperatingLeaseRightOfUseAssetAmortizationExpense_pp0p0_c20210701__20210930__us-gaap--TransactionTypeAxis__custom--LeaseAgreement1Member_zsjlKMJfhNk1"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" contextRef="From2021-07-012021-09-30_custom_LeaseAgreement1Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,880</ix:nonFraction></span> and $<span id="xdx_908_eus-gaap--OperatingLeaseRightOfUseAssetAmortizationExpense_pp0p0_c20210101__20210930__us-gaap--TransactionTypeAxis__custom--LeaseAgreement1Member_zjZjWisJevJj"><ix:nonFraction name="us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense" contextRef="From2021-01-012021-09-30_custom_LeaseAgreement1Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">5,605</ix:nonFraction></span>, respectively, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss.</span></td></tr>
<tr style="vertical-align: top">
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: justify; line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: top">
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">C.</span></td>
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</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Amounts recognized as right-of-use
assets, net related to operating leases are included in noncurrent assets in the accompanying Consolidated Balance Sheet, while
related lease liabilities are included in current portion of long-term debt and long-term debt. At September 30, 2021 and December
31, 2020, the right-of-use asset and lease liability related to the operating leases were as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:ScheduleOfRightofuseAssetAndLeaseLiabilityRelatedToOperatingLeasesTableTextBloc"><table cellpadding="0" cellspacing="0" id="xdx_884_ecustom--ScheduleOfRightofuseAssetAndLeaseLiabilityRelatedToOperatingLeasesTableTextBloc_zZK0OWCBHbok" summary="xdx: Disclosure - LEASE LIABILITIES (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span id="xdx_8B8_zXdHYvWqvlh" style="display: none">Schedule of right-of-use asset and lease liability related to operating leases</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_491_20210930_zyVrIO0XeE4b" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_494_20201231_zhd7JstN0qcb" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2020</td></tr>
<tr id="xdx_406_ecustom--OperatingLeaseRightOfUseAssetGross_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%">Right-of-use asset</td><td style="width: 8%">&#160;</td>
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<tr id="xdx_404_ecustom--AmortizationOfRightofuseAsset_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr id="xdx_404_eus-gaap--OperatingLeaseLiabilitiesPaymentsDueAbstract_iB" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Operating lease liability</td><td>&#160;</td>
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<tr id="xdx_400_eus-gaap--OperatingLeaseLiabilityCurrent_i01I_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_404_eus-gaap--OperatingLeaseLiabilityNoncurrent_i01I_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Long-term lease</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_40B_eus-gaap--OperatingLeaseLiability_i01I_pp0p0" style="vertical-align: bottom; background-color: White">
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</table></ix:nonNumeric>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_23A_zdvdwGONSxM8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 40; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence -->&#160;</p></div>
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_231_zmmwHO9G8Vke" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23E_zaNiK9pGxDif" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23E_zuOycHm0dFmd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zO79yuCuUtXc" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_231_zhwvjmjJVm4f" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">The future payments due under
operating leases is as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:LesseeOperatingLeaseLiabilityMaturityTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_888_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_z26TYbXtwGb" summary="xdx: Disclosure - LEASE LIABILITIES (Details 1)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: left">Fiscal year ending:</td><td>&#160;</td>
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<tr id="xdx_40E_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueCurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40A_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInTwoYears_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40F_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInThreeYears_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_402_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFourYears_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_407_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueInFiveYears_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt">December 31, 2025</td><td>&#160;</td>
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<tr id="xdx_40E_eus-gaap--OperatingLeasesFutureMinimumPaymentsDueThereafter_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left">2026 and thereafter</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_401_eus-gaap--OperatingLeasesFutureMinimumPaymentsDue_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;&#160;Operating Leases, Future Minimum Payments Due</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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</table></ix:nonNumeric>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 54pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:RevenueTextBlock"><p id="xdx_809_ecustom--RevenueTextBlock_zSOwIAlWWGm4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE 17 &#8211; <span id="xdx_820_zrzXhZ2Ebiji">REVENUE</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company determined that
the majority of the Company&#8217;s revenue earned from its two reporting segments is recognized when it satisfies a single performance
obligation by transferring control of its products to a customer. The Company does not have a significant financing component or
payment terms, and the Company does not have any material unsatisfied performance obligations. The Company&#8217;s revenues are
obtained in similar geographical locations within the United States. The Company&#8217;s operating segments are expected to have
essentially the same future prospects, similar gross margins, sales trends, and the nature of our products and customers are essentially
the same. Furthermore, the Company regularly reviews disaggregated revenue by source for evaluating the financial performance of
its operations and making resource decisions. The Company&#8217;s revenue is broken down by the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 75px">&#160;</td>
    <td style="width: 24px; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Distributors &#8211; revenue derived from direct sales to distributors for resale of its products: Kona Gold hemp-infused energy drinks, HighDrate CBD-infused energy waters, Storm CBD-infused water, and Ooh La Lemin lemonade beverages.</span></td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Amazon Sales &#8211; revenue derived from customer purchases through Amazon.com of our Kona Gold hemp-infused energy drinks.</span></td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
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<tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Gold Leaf Distribution &#8211; revenue derived from Gold Leaf, which is the Company&#8217;s wholly-owned subsidiary, that focuses on the distribution of premium beverages and snacks in key markets. These markets include over 600 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. Gold Leaf&#8217;s product line includes alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company&#8217;s current product offerings.</span></td></tr>
<tr style="vertical-align: top">
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<tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Sales Returns and Allowances &#8211; the amount reduced from all revenue sources to allow for product returns.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">The following tables presents our net revenues,
by revenue source, and the period-over-period percentage change, for the period presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:ScheduleOfNetRevenuesByRevenueSourceTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_892_ecustom--ScheduleOfNetRevenuesByRevenueSourceTableTextBlock_zG6Uspm7duQ6" summary="xdx: Disclosure - REVENUE (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: left"><span id="xdx_8BF_znq9AyWUgEDk" style="display: none">Schedule of net revenues, by revenue source</span></td><td style="font-weight: bold">&#160;</td>
    <td colspan="7" style="font-weight: bold; text-align: center">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="3" style="font-weight: bold; text-align: center">2021</td><td>&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">Revenue Source</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% Change</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 46%">Distributors</td><td style="width: 5%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--Revenues_c20200701__20200930__srt--ProductOrServiceAxis__custom--DistributorsMember_pp0p0" title="Net Revenues" style="width: 11%; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30_custom_DistributorsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">140,003</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 5%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--Revenues_c20210101__20210930__srt--ProductOrServiceAxis__custom--DistributorsMember_pp0p0" title="Net Revenues" style="width: 11%; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-012021-09-30_custom_DistributorsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">784,023</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 5%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Online Sales</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Gold Leaf Distribution</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_986_eus-gaap--Revenues_c20200101__20200930__srt--ProductOrServiceAxis__custom--GoldLeafDistributionMember_pp0p0" title="Net Revenues" style="text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30_custom_GoldLeafDistributionMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">228,881</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Shipping</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_982_eus-gaap--Revenues_c20200101__20200930__srt--ProductOrServiceAxis__custom--ShippingMember_pp0p0" title="Net Revenues" style="text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30_custom_ShippingMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">19,181</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 2.5pt">Sales Returns and Allowances</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td id="xdx_985_eus-gaap--Revenues_c20210101__20210930__srt--ProductOrServiceAxis__custom--SalesReturnsAndAllowanceMember_pp0p0" title="Net Revenues" style="border-bottom: Black 2.5pt double; text-align: right">(<ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-012021-09-30_custom_SalesReturnsAndAllowanceMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">61,041</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</ix:nonNumeric><p id="xdx_8A0_z3il7MNPyDbh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following tables presents
our net revenues, by revenue source, as a percentage of total net revenues for the periods presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="kgkg:ScheduleOfNetRevenuesByRevenueSourceAsPercentageTableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_897_ecustom--ScheduleOfNetRevenuesByRevenueSourceAsPercentageTableTextBlock_zYJRmNJkwKwe" summary="xdx: Disclosure - REVENUE (Details 1)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
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    <td colspan="7" style="font-weight: bold; text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">Revenues</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_90C_ecustom--RevenuePercentage_dp_c20200701__20200930__srt--ProductOrServiceAxis__custom--OnlineSalesMember_zbTMkfNDQm5h" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-07-012020-09-30_custom_OnlineSalesMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">5</ix:nonFraction></span></td><td style="text-align: left">%</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Shipping</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_90C_ecustom--RevenuePercentage_dp_c20210701__20210930__srt--ProductOrServiceAxis__custom--ShippingMember_zTdSDAG48Dec" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2021-07-012021-09-30_custom_ShippingMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1</ix:nonFraction></span></td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Sales Returns, and Allowances</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<span id="xdx_90B_ecustom--RevenuePercentage_dp_c20210701__20210930__srt--ProductOrServiceAxis__custom--SalesReturnsAndAllowanceMember_zuNdfw8KaxDe" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2021-07-012021-09-30_custom_SalesReturnsAndAllowanceMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3</ix:nonFraction></span></td><td style="text-align: left">)%</td></tr>
</table>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="7" style="font-weight: bold; text-align: center">Nine Months Ended September 30,</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">Revenues</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right"><span id="xdx_908_ecustom--RevenuePercentage_dp_c20200101__20200930__srt--ProductOrServiceAxis__custom--DistributorsMember_zuNXaM4cnSe1" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-01-012020-09-30_custom_DistributorsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">50</ix:nonFraction></span></td><td style="width: 1%; text-align: left">%</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right"><span id="xdx_908_ecustom--RevenuePercentage_dp_c20210101__20210930__srt--ProductOrServiceAxis__custom--DistributorsMember_zsHNxc5uYms9" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2021-01-012021-09-30_custom_DistributorsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">44</ix:nonFraction></span></td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td>Amazon</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_909_ecustom--RevenuePercentage_dp_c20210101__20210930__srt--ProductOrServiceAxis__custom--AmazonMember_zHkkrtdH5xPg" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2021-01-012021-09-30_custom_AmazonMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">7</ix:nonFraction></span></td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Online Sales</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_904_ecustom--RevenuePercentage_dp_c20200101__20200930__srt--ProductOrServiceAxis__custom--OnlineSalesMember_zlRHualmY1pi" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-01-012020-09-30_custom_OnlineSalesMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">5</ix:nonFraction></span></td><td style="text-align: left">%</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Gold Leaf Distribution</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_90E_ecustom--RevenuePercentage_c20200101__20200930__srt--ProductOrServiceAxis__custom--GoldLeafDistributionMember_pdd" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-01-012020-09-30_custom_GoldLeafDistributionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Pure">31</ix:nonFraction></span></td><td style="text-align: left">%</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Shipping</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_909_ecustom--RevenuePercentage_dp_c20200101__20200930__srt--ProductOrServiceAxis__custom--ShippingMember_z8O6bSyYAQd1" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-01-012020-09-30_custom_ShippingMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3</ix:nonFraction></span></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span id="xdx_90C_ecustom--RevenuePercentage_dp_c20210101__20210930__srt--ProductOrServiceAxis__custom--ShippingMember_zufD3JQi3g9i" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2021-01-012021-09-30_custom_ShippingMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1</ix:nonFraction></span></td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Sales Returns, and Allowances</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<span id="xdx_906_ecustom--RevenuePercentage_dp_c20200101__20200930__srt--ProductOrServiceAxis__custom--SalesReturnsAndAllowanceMember_zYrCwT81LqM1" title="Revenue, percentage"><ix:nonFraction name="kgkg:RevenuePercentage" contextRef="From2020-01-012020-09-30_custom_SalesReturnsAndAllowanceMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">4</ix:nonFraction></span></td><td style="text-align: left">)%</td><td>&#160;</td>
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</table>

</ix:nonNumeric><p id="xdx_8AE_zknziQwCcHj1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_238_z23b5Zm9dt3j" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 41; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_236_z7SK3Yv3URh" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23D_zWZZ16tX6079" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_233_z25ZHFe5QTpk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_238_ziwMyNXJfogd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_232_z0YcZfyEk6af" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:SegmentReportingDisclosureTextBlock"><p id="xdx_80C_eus-gaap--SegmentReportingDisclosureTextBlock_z1VnH4IQb1Pc" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 18 &#8211; <span id="xdx_825_zFF4KNZrI3n5">SEGMENTS</span> </b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company has two reportable
segments:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 72px">&#160;</td>
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    <td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font-size: 10pt"><i>Beverages.<span style="color: black">&#160;</span></i><span style="color: black">Includes four types of beverage products: (i) hemp-infused energy drinks, (ii) CBD-infused energy water, (iii) CBD-infused high-alkaline water, and (iv) lemonade beverages, as well as apparel with the Kona Gold logo. The Beverages Segment includes all of Kona&#8217;s and HighDrate&#8217;s operations. The Company considers this a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying </span><span style="color: #1F3864">C</span><span style="color: black">onsolidated </span><span style="color: #1F3864">F</span><span style="color: black">inancial </span><span style="color: #1F3864">S</span><span style="color: black">tatements present financial information in a format that is consistent with the internal financial information used by management. We do not accumulate revenues by product classification and, therefore, it is impractical to present such information.</span></span></td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
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    <td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><i>Distribution. </i>Includes the distribution of premium beverages and snacks in key markets. These markets include over 900 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. In addition to distributing the Company&#8217;s own beverage products, the Company also distributes other products, including alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company&#8217;s current product offerings. The Distribution Segment includes all of Gold Leaf&#8217;s operations.</span></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">Amounts that do not relate
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following tables present
information about our reportable segments.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p>

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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Total Non-Current Assets</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">CURRENT LIABILITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left">Beverages Segment</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_98D_ecustom--LiabilityCurrent_c20210930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Current liabilities" style="text-align: right"><ix:nonFraction name="kgkg:LiabilityCurrent" contextRef="AsOf2021-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,899,473</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_98B_ecustom--LiabilityCurrent_c20201231__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Current liabilities" style="text-align: right"><ix:nonFraction name="kgkg:LiabilityCurrent" contextRef="AsOf2020-12-31_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,879,305</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left">Distribution Segment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_983_ecustom--LiabilityCurrent_c20210930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Current liabilities" style="text-align: right"><ix:nonFraction name="kgkg:LiabilityCurrent" contextRef="AsOf2021-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">144,926</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_988_ecustom--LiabilityCurrent_c20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Current liabilities" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:LiabilityCurrent" contextRef="AsOf2021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,796,611</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td id="xdx_983_ecustom--LiabilityCurrent_c20201231__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Current liabilities" style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="kgkg:LiabilityCurrent" contextRef="AsOf2020-12-31_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,424,367</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Total Current Liabilities</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><!-- Field: Page; Sequence: 42; Value: 1 -->
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<ix:exclude><p id="xdx_23A_zLug1WMIfSR" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_236_za7HSxEmSGW1" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_23B_z3jD5VmAHtcd" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_239_zMUY11QdRJD5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_233_zvbT45yYRWD7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

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<tr style="vertical-align: bottom">
    <td style="text-align: justify; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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<span style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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<span style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></span></td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom">
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    <td style="line-height: 107%">&#160;</td>
    <td colspan="2" style="text-align: center; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td colspan="2" style="text-align: center; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td colspan="2" style="text-align: center; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td colspan="2" style="text-align: center; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_983_eus-gaap--Revenues_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="width: 9%; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">245,918</ix:nonFraction></span></td>
    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_985_eus-gaap--Revenues_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="width: 9%; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-07-012021-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">207,763</ix:nonFraction></span></td>
    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 4%; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
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    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%">&#160;</td>
    <td style="width: 1%; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_98F_eus-gaap--Revenues_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="width: 8%; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-012021-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,018,041</ix:nonFraction></span></td>
    <td style="width: 1%; line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-left: 7.95pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Distribution Segment</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_987_eus-gaap--Revenues_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">108,719</ix:nonFraction></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_989_eus-gaap--Revenues_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-07-012021-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">374,247</ix:nonFraction></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_981_eus-gaap--Revenues_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">228,881</ix:nonFraction></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_983_eus-gaap--Revenues_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-012021-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">883,825</ix:nonFraction></span></td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 7.95pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Corporate and Eliminations</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td id="xdx_983_eus-gaap--Revenues_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="border-bottom: black 1pt solid; padding-left: 7.95pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">41,928</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td id="xdx_985_eus-gaap--Revenues_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="border-bottom: black 1pt solid; padding-left: 7.95pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-07-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">36,635</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td id="xdx_98C_eus-gaap--Revenues_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="border-bottom: black 1pt solid; padding-left: 7.95pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">100,085</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; line-height: 107%">&#160;</td>
    <td id="xdx_98E_eus-gaap--Revenues_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Revenues, net of sales, returns, and allowances:" style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">102,867</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr style="vertical-align: bottom; background-color: white">
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_98C_eus-gaap--Revenues_pp0p0_c20200701__20200930_zn2LUChvtxhh" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">312,709</ix:nonFraction></b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_985_eus-gaap--Revenues_pp0p0_c20210701__20210930_zfeUVLp3COah" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">545,375</ix:nonFraction></b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_98F_eus-gaap--Revenues_pp0p0_c20200101__20200930_ze6xGZsae5e5" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b><ix:nonFraction name="us-gaap:Revenues" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">741,812</ix:nonFraction></b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_984_eus-gaap--Revenues_pp0p0_c20210101__20210930_zbEWJ1tXYJol" title="Revenues, net of sales, returns, and allowances:" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b><ix:nonFraction name="us-gaap:Revenues" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,798,999</ix:nonFraction></b></span></td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>COST OF REVENUES:</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="text-align: right; line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
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<tr style="vertical-align: bottom">
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    <td style="background-color: #CCEEFF; line-height: 107%">&#160;</td>
    <td style="background-color: #CCEEFF; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; background-color: #CCEEFF; padding-left: 7.95pt; line-height: 107%">&#160;</td>
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    <td style="background-color: #CCEEFF; line-height: 107%">&#160;</td>
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    <td style="border-bottom: black 1pt solid; background-color: #CCEEFF; line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%">&#160;</td></tr>
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    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
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    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
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    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td id="xdx_981_eus-gaap--OtherNonoperatingIncomeExpense_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Other Income / (Expense)" style="border-bottom: black 1pt solid; padding-left: 7.95pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OtherNonoperatingIncomeExpense" contextRef="From2021-07-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,540,542</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td id="xdx_988_eus-gaap--OtherNonoperatingIncomeExpense_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Other Income / (Expense)" style="border-bottom: black 1pt solid; padding-left: 7.95pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OtherNonoperatingIncomeExpense" contextRef="From2020-01-012020-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">517,371</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 7.95pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; line-height: 107%">&#160;</td>
    <td id="xdx_98A_eus-gaap--OtherNonoperatingIncomeExpense_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Other Income / (Expense)" style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:OtherNonoperatingIncomeExpense" contextRef="From2021-01-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">2,825,835</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr style="vertical-align: bottom; background-color: white">
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
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    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td></tr>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td style="text-align: right; line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td></tr>
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    <td style="background-color: white; line-height: 107%">&#160;</td>
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    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; text-align: right; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; text-align: right; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; line-height: 107%">&#160;</td>
    <td style="background-color: white; text-align: right; line-height: 107%">&#160;</td>
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    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_989_eus-gaap--NetIncomeLoss_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-07-012020-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">273,514</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_98B_eus-gaap--NetIncomeLoss_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-07-012021-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">543,609</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_982_eus-gaap--NetIncomeLoss_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-01-012020-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,220,642</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">$</span></td>
    <td id="xdx_984_eus-gaap--NetIncomeLoss_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--BeveragesSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-012021-09-30_custom_BeveragesSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,167,251</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-left: 12.5pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Distribution Segment</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_98A_eus-gaap--NetIncomeLoss_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-07-012020-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">46,751</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_988_eus-gaap--NetIncomeLoss_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-07-012021-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">38,190</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_980_eus-gaap--NetIncomeLoss_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-01-012020-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">139,372</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%">&#160;</td>
    <td id="xdx_98E_eus-gaap--NetIncomeLoss_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--DistributionSegmentMember_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-012021-09-30_custom_DistributionSegmentMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">87,583</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 12.5pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">Corporate and Eliminations</span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td id="xdx_981_eus-gaap--NetIncomeLoss_c20200701__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Net Income (Loss)" style="border-bottom: black 1pt solid; padding-left: 12.5pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-07-012020-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">189,176</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td id="xdx_983_eus-gaap--NetIncomeLoss_c20210701__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Net Income (Loss)" style="border-bottom: black 1pt solid; padding-left: 12.5pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-07-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,648,916</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td id="xdx_98B_eus-gaap--NetIncomeLoss_c20200101__20200930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Net Income (Loss)" style="border-bottom: black 1pt solid; padding-left: 12.5pt; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-01-012020-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">811,278</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td>
    <td style="padding-left: 12.5pt; line-height: 107%">&#160;</td>
    <td style="border-bottom: black 1pt solid; line-height: 107%">&#160;</td>
    <td id="xdx_98D_eus-gaap--NetIncomeLoss_c20210101__20210930__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateSndEliminationsMember_pp0p0" title="Net Income (Loss)" style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-012021-09-30_custom_CorporateSndEliminationsMember" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">3,168,565</ix:nonFraction></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">)</span></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-left: 12.5pt; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>Total Net Loss</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_980_eus-gaap--NetIncomeLoss_pp0p0_c20200701__20200930_zkZ821fjXmR3" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-07-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">509,441</ix:nonFraction></b></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_98E_eus-gaap--NetIncomeLoss_c20210701__20210930_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">2,230,715</ix:nonFraction></b></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_986_eus-gaap--NetIncomeLoss_c20200101__20200930_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-01-012020-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">2,171,292</ix:nonFraction></b></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td>
    <td style="line-height: 107%">&#160;</td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>$</b></span></td>
    <td id="xdx_988_eus-gaap--NetIncomeLoss_c20210101__20210930_pp0p0" title="Net Income (Loss)" style="text-align: right; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">4,423,399</ix:nonFraction></b></span></td>
    <td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif"><b>)</b></span></td></tr>
</table>
</ix:nonNumeric><p id="xdx_8A7_zH83Q63fyct6" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><b>&#160;&#160;</b></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:AssetAcquisitionTextBlock"><p id="xdx_808_eus-gaap--AssetAcquisitionTextBlock_zF3TYOnIHbj9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>NOTE 19 &#8211;
<span id="xdx_82E_z7PmI0Yu6Sv8">ACQUISITION OF S AND S BEVERAGE, INC.</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">On
January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S<span style="color: black"> and its shareholders
and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger with the Wisconsin Department
of Financial Institutions (the &#8220;Merger Certificate&#8221;) on February 1, 2021. On January 22, 2021, (i) Kona Gold, (ii)
KGS Temporary Company, Inc. (Kona Gold Beverage, Inc. &#8220;Acquisition Subsidiary&#8221;), (iii) S and S, (iv) William J. Stineman
and K&amp;L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders), and (v) Mr. Stineman
(as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the &#8220;Merger Agreement&#8221;).
S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned subsidiary
of Kona Gold Beverage, Inc.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"><span style="color: black; background-color: white">Pursuant
to the Merger Agreement, and subject to the terms and conditions contained therein,&#160;</span><span style="color: black">we
acquired all of the shares of capital stock of S and S from the five S and S Legacy Shareholders. In consideration thereof, we
issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.&#8217;s common stock (the
&#8220;Acquisition Stock&#8221;) on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights in respect
of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the &#8220;Aggregate Acquisition
Payments&#8221;), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy
Shareholders) and approximately $<span id="xdx_90D_eus-gaap--AcquisitionCosts_pp0p0_c20210101__20210930_zJfahpea64K6" title="Acquisition Costs, Period Cost"><ix:nonFraction name="us-gaap:AcquisitionCosts" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">89,000</ix:nonFraction></span>
of which (the &#8220;Remaining Acquisition Payments&#8221;) is allocated to the five S and S Legacy Shareholders on a pro rata
basis. $<span id="xdx_906_eus-gaap--AcquisitionCosts_pp0p0_c20210301__20210310_zUUGntc6TTJi" title="Acquisition Costs, Period Cost"><ix:nonFraction name="us-gaap:AcquisitionCosts" contextRef="From2021-03-012021-03-10" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">400,000</ix:nonFraction></span>
of the Aggregate Acquisition Payments are scheduled to be paid in the next two weeks. The balance of the Aggregate Acquisition
Payments, including the Remaining Acquisition Payments, are scheduled to be paid in monthly installments, in arrears on the tenth
calendar day of each month, commencing on March 10, 2021, at a rate equivalent to $<span id="xdx_90F_eus-gaap--BusinessAcquisitionSharePrice_iI_c20210310_zxTu2vd0vJXf" title="Business Acquisition, Share Price"><ix:nonFraction name="us-gaap:BusinessAcquisitionSharePrice" contextRef="AsOf2021-03-10" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">2.00</ix:nonFraction></span>
per case of Lemin Superior Lemonade (the product line of S and S that we have now branded as Ooh La Lemin) that we sell until the Aggregate Acquisition Payments have been
paid in full. In addition to the Aggregate Acquisition Payments, we also assumed and agreed to pay certain other liabilities of S
and S as set forth in the Merger Agreement.</span></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following is a balance
sheet comparison of S and S as of January 21, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_238_zSUCi1vGGaC7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 43; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_236_zn7mHVQqDuV3" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_238_z51DROhH88l3" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_zlVQjaEpsLNh" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23A_zbrpiznRKDyc" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23F_zP62xxKZ5Xxi" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_896_eus-gaap--ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock_zDq9y6Pb9Pha" summary="xdx: Disclosure - ACQUISITION OF S AND S BEVERAGE, INC. (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="color: black; font-weight: bold"><span id="xdx_8B9_zSJRTrs7zTfb" style="display: none">Schedule of acquisition</span></td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" id="xdx_490_20210121_us-gaap--FairValueByFairValueHierarchyLevelAxis_us-gaap--FairValueInputsLevel2Member" style="text-align: center; color: black; font-weight: bold">&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" id="xdx_491_20210121_us-gaap--FairValueByFairValueHierarchyLevelAxis_us-gaap--FairValueInputsLevel1Member" style="text-align: center; color: black; font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="color: black; font-weight: bold">Balance Sheet</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" style="text-align: center; color: black; font-weight: bold">Book Value</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" style="text-align: center; color: black; font-weight: bold">Fair Value</td></tr>
<tr id="xdx_408_eus-gaap--AccountsAndOtherReceivablesNetCurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; width: 56%; text-align: left">Accounts receivable, net of allowance of $24,280</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right"><ix:nonFraction name="us-gaap:AccountsAndOtherReceivablesNetCurrent" contextRef="AsOf2021-01-21_us-gaap_FairValueInputsLevel2Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">9,437</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; color: black">&#160;</td>
    <td style="width: 1%; color: black; text-align: left">$</td><td style="width: 12%; color: black; text-align: right"><ix:nonFraction name="us-gaap:AccountsAndOtherReceivablesNetCurrent" contextRef="AsOf2021-01-21_us-gaap_FairValueInputsLevel1Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">33,717</ix:nonFraction></td><td style="width: 1%; color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_405_eus-gaap--InventoryNet_iI_pp0p0_zfEbeKtVQnXe" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt">Inventory</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2021-01-21_us-gaap_FairValueInputsLevel2Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">240,797</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="us-gaap:InventoryNet" contextRef="AsOf2021-01-21_us-gaap_FairValueInputsLevel1Member" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">249,648</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left">Property, plant and equipment, net (Website Development)</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr id="xdx_405_eus-gaap--AccountsPayableAndAccruedLiabilitiesCurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40A_ecustom--OutstandingChecks_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_404_eus-gaap--InterestPayableCurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_405_eus-gaap--ContractWithCustomerLiabilityCurrent_iI_pp0p0_zIEj4EfMENT5" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_40B_eus-gaap--NotesPayableRelatedPartiesClassifiedCurrent_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_40A_eus-gaap--CommonStockValue_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_408_eus-gaap--AdditionalPaidInCapital_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr id="xdx_402_eus-gaap--RetainedEarningsAccumulatedDeficit_iI_pp0p0" style="vertical-align: bottom; background-color: White">
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<tr id="xdx_405_eus-gaap--LiabilitiesAndStockholdersEquity_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">&#160;</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The following are the accounts
included in the Company&#8217;s accompanying balance sheet dated March 31, 2021 as a result of the S and S transaction:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="color: black; font-weight: bold">Balance Sheet</td><td>&#160;</td>
    <td colspan="3" id="xdx_494_20210930_zs5jDP3GhcY7" style="text-align: center">&#160;</td></tr>
<tr id="xdx_404_eus-gaap--BusinessCombinationAcquiredReceivablesFairValue_iI_pp0p0_z6OazmeQHBq2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%; color: black; text-align: left">Accounts receivable</td><td style="width: 10%; color: black">&#160;</td>
    <td style="width: 1%; color: black; text-align: left">$</td><td style="width: 18%; color: black; text-align: right"><ix:nonFraction name="us-gaap:BusinessCombinationAcquiredReceivablesFairValue" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">33,717</ix:nonFraction></td><td style="width: 1%; color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_403_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGWebsiteDevelopment_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="color: black; text-align: left">Website Development (Ooh La Lemin)</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationRecognizedIdentifiableAssetsAcquiredGWebsiteDevelopment" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">12,201</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40B_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black">Goodwill</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: black; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: black; text-align: right"><ix:nonFraction name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,275,938</ix:nonFraction></td><td style="padding-bottom: 1pt; color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40C_eus-gaap--BusinessCombinationContingentConsiderationAsset_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Total Assets</td><td style="color: black; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; color: black; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; color: black; text-align: right"><ix:nonFraction name="us-gaap:BusinessCombinationContingentConsiderationAsset" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,321,856</ix:nonFraction></td><td style="padding-bottom: 2.5pt; color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_405_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Accounts payable and accrued liabilities</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">$</td><td style="color: black; text-align: right"><ix:nonFraction name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">956</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_404_ecustom--BusinessCombinationLoanOnAcquisition_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Loan on Acquisition</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationLoanOnAcquisition" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">650,000</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_408_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAssumedDueToMergerPayments_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black; text-align: left">Due to merger payments</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAssumedDueToMergerPayments" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">400,000</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_403_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesCommonStockValue_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="color: black">Common stock, $.00001 par value, 9,000,000 shares issued</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesCommonStockValue" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">90</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40A_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAdditionalPaidinCapital_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Additional paid-in capital</td><td style="color: black; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: black; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAdditionalPaidinCapital" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">270,810.00</ix:nonFraction></td><td style="padding-bottom: 1pt; color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_406_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesLiabilitiesAndStockholdersDeficit_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 30pt; font-weight: bold; text-align: left">Total liabilities and stockholders&#8217; deficit</td><td style="color: black; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; color: black; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; color: black; text-align: right"><ix:nonFraction name="kgkg:BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesLiabilitiesAndStockholdersDeficit" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,321,856</ix:nonFraction></td><td style="padding-bottom: 2.5pt; color: black; text-align: left">&#160;</td></tr>
</table>


</ix:nonNumeric><p id="xdx_8A3_zJO3PR4bS8wb" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><!-- Field: Page; Sequence: 44; Value: 1 -->
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<ix:exclude><p id="xdx_230_zgUbLJ6sSVx8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23B_zivKmkbX49Dl" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_231_zFDvG2JGS992" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_23B_zYoBE28wPLE6" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_23D_zVKGEmfnVPxd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock"><p id="xdx_80D_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zqZlutzLXnF4" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 20 &#8211; <span id="xdx_82C_zKPEbFpmt8R">GOING CONCERN</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The accompanying Consolidated
Financial Statements 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. As reflected in the accompanying Consolidated Financial Statements,
during the three months ending September 30, 2021, the Company incurred a net loss of approximately $2.2 <span id="xdx_903_eus-gaap--NetIncomeLoss_iN_di_c20210701__20210930_zq1MJsd9yHTe" style="display: none"><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-07-012021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,230,715</ix:nonFraction> </span>million,
and during the nine months ending September 30, 2021, incurred a net loss of approximately $4.4 million <span id="xdx_907_eus-gaap--NetIncomeLoss_iN_di_c20210101__20210930_zszXbb33HbU3" style="display: none"><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">4,423,399</ix:nonFraction></span>,
used cash in operations of approximately $1.5 million <span id="xdx_900_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pp0p0_di_c20210101__20210930_zjuQPa85ALw5"><ix:nonFraction name="us-gaap:NetCashProvidedByUsedInOperatingActivities" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,586,677</ix:nonFraction></span>
and had a stockholders&#8217; deficit of $5,065,089 as
of September 30, 2021. In the year ending December 31, 2020, the Company incurred a net loss of $<span id="xdx_907_eus-gaap--NetIncomeLoss_iN_pp0p0_di_c20200101__20201231_zyHiMoXg5rI6" title="Net Loss"><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2020-01-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">3,125,595</ix:nonFraction></span>,
used cash in operations of $<span id="xdx_906_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pp0p0_di_c20200101__20201231_zpjMAJ5bTwxj" title="Net cash provided by (used in) operating activities"><ix:nonFraction name="us-gaap:NetCashProvidedByUsedInOperatingActivities" contextRef="From2020-01-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">1,370,123</ix:nonFraction> </span>and
had a stockholders&#8217; deficit of $<span id="xdx_905_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest_iNI_pp0p0_di_c20201231_zcBaBaLQtYz7"><ix:nonFraction name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">4,244,153</ix:nonFraction> </span>as
of December 31, 2020.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company attributes this
significant increase to losses incurred from corporate related expenses during the nine months ending September 30, 2021. During
the first and third quarters of fiscal 2021, the Company signed two separate Securities Purchase Agreement, whereas, the Company
incurred interest expense to related warrants on both convertible notes and a loss on the related derivatives, which were integral
to the growth of the Company. During the third quarter, the Company attributes the increase to costs related to both our Beverage
Segment and Distribution Segment of selling, general and administrative expenses, specifically salaries, which are integral to
the success of the Company. In addition, corporate-related expenses, specifically audit related and legal expenses related to securities
in the current year that are integral to the success of our Company. The Company continued to be impacted by the COVID-19 pandemic
during the third quarter of the 2021 fiscal year as the Company continued to have logistical delays in delivery of our products
to customers. In addition, the Company has experienced delays in obtaining product related to logistical delays. Despite the increase
in losses and impacts from COVID-19, the Company realized an increase in sales in the first three quarters of fiscal 2021 over
the previous first three quarters of fiscal 2020. The Company attributes this to the acquisition of S and S, which has added to
the Company&#8217;s portfolio. In addition, the Company has signed more favorable agreements with larger, reputable tier 1 and
mid-size distributors and grocery chains that had unforeseen delays and had been impacted by the COVID-19 pandemic. In addition,
we also attribute the increase in sales to our Distribution Segment which has seen approximately 286% increase in the first three
quarters of fiscal 2021 over the previous first three quarters of fiscal 2020; and approximately 244% increase in the three months
ending September 30, 2021 over the three months ending September 30, 2020. We expect that revenue will increase during the balance
of fiscal 2021 as distribution related to our current distributors that had been affected by COVID-19, but have resumed more normal
distribution, are seeing fewer forward-looking impacts from the COVID-19 pandemic. The Company expects that it will continue to
enter into additional, larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverage Segment
during the balance of fiscal 2021, and our Distribution Segment will continue to see growth with the expansion of a new location.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">As a result, the Company&#8217;s
continuation as a going concern is dependent on the ability to obtain additional financing until we can generate sufficient cash
flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our
operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the
amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result
in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans
would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts
and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to
scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their
investment. The accompanying Consolidated Financial Statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ConcentrationRiskDisclosureTextBlock"><p id="xdx_80C_eus-gaap--ConcentrationRiskDisclosureTextBlock_z64fuZpAazXa" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 21 &#8211; <span id="xdx_827_z4uJzndJYEPj">CONCENTRATIONS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company had certain customers
whose revenue individually represented 10% or more of the Company&#8217;s total revenue, less intercompany transactions. In addition,
certain customers had outstanding accounts receivables that individually represented 10% or more of the Company&#8217;s total outstanding
accounts receivables, less intercompany transactions, but before receivable allowances. These customers are as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_234_zBUMyEQvUSE8" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 45; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence -->&#160;</p></div>
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    <!-- Field: /Page --></ix:exclude>

<ix:exclude><p id="xdx_23C_zxHReJVNcxX1" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_23F_zh2q813YbAJi" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_237_z2ZRwGSOseY3" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_231_zvYv0MNHMhG5" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_231_z3qzv4SQIwn9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In the accompanying Consolidated
Balance Sheet as of September 30, 2021, the Company&#8217;s net accounts receivable were $<span id="xdx_90C_ecustom--NetAccountsReceivable_c20210930_pp0p0" title="Net accounts receivable"><ix:nonFraction name="kgkg:NetAccountsReceivable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">63,715</ix:nonFraction></span>, representing total accounts receivable
of approximately $<span id="xdx_90D_eus-gaap--AccountsReceivableGross_c20210930_pp0p0" title="Total Accounts Receivable"><ix:nonFraction name="us-gaap:AccountsReceivableGross" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">139,203</ix:nonFraction></span>, less sales returns and allowance of approximately $<span id="xdx_901_ecustom--SalesReturnAndAllowances_c20210101__20210930_pp0p0" title="Less: Sales Returns and Allowances"><ix:nonFraction name="kgkg:SalesReturnAndAllowances" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">61,041</ix:nonFraction></span>, less doubtful accounts of approximately $<span id="xdx_902_ecustom--AllowanceForDoubtfulAccountsReceivables_c20210930_pp0p0" title="Less: Doubtful Accounts"><ix:nonFraction name="kgkg:AllowanceForDoubtfulAccountsReceivables" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,709</ix:nonFraction></span>,
and less intercompany transactions of approximately $<span id="xdx_908_ecustom--IntercompanyTransactions_c20210930_pp0p0" title="Intercompany transactions"><ix:nonFraction name="kgkg:IntercompanyTransactions" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">6,738</ix:nonFraction></span>. In the accompanying Consolidated Balance Sheet as of December 31, 2020,
the Company&#8217;s net accounts receivable were $(<span id="xdx_90E_ecustom--AccountsReceivable_iNI_pp0p0_di_c20201231_zi1kjoffmUCl" title="Accounts receivable"><ix:nonFraction name="kgkg:AccountsReceivable" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">10,508</ix:nonFraction></span>), representing total accounts receivable of approximately $<span id="xdx_907_eus-gaap--AccountsReceivableGross_c20201231_pp0p0" title="Total Accounts Receivable"><ix:nonFraction name="us-gaap:AccountsReceivableGross" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">22,166</ix:nonFraction></span> less
sales returns and allowance of approximately $<span id="xdx_902_ecustom--SalesReturnsAndAllowances_c20200101__20201231_pp0p0" title="Less: Sales Returns and Allowances"><ix:nonFraction name="kgkg:SalesReturnsAndAllowances" contextRef="From2020-01-012020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">28,707</ix:nonFraction></span> and less doubtful accounts of approximately $<span id="xdx_908_ecustom--AllowanceForDoubtfulAccountsReceivables_c20201231_pp0p0" title="Less: Doubtful Accounts"><ix:nonFraction name="kgkg:AllowanceForDoubtfulAccountsReceivables" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,967</ix:nonFraction></span>. The breakdown of the Company&#8217;s
accounts receivable is as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock"><table cellpadding="0" cellspacing="0" id="xdx_882_eus-gaap--ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock_z4CdDgFnBHc8" summary="xdx: Disclosure - CONCENTRATIONS (Details)" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 85%; margin-right: auto">
<tr style="vertical-align: bottom">
    <td><span id="xdx_8BF_zVVd227rohKg" style="display: none">Schedule of accounts receivable</span></td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" id="xdx_49A_20210930_zumIESD3UGz5" style="color: black; font-weight: bold; text-align: center">&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" id="xdx_495_20201231_zmQVqvEMOm4a" style="color: black; font-weight: bold; text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td>&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" style="color: black; font-weight: bold; text-align: center">September 30, 2021</td><td style="color: black; font-weight: bold">&#160;</td>
    <td colspan="3" style="color: black; font-weight: bold; text-align: center">December 31, 2020</td></tr>
<tr id="xdx_406_ecustom--TotalAccountsReceivable_iI_pp0p0_zGQsfcjEFDFc" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; color: black; font-weight: bold; text-align: left">Total Accounts Receivable</td><td style="width: 8%; color: black; font-weight: bold">&#160;</td>
    <td style="width: 1%; color: black; font-weight: bold; text-align: left">$</td><td style="width: 12%; color: black; font-weight: bold; text-align: right"><ix:nonFraction name="kgkg:TotalAccountsReceivable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">139,235</ix:nonFraction></td><td style="width: 1%; color: black; font-weight: bold; text-align: left">&#160;</td><td style="width: 8%; color: black; font-weight: bold">&#160;</td>
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<tr id="xdx_40B_ecustom--SalesReturnAndAllowance_iI_pp0p0_zjduRNsTh3nj" style="vertical-align: bottom; background-color: White">
    <td style="color: black; text-align: left">Less: Sales Returns and Allowances</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:SalesReturnAndAllowance" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">61,041</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:SalesReturnAndAllowance" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">28,707</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40B_ecustom--AllowanceForDoubtfulAccountsReceivableNoncurrents_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black; text-align: left">Less: Doubtful Accounts</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:AllowanceForDoubtfulAccountsReceivableNoncurrents" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">7,709</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:AllowanceForDoubtfulAccountsReceivableNoncurrents" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">3,967</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40D_ecustom--LessIntercompanyTransactions_iI_pp0p0" style="vertical-align: bottom; background-color: White">
    <td style="color: black; text-align: left">Less: Intercompany Transactions</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><ix:nonFraction name="kgkg:LessIntercompanyTransactions" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">6,738</ix:nonFraction></td><td style="color: black; text-align: left">&#160;</td><td style="color: black">&#160;</td>
    <td style="color: black; text-align: left">&#160;</td><td style="color: black; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl2332">&#8212;</span>&#160;&#160;</td><td style="color: black; text-align: left">&#160;</td></tr>
<tr id="xdx_40B_ecustom--AccountsReceivable_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: black; font-weight: bold; text-align: left">Accounts Receivable, net</td><td style="color: black; font-weight: bold">&#160;</td>
    <td style="color: black; font-weight: bold; text-align: left">$</td><td style="color: black; font-weight: bold; text-align: right"><ix:nonFraction name="kgkg:AccountsReceivable" contextRef="AsOf2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">63,715</ix:nonFraction></td><td style="color: black; font-weight: bold; text-align: left">&#160;</td><td style="color: black; font-weight: bold">&#160;</td>
    <td style="color: black; font-weight: bold; text-align: left">$</td><td style="color: black; font-weight: bold; text-align: right">(<ix:nonFraction name="kgkg:AccountsReceivable" contextRef="AsOf2020-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" sign="-" unitRef="USD">10,508</ix:nonFraction></td><td style="color: black; font-weight: bold; text-align: left">)</td></tr>
</table></ix:nonNumeric>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company determined that
four customers accounted for approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zxXoUXfFYcW1" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2021-01-012021-09-30_us-gaap_AccountsReceivableMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">70</ix:nonFraction></span>% (or approximately <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--FirstCustomersMember_z1TYUFfYeoPe" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2021-01-012021-09-30_us-gaap_AccountsReceivableMember_custom_FirstCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">25</ix:nonFraction></span>%, <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--SecondCustomersMember_z7SLdFLSL575" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2021-01-012021-09-30_us-gaap_AccountsReceivableMember_custom_SecondCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">20</ix:nonFraction></span>%, <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--ThirdCustomersMember_zOFZmjxJd4Xe" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2021-01-012021-09-30_us-gaap_AccountsReceivableMember_custom_ThirdCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">13</ix:nonFraction></span>% and <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20210101__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--FourthCustomersMember_zzTQNBf3kDsh" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2021-01-012021-09-30_us-gaap_AccountsReceivableMember_custom_FourthCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">12</ix:nonFraction></span>%), or an aggregate of $<span id="xdx_909_ecustom--AccountsReceivable_c20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_pp0p0" title="Accounts receivable"><ix:nonFraction name="kgkg:AccountsReceivable" contextRef="AsOf2021-09-30_us-gaap_AccountsReceivableMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">97,832</ix:nonFraction></span>, of the outstanding
total accounts receivable of $139,235 as of September 30, 2021. The Company determined that four customers accounted for approximately
<span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zuvDnuuij1xd" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2020-01-012020-12-31_us-gaap_AccountsReceivableMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">76</ix:nonFraction></span>% (or approximately <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--FirstCustomersMember_zJe1aKSPawBl" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2020-01-012020-12-31_us-gaap_AccountsReceivableMember_custom_FirstCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">26</ix:nonFraction></span>%, <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--SecondCustomersMember_z1ch6TBgK89a" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2020-01-012020-12-31_us-gaap_AccountsReceivableMember_custom_SecondCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">22</ix:nonFraction></span>%, <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--ThirdCustomersMember_zXFgec9Kczr6" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2020-01-012020-12-31_us-gaap_AccountsReceivableMember_custom_ThirdCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">14</ix:nonFraction></span>% and <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_dp_c20200101__20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__srt--MajorCustomersAxis__custom--FourthCustomersMember_zG8LWxxbkjV7" title="Concentration Risk, Percentage"><ix:nonFraction name="us-gaap:ConcentrationRiskPercentage1" contextRef="From2020-01-012020-12-31_us-gaap_AccountsReceivableMember_custom_FourthCustomersMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">14</ix:nonFraction></span>%), or an aggregate of $16,904, of the outstanding total accounts receivable of $<span id="xdx_903_ecustom--AccountsReceivable_c20201231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_pp0p0" title="Accounts receivable"><ix:nonFraction name="kgkg:AccountsReceivable" contextRef="AsOf2020-12-31_us-gaap_AccountsReceivableMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">22,166</ix:nonFraction></span>
as of December 31, 2020.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">In the accompanying Consolidated
Statements of Loss for <span id="xdx_90B_ecustom--LoansAndLeasesReceivableDescriptions_c20210701__20210930" title="Concentrations, description"><ix:nonNumeric contextRef="From2021-07-012021-09-30" name="kgkg:LoansAndLeasesReceivableDescriptions">the three months ended September 30, 2021, one customer represented 12% of the Company&#8217;s total net
revenue of $545,375 for the three months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the
three months ended September 30, 2020, no one customer represented 10% of the Company&#8217;s total net revenue of $312,709 for
the three months ended September 30, 2020. In the accompanying Consolidated Statements of Loss for the nine months ended September
30, 2021, one customer represented 13% of the Company&#8217;s total net revenue of $1,798,999 for the nine months ended September
30, 2021. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2020, no one customer represented
10% or more of the Company&#8217;s total net revenue of $741,812 for the nine months ended September 30, 2020</ix:nonNumeric></span>.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<ix:exclude><p id="xdx_236_zAnxJ1XUaxJd" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify"></p></ix:exclude>

<ix:exclude><!-- Field: Page; Sequence: 46; Value: 1 -->
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<ix:exclude><p id="xdx_233_zn9GNbcyk3tg" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;&#160;</p></ix:exclude>

<ix:exclude><p id="xdx_230_zkd1j3nYIqa7" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>Kona Gold Beverage, Inc.</b></p></ix:exclude>

<ix:exclude><p id="xdx_234_zY5blWErNgA4" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>(formerly known as Kona Gold Solutions, Inc.)</b></p></ix:exclude>

<ix:exclude><p id="xdx_235_zJ9GMJTVDEpk" style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><b>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</b></p></ix:exclude>


<ix:exclude><p id="xdx_230_zxYMOV2Ja7k7" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p></ix:exclude>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The raw materials used in the
production of the Company&#8217;s products are obtained by the Company&#8217;s co-packers and consist primarily of materials such
as the flavors, caffeine, sugars or sucralose, taurine, vitamins, CBD, and hemp seed protein contained in its beverages, the bottles
and cans in which its beverages are packaged, and the labeling on the outside of its beverages. These principal raw materials are
subject to price and availability fluctuations. The Company currently relies on a few key co-packers, which in turn rely on a few
key suppliers. The Company continually endeavors to have back-up co-packers, which co-packers would in turn depend on their third-party
suppliers to supply certain of the flavors and concentrates that are used in the Company&#8217;s beverages. The Company is also
dependent on these co-packers to negotiate arrangements with their existing suppliers that would enable the Company to obtain access
to certain of such concentrates or flavor formulas under certain extraordinary circumstances. Additionally, in a limited number
of cases, the Company&#8217;s co-packers may have contractual restrictions with their suppliers or the Company&#8217;s co-packers
may need to obtain regulatory approvals and licenses that may limit the co-packers&#8217; ability to enter into agreements with
alternative suppliers. Contractual restrictions in the agreements the Company has with certain distributors may also limit the
Company&#8217;s ability to enter into agreements with alternative distributors. The Company believes that a satisfactory supply
of co-packers will continue to be available at competitive prices, although there can be no assurance in this regard. With respect
to Gold Leaf&#8217;s operations, the Company continually endeavors to contract with additional beverage vendors to ensure the Company
has adequate inventory. The Company believes that a satisfactory supply of vendors will continue to be available at competitive
prices, although there can be no assurance in this regard.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">The Company had certain vendors
that individually represented 10% or more of the Company&#8217;s inventory purchases. For the three months ended September 30,
2021, the Company purchased 29% of its inventory from two vendors. Of these vendors, $<span id="xdx_908_ecustom--VendorsAmount_c20210101__20210930_pp0p0" title="Vendors amount"><ix:nonFraction name="kgkg:VendorsAmount" contextRef="From2021-01-01to2021-09-30" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">45,242</ix:nonFraction></span> is due to these vendors as of the
balance sheet dated September 30, 2021. For the year ended December 31, 2020, the Company did not purchase in excess of 10% of
its inventory from any single vendor.&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2021-01-01to2021-09-30" escape="true" name="us-gaap:SubsequentEventsTextBlock"><p id="xdx_805_eus-gaap--SubsequentEventsTextBlock_zcTGB39rXYR9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 22 &#8211;<span id="xdx_82B_zMVHzwQhZNdf"> SUBSEQUENT EVENTS</span></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">Management
has evaluated subsequent events through November 15, 2021, the date that the September 30, 2021 Consolidated Financial Statements
were issued, and has determined the following events have occurred that would warrant additional disclosure:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify; background-color: white">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white">
<tr style="vertical-align: top">
<td style="width: 36pt"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%; width: 5%"><span style="font: 10pt Times New Roman, Times, Serif">(1)</span></td>
<td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On October 4, 2021, the Company issued an aggregate of <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20211001__20211004__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zGbqFhDToHWi" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-10-012021-10-04_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">16,127,104</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20211001__20211004__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zpuDq7cAysSh" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-10-012021-10-04_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_904_ecustom--AccruedInterest_pp0p0_c20211001__20211004__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zfqA4fmATdXe" title="Accrued interest"><ix:nonFraction name="kgkg:AccruedInterest" contextRef="From2021-10-012021-10-04_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">48,751</ix:nonFraction></span> of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $<span id="xdx_90C_ecustom--DebtInstrumentConvertibleConversionPrice_iI_c20211004__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zlxO88nGNS61" title="Conversion Price1"><ix:nonFraction name="kgkg:DebtInstrumentConvertibleConversionPrice" contextRef="AsOf2021-10-04_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0152</ix:nonFraction></span>. The First 2021 Debenture was converted at the conversion price of $<span id="xdx_904_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20211004__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zfNrYwbFtGee" title="Debt Instrument, Convertible, Conversion Price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-10-04_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0122</ix:nonFraction></span>, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.</span></td></tr>
<tr style="vertical-align: top">
<td>&#160;</td>
<td style="line-height: 107%">&#160;</td>
<td style="text-align: justify; line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(2)</span></td>
<td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On October 14, 2021, the Company issued an aggregate of <span id="xdx_906_eus-gaap--ConversionOfStockSharesConverted1_c20211001__20211014__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_ztXlNBkH9wT5" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-10-012021-10-14_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">17,688,056</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_904_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20211001__20211014__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zdLM8BckGPP8" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-10-012021-10-14_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_905_ecustom--AccruedInterest_c20210601__20210609__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_pp0p0" title="Accrued interest"><ix:nonFraction name="kgkg:AccruedInterest" contextRef="From2021-06-012021-06-09_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,643</ix:nonFraction></span> of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $<span id="xdx_906_ecustom--DebtInstrumentConvertibleConversionPrice_iI_c20211014__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zsiAKpAByatf" title="Conversion Price1"><ix:nonFraction name="kgkg:DebtInstrumentConvertibleConversionPrice" contextRef="AsOf2021-10-14_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0143</ix:nonFraction></span>. The First 2021 Debenture was converted at the conversion price of $<span id="xdx_909_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20211014__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zU9OsrbkUd6l" title="Debt Instrument, Convertible, Conversion Price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-10-14_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0114</ix:nonFraction></span>, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.</span></td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="text-align: justify; font-family: Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(3)</span></td>
<td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On October 25, 2021, the Company issued an aggregate of <span id="xdx_90F_eus-gaap--ConversionOfStockSharesConverted1_c20211001__20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zZGaETsFkpj3" title="Number of shares issued"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-10-012021-10-25_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">16,124,161</ix:nonFraction></span> shares of Common Stock upon the conversion of $<span id="xdx_908_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20211001__20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zG5rredv9k7c" title="Conversion of Stock, Amount Converted"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-10-012021-10-25_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">150,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_900_ecustom--AccruedInterest_pp0p0_c20211001__20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_z5Qrt1UhmdR3" title="Accrued interest"><ix:nonFraction name="kgkg:AccruedInterest" contextRef="From2021-10-012021-10-25_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,567</ix:nonFraction></span> of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $<span id="xdx_90E_ecustom--DebtInstrumentConvertibleConversionPrice_iI_c20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_z8MnM7tTt9Jl" title="Conversion Price1"><ix:nonFraction name="kgkg:DebtInstrumentConvertibleConversionPrice" contextRef="AsOf2021-10-25_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0118</ix:nonFraction></span>. The First 2021 Debenture was converted at the conversion price of $<span id="xdx_903_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember_zmKjqaEP2Vw" title="Debt Instrument, Convertible, Conversion Price"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-10-25_custom_Second2021DebentureMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0094</ix:nonFraction></span>, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.</span></td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">(4)</span></td>
<td style="text-align: justify; line-height: 107%"><span style="font: 10pt Times New Roman, Times, Serif">On November 2, 2021, the Company completed a private placement transaction pursuant to the August 2021 SPA, the purchase price for the August 2021 Debenture was $<span id="xdx_900_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20211102__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement20212Member__us-gaap--LongtermDebtTypeAxis__custom--Second20212DebentureMember_z9AgoDhHfctf" title="Debt instrument face amount"><ix:nonFraction name="us-gaap:DebtInstrumentFaceAmount" contextRef="AsOf2021-11-02_us-gaap_SubsequentEventMember_custom_SecuritiesPurchaseAgreement20212Member_custom_Second20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,500,000</ix:nonFraction></span>, less $<span id="xdx_905_eus-gaap--DebtInstrumentFeeAmount_iI_pp0p0_c20211102__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement20212Member__us-gaap--LongtermDebtTypeAxis__custom--Second20212DebentureMember_zZMmXDHV1F5h" title="Origination fees"><ix:nonFraction name="us-gaap:DebtInstrumentFeeAmount" contextRef="AsOf2021-11-02_us-gaap_SubsequentEventMember_custom_SecuritiesPurchaseAgreement20212Member_custom_Second20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">60,000</ix:nonFraction></span> for origination fees, which consisted of the &#8220;original issue discount&#8221; of $<span id="xdx_90C_ecustom--OriginalIssueDiscount_iI_pp0p0_c20211102__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreement20212Member__us-gaap--LongtermDebtTypeAxis__custom--Second20212DebentureMember_zOOYyhEPwnhj" title="Original issue discount"><ix:nonFraction name="kgkg:OriginalIssueDiscount" contextRef="AsOf2021-11-02_us-gaap_SubsequentEventMember_custom_SecuritiesPurchaseAgreement20212Member_custom_Second20212DebentureMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">60,000</ix:nonFraction></span>.<span style="background-color: yellow"> </span></span></td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%">&#160;</td>
<td style="line-height: 107%">&#160;</td>
<td style="line-height: 107%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 107%">&#160;</td>
<td style="line-height: 107%">(5)&#160;</td>
<td style="text-align: justify; line-height: 107%">On November 10, 2021, the Company issued an aggregate of <span id="xdx_901_eus-gaap--ConversionOfStockSharesConverted1_c20211101__20211110__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zLCpCfnQAGcd"><ix:nonFraction name="us-gaap:ConversionOfStockSharesConverted1" contextRef="From2021-11-012021-11-10_custom_Second2021DebentureMember_us-gaap_SubsequentEventMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">27,228,433</ix:nonFraction> </span>shares of Common Stock upon the conversion of $<span id="xdx_906_eus-gaap--ConversionOfStockAmountConverted1_pp0p0_c20211101__20211110__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zotrXeq3k4Dc"><ix:nonFraction name="us-gaap:ConversionOfStockAmountConverted1" contextRef="From2021-11-012021-11-10_custom_Second2021DebentureMember_us-gaap_SubsequentEventMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">200,000</ix:nonFraction></span> of the principal of, and $<span id="xdx_902_ecustom--AccruedInterest_pp0p0_c20211101__20211110__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zR2m4NQjBeDf"><ix:nonFraction name="kgkg:AccruedInterest" contextRef="From2021-11-012021-11-10_custom_Second2021DebentureMember_us-gaap_SubsequentEventMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">1,490</ix:nonFraction> </span>of accrued interest on, the First February 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $<span id="xdx_90F_ecustom--DebtInstrumentConvertibleConversionPrice_iI_c20211110__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zAJB9J9cpmM2"><ix:nonFraction name="kgkg:DebtInstrumentConvertibleConversionPrice" contextRef="AsOf2021-11-10_custom_Second2021DebentureMember_us-gaap_SubsequentEventMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0093</ix:nonFraction></span>. The First February 2021 Debenture was converted at the conversion price of $<span id="xdx_908_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20211025__us-gaap--LongtermDebtTypeAxis__custom--Second2021DebentureMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zdloviprTSbc"><ix:nonFraction name="us-gaap:DebtInstrumentConvertibleConversionPrice1" contextRef="AsOf2021-10-25_custom_Second2021DebentureMember_us-gaap_SubsequentEventMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0074</ix:nonFraction></span>, which was the lower of the 2021 February Fixed Conversion Price and the 2021 February Market Conversion Price.&#160;</td></tr>
</table>


</ix:nonNumeric><p id="xdx_816_zdbGm6iIzKP9" style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 36pt; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"></p>

<!-- Field: Page; Sequence: 47; Value: 1 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 6pt; margin-bottom: 6pt"><p style="font-size: 10pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence -->&#160;</p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&#160;</p>

<p style="margin: 0"></p>

<p style="margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>ITEM 2.</b> <b><span id="a_001"></span>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS<br />
<br />
</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For a description of our significant
accounting policies and an understanding of the significant factors that influenced our performance during the three months and
nine months ended September 30, 2021, this &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results
of Operations&#8221; (hereafter referred to as &#8220;MD&amp;A&#8221;) should be read in conjunction with the unaudited consolidated
financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as
our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the &#8220;2020 Form 10-K&#8221;).</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note about Forward-Looking Statements</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">This Quarterly Report on Form 10-Q includes
statements that constitute &#8220;forward-looking statements.&#8221; These forward-looking statements are often characterized by
the terms &#8220;may,&#8221; &#8220;believes,&#8221; &#8220;projects,&#8221; &#8220;intends,&#8221; &#8220;plans,&#8221; &#8220;expects,&#8221;
or &#8220;anticipates,&#8221; and do not reflect historical facts.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Specific forward-looking statements
contained in this portion of the Quarterly Report include, but are not limited to: (i) statements that are based on current projections
and expectations about the markets in which we operate, (ii) statements about current projections and expectations of general economic
conditions, (iii) statements about specific industry projections and expectations of economic activity, (iv) statements relating
to our future operations, prospects, results, and performance, (v) statements about the Chapter 11 Case, (vi) statements that the
cash on hand and additional cash generated from operations together with potential sources of cash through issuance of debt or
equity will provide the Company with sufficient liquidity for the next 12 months, and (vii) statements that the outcome of pending
legal proceedings will not have a material adverse effect on business, financial position and results of operations, cash flow
or liquidity.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Forward-looking statements involve risks,
uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. Factors and risks that could affect our results, future performance
and capital requirements and cause them to materially differ from those contained in the forward-looking statements include those
identified in our 2020 Form 10-K under Item 1A &#8220;Risk Factors&#8221;, as well as other factors that we are currently unable
to identify or quantify, but that may exist in the future.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, the foregoing factors
may generally affect our business, results of operations and financial position. Forward-looking statements speak only as of the
date the statements were made. We do not undertake and specifically decline any obligation to update any forward-looking statements.
Any information contained on our websites <span style="text-decoration: underline">www.konagoldbeverage.com<span style="color: black">,</span></span><span style="color: black">
</span><span style="text-decoration: underline">www.konagoldhemp.com<span style="color: black">,</span></span><span style="color: black"> </span><span style="text-decoration: underline">www.highdrateme.com<span style="color: black">,
</span></span><span style="color: black">and </span><span style="text-decoration: underline">www.goldleafdist.com</span> or any other websites referenced in this Quarterly
Report are not part of this Quarterly Report.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We undertake no obligation to update
or revise any of the forward-looking statements after the date of this to confirm forward-looking statements to actual results.
Important factors on which such statements are based are assumptions concerning uncertainties, including, but not limited to, uncertainties
associated with the following:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; padding: 0; width: 48px; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; padding: 0; width: 24px; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="font: 10pt/115% Times New Roman, Times, Serif; padding: 0; text-align: justify; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Inadequate
capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans; </span></td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; padding: 0; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; padding: 0; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="font: 10pt/115% Times New Roman, Times, Serif; padding: 0; text-align: justify; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Our
failure to earn revenues or profits; </span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Volatility
or decline of our stock price; </span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Potential
fluctuation in our financial results;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Rapid
and significant changes in markets; </span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Litigation
with or legal claims and allegations by outside parties;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Impacts
from the COVID-19 pandemic; and </span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#9679;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Insufficient
revenues to cover operating costs. </span></td></tr>
</table>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following discussion should be read
in conjunction with the financial statements and the notes thereto. This discussion contains forward-looking statements that involve
risks, uncertainties, and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking
statements included in this discussion as a result of various factors.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Results of Operations </b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Overview</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our business has grown rapidly since
inception, and we anticipate that our business will continue to grow; however, the year ended December 31, 2020, the Company saw
unforeseen delays in signing more favorable agreements with larger, reputable tier 1 and mid-size distributors and grocery chains
and we were additionally impacted by the COVID-19 pandemic during the fiscal year. The COVID-19 delayed the Company&#8217;s launch
of a variety of new products during most of the 2020 fiscal year &#8211; drinks and non-drink line broadening items. Our Beverages
Segment has three main revenue streams: product sales from online consumers, product sales through resellers, and product sales
from distributors. Product sales include sales of our energy drinks, HighDrate CBD-infused energy waters, and apparel such as t-shirts
and hats. In early 2019, we expanded our operations with the creation of a distribution center, which now functions as our Distribution
Segment. Our Distribution Segment has one main revenue stream: product sales to convenience stores, grocery stores, or smoke and
gift shops, which complement our current product offering. Product sales include sales of our beverages, as well as beverages and
snacks purchased for resale from several other beverage producers.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have experienced and expect to continue
to experience substantial growth in our operations as we seek to expand with additional products and acquisitions that complement
our current product offerings. We expect that revenue will continue to increase in the balance of fiscal year 2021 as distribution
related to our current distributors affected by COVID-19 that have resumed distribution, will continue to see fewer impacts from
the COVID-19 pandemic going forward. COVID-19 continues to impact the Company in fiscal year 2021 with logistical delays in delivery
of our products to customers. In addition, the Company has experienced delays in obtaining product related to logistical delays.
Despite the impact from COVID-19 on our revenues in the fiscal year 2020 and 2021, we still anticipate to sign larger, more favorable
agreements with larger, tier 1 and mid-size distributors in our Beverages Segment in the remaining quarter of fiscal 2021. Additionally,
we expect that our Distribution Segment will continue to see growth with the expansion of a new location. The following is a more
detailed discussion of our financial condition and results of operations for the period presented.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Three Months Ended September 30,
2021 compared to the Three Months Ended September 30, 2020 </i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Overview</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As reflected in the accompanying financial
statements, during the three months ended September 30, 2021, we incurred a net loss of approximately $2.2 million, compared to
a net loss of approximately $509,400 for the three months ended September 30, 2020. As of September 30, 2021, we had a stockholders&#8217;
deficit of approximately $5.1 million.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a more detailed discussion
of our financial condition and results of operations for the period presented, along with prior periods.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Revenue</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents our net
revenues, by revenue source, and the period-over-period percentage change, for the period presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 100%; margin-right: auto">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Online Sales</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Gold Leaf Distribution</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Shipping</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Sales Returns and Allowances</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">(16,599</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents our net
revenues, by revenue source, as a percentage of total net revenues for the periods presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 100%; margin-right: auto">
<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="7" style="font-weight: bold; text-align: center">Three Months Ended September 30,</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0">Revenues</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left">Distributors and Resellers</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right">45</td><td style="width: 1%; text-align: left">%</td><td style="width: 8%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Amazon</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">15</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Online Sales</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">35</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">64</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">3</td><td style="text-align: left">%</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30,
2021, we reported net revenues of approximately $545,400, which is an increase of approximately $232,700, or approximately 74%,
compared to net revenues of approximately $312,700 for the three months ended September 30, 2020. A decrease of approximately $40,900
was attributed to our Beverages Segment, while our Distribution Segment reported an increase in net revenue of approximately $265,500.
We attribute this decrease in our Beverages Segment sales to unforeseen production delays in our product line from our copackers.
In addition, our Beverages Segment continued to be impacted by the COVID-19 pandemic during the third quarter of the 2021 fiscal
year as we continued to have logistical delays in delivery of our products to customers. The Company has also continued to experience
delays in obtaining product for production related to logistical delays. We attribute the increase in revenues in our Distribution
Segment to increasing our distribution area, broadening our drinks and non-drink line, and distribution agreements. We expect that
revenue will increase in the last quarter of the fiscal year 2021 as we will continue to see fewer impacts from the COVID-19 pandemic
going forward. We anticipate to sign larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverages
Segment during the remaining quarter of fiscal 2021. Additionally, we anticipate our Distribution Segment will continue to see
growth with the expansion of a new location and additional sales employees to distribute our drink and non-drink line.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Cost of Revenues</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of revenues consists primarily
of expenses associated with products sold to distributors and resellers, including product and shipping costs. Costs also include
credit card fees, fees incurred for sales that occur on Amazon.com, and other transaction fees related to the processing of consumer
transactions. Typically, we expect that the cost of revenues will increase as a direct correlation to increases in sales. Thus,
our cost of revenues increases on an absolute basis versus on a percentage of sales basis. At the same time, when sales increase,
thereby increasing our orders with our co-packers, our cost of products decreases because of the volume discounts we receive from
our co-packers.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September
30, 2021, we reported cost of revenues of approximately $442,800, which is an increase of approximately $220,700, or approximately
99%, compared to approximately $222,100 for the three months ended September 30, 2020. This increase is attributed to an increase
in sales in Distribution Segment in the third quarter of fiscal 2021, compared to the prior year period. The cost of sales increase
was larger than the increase in sales. This is primarily attributed to an increased cost in obtaining our ingredients for our product
line in our Beverages Segment, an increased cost for production of our product in our Beverages Segment, and an increased cost
of shipping our product in our Beverages Segment. We expect that we will continue, to see an increased cost of sales in excess
of the expected increase in sales for the remaining quarter of fiscal year 2021, as the cost of shipping our products continues
to remain high. The Company continues to seek alternative methods to reduce costs for production and the cost of shipping our products.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Selling, General and Administrative
Expenses</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">SG&amp;A expenses consist primarily
of professional fees, salaries and wages, advertising, rent, travel expenses, sponsorships, and general office and administrative
expenses related to maintaining our facilities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">SG&amp;A expenses were approximately
$756,100 for the three months ended September 30, 2021, compared to approximately $500,200 in the three months ended September
30, 2020, an increase of $255,900, or approximately 51%. The increase in SG&amp;A expenses was primarily due to an increase in
salaries and wages of 77% attributed to both our Beverages Segment and Distribution Segment; an increase in professional fees of
335% attributed to our Beverages Segment; an increase in our advertising and promotion expenses of 295% attributed to both our
Beverages Segment and Distribution Segment; an increase in vehicles expenses of 102% attributed to our Distribution Segment; and
an increase in travel expenses of 278% attributed to both our Beverages Segment and Distribution Segment. These increases were
offset by a decrease in bad debt expense of 105% attributed to our Beverages Segment.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Salaries and wages were approximately
$382,900 in the three months ended September 30, 2021, compared to approximately $216,700 for the three months ended September
30, 2020, an increase of approximately $166,200, which was attributed to both our Beverages Segment (approximately $120,000) and
our Distribution Segment (approximately $46,100). This increase was the result of hiring additional employees, who are pivotal
to the success of our Company. Professional fees were approximately $90,400 for the three months ended September 30, 2021, compared
to $20,800 for the three months ended September 30, 2020, an increase of approximately $69,700, which was attributed to our corporate-related
activities. This increase was the result of raising capital that we believed was necessary for our anticipated growth. Advertising
and promotion expenses were approximately $21,600 for the three months ended September 30, 2021, compared to approximately $5,500
for the three months ended September 30, 2020, an increase of approximately $16,100. This increase was attributed to both our Beverages
Segment and Distribution Segment and the result of promoting drink and non-drink product lines through samples, trade shows and
events, and store displays. Vehicle expense was approximately $29,400 in the three months ended September 30, 2021, compared to
approximately $14,600 for the three months ended September 30, 2020, an increase of approximately $14,800, which was attributed
to our Distribution Segment. Additional delivery vehicles were purchased during fiscal year 2021 and, with the increase in the
number of delivery vehicles, our cost of general repairs and maintenance made to our delivery vehicles, as a group, increased.
Travel expenses were approximately $10,400 for the three months ended September 30, 2021, compared to approximately $2,700 for
the three months ended September 30, 2020, an increase of approximately $7,600. This increase was attributed to both our Beverages
Segment and Distribution Segment and the result of promoting drink and non-drink product lines at trade shows and events for Beverages
Segment, and travel related to the expansion of our Distribution Segment. This increase was offset by a decrease in bad debt expense,
which was approximately $(2,100) in the three months ended September 30, 2021, compared to approximately $38,900 for the three
months ended September 30, 2020, a decrease of approximately $41,000, which was primarily attributed to our Beverages Segment.
This decrease was the result of a decrease in uncollectible accounts and a decrease in the allowance for uncollectible accounts
in the three months ended September 30, 2021, compared to three months ended September 30, 2020, which was related to outstanding
invoices from distributors impacted by the COVID-19 pandemic during the third quarter of the 2020 fiscal year.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We expect that we will continue to expand
our business, operations, and incur additional SG&amp;A expenses related to operations in both our Beverages Segment and Distribution
Segment. Additionally, corporate-related expenses associated with having our Common Stock quoted on the OTCQB and being required
to file certain reports and other information with the SEC. We anticipate hiring additional personal in the remaining quarter of
fiscal 2021 who, we expect, will be are integral to the success of our growing Company.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Net Loss</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We incurred a net loss of approximately
$2.2 million for the three months ended September 30, 2021, an increase of approximately $1.7 million compared to the previous
three months ending September 30, 2020, which had a net loss of approximately $509,400. This net loss in the three months ended
September 30, 2021 is primarily related to our to corporate-related expenses, which include interest expense related to the Warrants
issued in connection with the Debentures and non-cash expense on our derivative liability. The fair value of the Debentures are
re-measured each reporting period until the Debentures are either converted or expire. In each reporting period during the term
of the Debentures, the change in the fair value will either be recognized as a non-cash expense or non-cash income. The change
in the fair value of the Debentures is not impacted by our actual operations but instead is strongly tied to the change in the
market value of our Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Nine Months Ended September 30,
2021 compared to the Nine Months Ended September 30, 2020 </i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Overview</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As reflected in the accompanying financial
statements, during the nine months ended September 30, 2021, we incurred a net loss of approximately $4.4 million and used cash
in operations of approximately $1.6 million, compared to a net loss of approximately $2.2 million and used cash in operations of
approximately $6878,600 for the nine months ended September 30, 2020. As of September 30, 2021, we had a stockholders&#8217; deficit
of approximately $5.1 million.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a more detailed discussion
of our financial condition and results of operations for the period presented, along with prior periods.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Revenue</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents our net
revenues, by revenue source, and the period-over-period percentage change, for the period presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">121,317</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">35,176</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">228,881</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">19,181</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">15,039</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Net Revenues</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">741,812</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents our net
revenues, by revenue source, as a percentage of total net revenues for the periods presented:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="7" style="font-weight: bold; text-align: center">Nine Months Ended September 30,</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left; padding-top: 0; padding-right: 0">Revenues</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left">Distributors and Resellers</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right">50</td><td style="width: 1%; text-align: left">%</td><td style="width: 8%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right">44</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Amazon</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">16</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Online Sales</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Gold Leaf Distribution</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">31</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">49</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Shipping</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Sales Returns, and Allowances</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(4</td><td style="text-align: left">)%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3</td><td style="text-align: left">)%</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September
30, 2021, we reported net revenues of approximately $1,799,000, which is an increase of approximately $1,057,100, or approximately
143%, compared to net revenues of approximately $741,800 for the nine months ended September 30, 2020. An increase of approximately
$404,700 was attributed to our Beverages Segment, while our Distribution Segment reported an increase in net revenues of approximately
$654,900. We attribute this increase in sales to an effort to sign more favorable agreements with larger, reputable tier 1 and
mid-size distributors and grocery chains. These contracts saw unforeseen delays and were additionally impacted by the COVID-19
pandemic during the fiscal year. The COVID-19 delayed the Company&#8217;s launch of a variety of new products during most of the
2020 fiscal year &#8211; drinks and non-drink line broadening items. We attribute this decrease in our Beverages Segment sales
to unforeseen production delays in our product line from our copackers. In addition, our Beverages Segment continued to be impacted
by the COVID-19 pandemic during the nine months ended September 30, 2021 as we continued to have logistical delays in delivery
of our products to customers. The Company has also continued to experience delays in obtaining product for production related to
logistical delays. We also attribute this increase to the acquisition of a beverage company in the first quarter of fiscal 2021
that broadened our drink product line in our Beverages Segment. We attribute the increase in revenues in our Distribution Segment
to increasing our distribution area, broadening our drinks and non-drink line, and distribution agreements. We expect that revenue
will increase in the last quarter of the fiscal year 2021 as we will continue to see fewer impacts from the COVID-19 pandemic going
forward. We anticipate to sign larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverages
Segment during the remaining quarter of fiscal 2021. Additionally, we anticipate our Distribution Segment will continue to see
growth with the expansion of a new location and additional sales employees to distribute our drink and non-drink line.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Cost of Revenues</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of revenues consists primarily
of expenses associated with products sold to distributors and resellers, including product and shipping costs. Costs also include
credit card fees, fees incurred for sales that occur on Amazon.com, and other transaction fees related to the processing of consumer
transactions. Typically, we expect that the cost of revenues will increase as a direct correlation to increases in sales. Thus,
our cost of revenues increases on an absolute basis versus on a percentage of sales basis. At the same time, when sales increase,
thereby increasing our orders with our co-packers, our cost of products decreases because of the volume discounts we receive from
our co-packers.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September
30, 2021, we reported cost of revenues of approximately $1,443,700, which is an increase of approximately 920,000, or approximately
176%, compared to approximately $523,800 for the nine months ended September 30, 2020. This increase is attributed to an increase
in sales in both our Beverages Segment and Distribution Segment in the second quarter of fiscal 2021, compared to the prior year
period. The cost of sales increase was larger than the increase in sales. This is attributed to an increased cost in obtaining
our ingredients for our product line in our Beverages Segment, an increased cost for production of our product in our Beverages
Segment, and an increased cost of shipping our product in our Beverages Segment. We expect that we will continue to an increased
cost of sales larger than the increase in sales for the remaining quarter of fiscal year 2021 as the cost of shipping our product
continues to remain high. The Company continues to seek alternative methods to reduce costs for production and the cost of shipping
our product.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Selling, General and Administrative
Expenses</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">SG&amp;A expenses consist primarily
of professional fees, salaries and wages, advertising, rent, travel expenses, sponsorships, and general office and administrative
expenses related to maintaining our facilities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">SG&amp;A expenses were approximately
$1,968,900 for the nine months ended September 30, 2021, compared to approximately $1,840,000 in the nine months ended September
30, 2020, an increase of $128,800, or approximately 9%. The increase in SG&amp;A expenses was primarily due to an increase in legal
and accounting fees of 22% attributed to our corporate-related expenses; an increase of 28% in rent expense attributed to both
our Beverages Segment and our Distribution Segment; an increase in professional fees of 308% attributed to our corporate-related
activities; an increase in insurance of 192% attributed to both our Beverages Segment; an increase in our advertising and promotion
expenses of 118% attributed to both our Beverages Segment and Distribution Segment; and a 47% increase in OTCM fees attributed
to corporate-related expenses. These increases were offset by a decrease in salaries and wages of 20% attributed to our Beverages
Segment; a decrease in sponsorships of 49% attributed to our Beverages Segment; and a decrease in bad debt expense of 49% attributed
to our Beverages Segment.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Legal and accounting fees were approximately
$277,500 for the nine months ended September 30, 2021, an increase of approximately $49,400, compared to approximately $228,100
for the nine months ended September 30, 2020, which was attributed to our corporate-related activities. This increase was the result
of audit related and legal expenses related to securities in the current year that integral to the success of our growing Company.
Rent expenses were approximately $150,000 for the nine months ended September 30, 2021, compared to approximately $117,000 for
the nine months ended September 30, 2020, an increase of approximately $33,000. This increase was attributed to both our Beverages
Segment and our Distribution Segment and the result of our moving to a larger warehouse facility that was necessary due to our
anticipated growth. Professional fees were approximately $185,900 for the nine months ended September 30, 2021, compared to approximately
$45,300 for the nine months ended September 30, 2020, an increase of approximately $139,600, which was attributed to our corporate-related
activities. Insurance expense was approximately $29,600 for the nine months ended September 30, 2021, compared to approximately
$10,100 for the nine months ended September 30, 2020, an increase of approximately $19,400. This increase was attributed to our
Beverages Segment and the result of signing larger, more favorable agreements with larger, tier 1 and mid-size distributors and
customers. Advertising and promotion expenses were approximately $45,700 for the nine months ended September 30, 2021, compared
to approximately $21,000 for the nine months ended September 30, 2020, an increase of approximately $24,700. This increase was
attributed to both our Beverages Segment and Distribution Segment and the result of promoting drink and non-drink product lines
through samples, trade shows and events, and store displays. OTCM fees attributed to corporate-related expenses were approximately
$75,000 for the nine months ended September 30, 2021, compared to approximately $50,900 for the nine months ended September 30,
2020, an increase of approximately $24,100. This increase was the result of fees paid to the OTCM to have our Common Stock quoted
on the OTCQB versus the OTC Pink. These increases were offset by a decrease in salaries and wages, which were approximately $904,300
in the nine months ended September 30, 2021, compared to approximately $1.1 million for the nine months ended September 30, 2020,
a decrease of approximately $226,900, which was attributed primarily to our Beverages Segment. This decrease was the result of
issuance of shares of our Common Stock made in the prior year to employees pursuant to their agreements. Sponsorships were approximately
$12,200 in the nine months ended September 30, 2021, compared to approximately $23,800 for the nine months ended September 30,
2020, a decrease of approximately $11,600, which was attributed to our Beverages Segment. This decrease was the result of terminating
sponsorships that were no longer advantageous to the Company. Bad debt was approximately $21,200 in the nine months ended September
30, 2021, compared to approximately $41,600 for the nine months ended September 30, 2020, a decrease of approximately $20,400,
which was attributed to our Beverages Segment. This decrease was the result of a decrease in uncollectible accounts and a decrease
in the allowance for uncollectible accounts in the nine months ended September 30, 2021, compared to the nine months ended September
30, 2020, which was related to outstanding invoices from distributors impacted by the COVID-19 pandemic during the first three
quarters of the 2020 fiscal year.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We expect that we will continue to expand
our business, operations, and incur additional SG&amp;A expenses related to operations in both our Beverages Segment and Distribution
Segment. Additionally, corporate-related expenses associated with having our Common Stock quoted on the OTCQB and being required
to file certain reports and other information with the SEC. We anticipate hiring additional personal in the remaining quarter of
fiscal 2021 who, we expect, will be integral to the success of our growing Company.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Net Loss</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We incurred a net loss of approximately
$4.4 million for the nine months ended September 30, 2021, an increase of approximately $2.2 million compared to the previous year
nine months ending September 30, 2020, which had a net loss of approximately $2.2 million. This net loss is primarily corporate-related
expenses that are necessary for our growth, which include interest expense related to the Warrant issued in connection with the
Debentures and non-cash expense on our derivative liability. The fair value of the Debentures will be re-measured each reporting
period until the Debentures are either converted or expire. In each reporting period during the term of the Debentures, the change
in the fair value will either be recognized as a non-cash expense or non-cash income. The change in the fair value of the Debentures
is not impacted by our actual operations but instead is strongly tied to the change in the market value of our Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Segments &#8211; Three and Nine
Months Ended September 30, 2021 and 2020</i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For the three and nine months ended
September 30, 2021 and 2020, we had two reportable segments: (i) Beverages Segment and (ii) Distribution Segment. Amounts that
are not allocated to either of these reportable segments are reported in &#8220;Corporate and Eliminations.&#8221; We evaluate
performance and allocate resources based on net revenue, cost of revenues, and gross profit. Information regarding the operations
of these reportable segments is as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="7" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Three Months Ended<br /> September 30,</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="7" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Nine Months Ended<br /> September 30,</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2020</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; width: 40%; text-align: left">Beverages Segment</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">245,918</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">207,763</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">613,016</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,018,041</td><td style="width: 1%; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; text-align: left">Distribution Segment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">108,719</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">374,247</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">228,881</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">883,825</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left">Corporate and Eliminations</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(41,928</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(36,635</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(100,085</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(102,867</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Total Revenues, Net of Sales, Returns, and Allowances</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">312,709</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">545,375</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">741,812</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">1,798,999</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">COST OF REVENUES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(16,798</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt">Beverages</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">339,688</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">514,995</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,380,612</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,308,456</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt">Distribution</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">70,385</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">152,578</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">198,547</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">353,239</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="padding: 0 0 0 20pt; text-align: left">Corporate and Eliminations</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">90,160</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(88,537</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">260,845</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">307,146</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0 0 0 20pt; font-weight: bold; text-align: left">Gross profit</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">500,233</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">756,110</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">1,840,004</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">1,968,841</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Liquidity and Capital Resources</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Going Concern</i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have incurred operating losses since
inception and have negative cash flow from operations since inception. As of September 30, 2021, we had a stockholders&#8217; deficit
of approximately 5.1 million and we incurred a net loss of approximately $4.4 million during the nine months ended September 30,
2021. We also utilized cash in operations of approximately $1.6 million during the nine months ended September 30, 2021. As a result,
our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient
cash flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue
our operations.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our consolidated financial statements
have been prepared on a going concern basis, which implies we may not continue to meet our obligations and continue our operations
for the next fiscal year. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary
debt or equity financing to continue operations until we begin generating positive cash flow.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">There is no assurance that we will ever
be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable
to us, if at all. The issuance of additional equity securities by us would result in a significant dilution in the equity interests
of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities
and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be
unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business,
the result of which would be that our stockholders would lose some or all of their investment. The consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classifications of liabilities that may result should we be unable to continue as a going concern.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Lines of Credit</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Since inception, we have financed our
operations primarily through internally generated funds, private sales of stock, accruals of compensation, and the use of our lines
of credit. In summary, our lines of credit are as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Total Amount Available</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Interest Rate<br /> (per annum)</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Outstanding Principal Balance &#160; as of<br /> September 30, 2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Accrued Interest as of September 30, 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; font-weight: bold; text-align: left">Kona Gold Line of Credit #1 &#8211; Related Party</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,500,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right">3.75</td><td style="width: 1%; text-align: left">%</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">1,372,651</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">73,906</td><td style="width: 1%; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif"><b>Kona Gold Line of Credit #2<sup>a</sup></b></span></td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">400,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3.75</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">198,470</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">42,683</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Gold Leaf Line of Credit &#8211; Related Party</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">200,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3.75</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">125,500</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">7,065</td><td style="text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><sup>a</sup></span></td>
<td style="text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">This line of credit was provided by Matthew Nicoletti, an otherwise unaffiliated third party to whom we previously sold and issued certain shares of our Series B Preferred Stock (as then constituted) and Series C Preferred Stock (as then constituted), all of which have been converted into shares of our Common Stock and sold into the public market. Mr. Nicoletti is no longer the record or beneficial owner of any of our equity. There was no connection between our prior equity transactions with Mr. Nicoletti and our entry into this line of credit.</span></td></tr>
</table>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.45in; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Notes Payable &#8211; Related Party</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We had the following outstanding notes
payable from a related party during the nine months ended September 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Note (1)</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Issuance Date</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 13%; text-align: left">Long-term Loan &#8211; Kona Gold</td><td style="width: 2%">&#160;</td>
    <td style="width: 13%; text-align: left">October 31, 2018</td><td style="width: 2%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Long-term Loan &#8211; Gold Leaf</td><td>&#160;</td>
    <td style="text-align: left">February 19, 2019</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">70,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">March 15, 2022</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">70,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">55,000</td><td style="text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">(1)</span></td>
<td style="text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">Each of the notes payable was issued by us in favor of Robert Clark, our President, Chief Executive Officer, Secretary, and Chairman of our Board.</span></td></tr>
</table>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 1in"><i></i>&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Note Receivable &#8211; Branded Legacy</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 26, 2016, Robert Clark formed
Elev8 Hemp, LLC, a Delaware limited liability company (&#8220;Elev8 Hemp&#8221;), on behalf of Ryan Medico, our then-Chief Financial
Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, we entered into a letter
of intent with Elev8 Hemp to acquire it, such that it would become our wholly-owned subsidiary. Pursuant to the letter of intent,
on June 7, 2016, we entered into an Acquisition Agreement with Elev8 Hemp (the &#8220;Elev8 Hemp Acquisition Agreement&#8221;),
whereby we agreed to acquire 100% of the ownership of Elev8 Hemp and, in exchange, we agreed to issue to Mr. Medico five million
restricted shares of our Common Stock, which had a fair market value of $50,000. The Elev8 Hemp Acquisition Agreement provided
that, if we failed to adequately capitalize the development of Elev8 Hemp to complete its objectives set forth in its business
plan, Mr. Medico would have the option until March 31, 2018 to repurchase Elev8 Hemp from us for a purchase price of $50,000, which
could be paid in shares of our Common Stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 10, 2016, we entered into
a Membership Interest Purchase Agreement (the &#8220;Membership Interest Purchase Agreement&#8221;) with Branded Legacy, to sell
100% of the issued and outstanding membership interests of Elev8 Hemp to Branded Legacy in consideration of Branded Legacy&#8217;s
issuance to us of 200,000,000 shares of its common stock, par value $0.00001. In connection with this transaction, Mr. Medico became
the Chief Executive Officer and sole director of Branded Legacy. The parties desired to enter into the Membership Interest Purchase
Agreement because we did not have adequate capital to fund the development of Elev8 Hemp&#8217;s business, as well as our own.
Until July 2018, Mr. Medico also continued to serve as our Chief Financial Officer.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 14, 2017, our Board declared
a dividend to our stockholders of an aggregate of 53,196,608 shares of common stock of Branded Legacy. Our stockholders received
one share of common stock of Branded Legacy for every 10 shares of our Common Stock held on the record date. On the record date,
we had approximately 104 stockholders, all of whom received this dividend. After the payment of the dividend, we held 146,803,392
shares of common stock of Branded Legacy.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 6, 2018, we entered into a
Securities Exchange and Settlement Agreement (the &#8220;First Exchange Agreement&#8221;) with Branded Legacy. Pursuant to the
First Exchange Agreement, we exchanged with Branded Legacy the remaining 146,803,392 shares of its common stock held by us for
2,746,723 shares of Branded Legacy&#8217;s Series D preferred stock. The shares of Series D preferred stock were initially convertible
into 164,803,380 shares of Branded Legacy&#8217;s common stock.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 26, 2019, we entered into
a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the 2,746,723 shares of Branded Legacy&#8217;s
Series D preferred stock for its 10-year Promissory Note in our favor in the original principal amount of $1,500,000 (the &#8220;Branded
Legacy Note&#8221;). The Branded Legacy Note is unsecured, non-convertible, and all principal and accrued and unpaid interest thereon
is due and payable on November 27, 2029.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In more recent discussions with our
independent registered public accounting firm, we determined that the Branded Legacy Note should be classified as a note receivable
on our balance sheets as of September 30, 2021 and December 31, 2020, with a full reservation due to current doubts about collectability
due to the dollar amount and duration of the term of the Branded Legacy Note, rather than disclosing the note receivable as an
&#8220;investment&#8221; but not recording it on the balance sheets. Because of this re-classification, the Banded Legacy Note
is no longer an off-balance sheet arrangement.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Paycheck Protection Promissory Note
and Economic Injury Disaster Loan</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 4, 2020, we entered into a Paycheck
Protection Promissory Note in the original principal amount of $95,161 (the &#8220;PPP Loan&#8221;) with Wells Fargo Bank, N.A.
The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck Protection Program (the &#8220;PPP&#8221;),
which was established as part of the Coronavirus Aid, Relief and Economic Security Act (the &#8220;CARES Act&#8221;) and is administered
by the U.S. Small Business Administration. The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the
average monthly payroll expenses of the qualifying business. The current term of the PPP Loan is two years, with a maturity date
of May 6, 2022 and it contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan
are deferred for the first six months of the term of the PPP Loan, or November 2020. Thereafter, principal and interest are payable
monthly and may be prepaid by us at any time prior to maturity with no prepayment penalties.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In January
2021, the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $117,487 (the &#8220;PPP
Loan 2&#8221;) with Wells Fargo Bank, N.A. The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck
Protection Program (the &#8220;PPP&#8221;), which was established as part of the Coronavirus Aid, Relief and Economic Security
Act the (&#8220;CARES Act&#8221;) and is administered by the U.S. Small Business Administration. The PPP provides for loans to
qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The current
term of the PPP Loan is five years, with a maturity date of January 2026 and it contains a favorable fixed annual interest rate
of 1.00%. Payments of principal and interest on the PPP Loan are deferred for the first six months of the term of the PPP Loan,
or November 2020. Thereafter, principal and interest are payable monthly and may be prepaid by us at any time prior to maturity
with no prepayment penalties.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Under the terms of the CARES Act, recipients
can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such forgiveness will be determined,
subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including,
but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, &#8220;Qualifying Expenses&#8221;),
and on the maintenance of employee and compensation levels during a certain time period following the funding of the PPP Loan.
The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period.
We have used the proceeds of the PPP Loan for salaries and wages, building lease expense, and utilities. However, no assurance
is provided that we will be able to obtain forgiveness of the PPP Loan in whole or in part.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">On April 27,
2021, the Paycheck Protection Promissory Note, dated May 4, 2020, in the original principal amount of $95,161 (the &#8220;PPP Loan&#8221;)
with Wells Fargo Bank, N.A was forgiven for the full amount. The PPP Loan was made under, and is subject to, the terms and conditions
of the Paycheck Protection Program (the &#8220;PPP&#8221;), which was established as part of the Coronavirus Aid, Relief and Economic
Security Act the (&#8220;CARES Act&#8221;) and is administered by the U.S. Small Business Administration.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2020, we also received an advance
in the amount of $7,000 as part of the Economic Injury Disaster Loan program offered by the U.S. Small Business Administration.
This advance was received after we filed our application with regarding to the PPP. The advance was not included in any of the
documentation related to the PPP Loan. We are in the process of determining how this advance will be included as part of the PPP
Loan forgiveness.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>2020 Securities Purchase Agreement</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2020, the Company completed the
2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the First
2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second 2020
Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third 2020
Debenture promptly after the SEC declared the Registration Statement effective. The 2020 Debentures are due 12 months from their
respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each of its subsidiaries pursuant
to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s subsidiaries, and the Company. Initially,
the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.05 per share, subject to adjustment
(the &#8220;2020 Fixed Conversion Price&#8221;), or (ii) 80% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;)
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the &#8220;2020
Market Conversion Price&#8221;). The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. The
2020 Debentures are subject to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any portion
of the 2020 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of
the Common Stock issuable upon conversion of the 2020 Debentures or exercise of the 2020 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at
least 65 days&#8217; prior written notice to the Company. The 2020 Debentures accrue interest at an annual rate equal to 8% and
are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2020 Debentures or otherwise
accelerates the maturity date, as provided for in the 2020 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the 2020 Debentures) are then satisfied, in shares of the Common Stock at the 2020 Market Conversion
Price on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">At the Company&#8217;s option, it has
the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their respective
maturity dates; <i>provided</i>, <i>that</i>, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP
of the Common Stock is less than the 2020 Fixed Conversion Price, initially $0.05 per share, and (ii) there is no Equity Conditions
failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon,
as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;).
The Company must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the
amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The 2020 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common Stock or
common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits, reverse
stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in
an adjustment of the conversion price of the 2020 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the terms of the Registration
Rights Agreement, the Company agreed to file the Registration Statement with the SEC registering for resale the Conversion Shares
and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling Stockholder.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the 2020 SPA, the purchase
price for the First 2020 Debenture was $250,000, less $15,000 for origination fees, which consisted of the &#8220;original issue
discount&#8221; of $10,000 and $5,000 as a structuring fee. On December 23, 2020, the Company converted $100,000 of the principal
of, and $12,274 of accrued interest on, the First 2020 Debenture into 8,255,438 shares of the Company&#8217;s common stock. On
January 25, 2021, the Company converted $150,000 of the principal of, and $1,118 of accrued interest on, the First 2020 Debenture
into 7,094,732 shares of the Company&#8217;s common stock, see Note 11, <i>equity transactions</i>. At September 30, 2021, no balance
remains on the principal balance of the First 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the 2020 SPA, the purchase
price for the Second 2020 Debenture was $250,000, less $10,000 for origination fees, which consisted of the &#8220;original issue
discount&#8221; of $10,000 fee. On January 25, 2021, the Company converted $100,000 of the principal of, and $10,410 of accrued
interest on, the Second 2020 Debenture into 5,183,613 shares of the Company&#8217;s common stock. On February 19, 2021, the Company
converted $150,000 of the principal of, and $855 of accrued interest on, the Second 2020 Debenture into 7,252,634 shares of the
Company&#8217;s common stock see Note 11, <i>equity transactions</i>. At September 30, 2021, no balance remains on the principal
balance of the Second 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the 2020 SPA, the purchase
price for the Third 2020 Debenture was $500,000, less $10,000 for origination fees, which consisted of the &#8220;original issue
discount&#8221; of $10,000 fee. On January 12, 2021, the Company converted $200,000 of the principal of, and $1,425 of accrued
interest on, the First 2020 Debenture into 10.887,819 shares of the Company&#8217;s common stock, see Note 11, <i>equity transactions</i>.
On May 5, 2021, the Company converted $300,000 of the principal of, and $7,496 of accrued interest on, the First 2020 Debenture
into issued an aggregate of 14,436,426 shares of common stock, see Note 11, <i>equity transactions</i>. At September 30, 2021,
no balance remains on the principal balance of the Third 2020 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>February 2021 Securities Purchase
Agreement</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2021, the Company completed
a private placement transaction (the &#8220;February 2021 Private Placement&#8221;) of two secured convertible debentures (the
&#8220;February 2021 Debentures&#8221;), convertible for up to 154,958,678 shares (the &#8220;February 2021 Conversion Shares&#8221;)
of Common Stock and granted a Warrant to purchase Common Stock (the &#8220;February 2021 Warrant&#8221;), exercisable for up to
50,000,000 shares of Common Stock (the &#8220;February 2021 Warrant Shares&#8221;), pursuant to that certain Securities Purchase
Agreement between the Selling stockholder and the Company, dated as of February 10, February 2021 (the &#8220;February 2021 SPA&#8221;).
The Company sold and issued the initial February 2021 Debenture (the &#8220;First February 2021 Debenture&#8221;) and granted the
February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue the second February 2021
Debenture (the &#8220;Second February 2021 Debenture&#8221;) promptly after the SEC declares effective the February 2021 Registration
Statement (as defined below).</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The February 2021 Debentures are due
12 months from their respective issuance dates and are secured by all of the Company&#8217;s assets and the assets of each of its
subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company&#8217;s subsidiaries,
and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which
is $0.03 per share, subject to adjustment (the &#8220;February 2021 Fixed Conversion Price&#8221;), or (ii) 80% of the lowest daily
volume weighted average price (&#8220;VWAP&#8221;) of our Common Stock during the 15 trading days immediately preceding the conversion
date, subject to adjustment (the &#8220;February 2021 Market Conversion Price&#8221;). The February 2021 Debentures contain an
adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any
stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events
will also result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject
to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures
that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares
of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable
upon conversion of the February 2021 Debentures or exercise of the February 2021 Warrant that had not then been converted or exercised,
respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221; to 9.99% upon at least 65 days&#8217;
prior written notice to the Company. The February 2021 Debentures accrue interest at an annual rate equal to 8% and are due and
payable on their respective maturity dates (or sooner if the Selling Stockholder converts the February 2021 Debentures or otherwise
accelerates the maturity date, as provided for in the February 2021 Debentures). Interest is payable either in cash or, if certain
Equity Conditions (as defined in the February 2021 Debentures) are then satisfied, in shares of the Common Stock at the February
2021 Market Conversion Price on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">At the Company&#8217;s option, it has
the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP
of the Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity
Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest
thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption
Premium&#8221;). The Company must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption,
setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
The February 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price
if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the February 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the February 2021 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
Pursuant to the February 2021 SPA, the purchase price for the First February 2021 Debenture was $900,000, less $41,000 for origination
fees, which consisted of the &#8220;original issue discount&#8221; of $36,000 and $5,000 as a structuring fee. Pursuant to the
February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $600,000, less $24,000 as an &#8220;original
issue discount.&#8221;</p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the February 2021
Private Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the
Common Stock. The February 2021 Warrant has a six-year term and is immediately exercisable at an exercise price of $0.03 per share,
subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of
the February 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder
may exercise the February 2021 Warrant on a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event of default
under the February 2021 SPA or the February 2021 Debentures.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The February 2021 Warrant contains an
adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common
Stock or common stock equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock
splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will
also result in an adjustment of the exercise price of the February 2021 Warrant.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The February 2021 Warrant is subject
to an &#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant
that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares
of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable
upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised or converted,
respectively). The Selling Stockholder can increase that 4.99% &#8220;exercise blocker&#8221; to 9.99% upon at least 65 days&#8217;
prior written notice to the Company.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the terms of the February
2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1
(the &#8220;February 2021 Registration Statement&#8221;) with the SEC registering for resale the February 2021 Conversion Shares
and the February 2021 Warrant Shares within 30 calendar days following the closing of the February 2021 Private Placement. The
Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to
file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the February 2021
Registration Statement. Further, the Company agreed to use its best efforts to have the February 2021 Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following
the date on which the Company is notified that the February 2021 Registration Statement will not be reviewed or is no longer subject
to further review and comments. Pursuant to the February 2021 Registration Rights Agreement, the Company is subject to partial
liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the February 2021 SPA for either
of the February 2021 Debentures then held by the holder for failure to file the February 2021 Registration Statement timely, failure
to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading
days after the date the Company is notified that the February 2021 Registration Statement will not be reviewed or is not subject
to further review, the February 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness,
the February 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are
not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate
of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed
that the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration
Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also
agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred
by the Company in connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares
held by the Selling Stockholder.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the February 2021 SPA, the
purchase price for the First February 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $36,000 and $5,000 as a structuring fee. At September 30, 2021, the principal balance of the First 2021
Debenture is $900,000.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 5, 2021, the Company and YA II
PN, LTD entered into a Limited Amendment Agreement dated as of May 5, 2021, by and between Kona Gold Beverage, Inc., a Delaware
corporation (the &#8220;Company&#8221;), and YA II PN, LTD., a Cayman Islands exempt company (&#8220;Investor&#8221;). The Company
and the Investor agree to a partial Second Closing, whereby the Investor will purchase a portion of the intended Second Convertible
Debenture (the &#8220;Partial Second Convertible Debenture&#8221;) in the face amount of $200,000 for a purchase price of $192,000
(the &#8220;Partial Second Convertible Debenture Purchase Price&#8221;) within 1 business day following the date hereof. The Investor
and the Company entered into a Securities Purchase Agreement (the &#8220;Securities Purchase Agreement&#8221;), Registration Rights
Agreement (the &#8220;Registration Rights Agreement&#8221;) and related Transaction Documents (as this term is defined in the Securities
Purchase Agreement) dated February 10, 2021, the date thereof, pursuant to which the Investor agreed to purchase secured Convertible
Debentures (individually referred to as the &#8220;First Convertible Debenture&#8221; and the &#8220;Second Convertible Debenture&#8221;)
upon various conditions precedent as articulated in Section 8(a) and (b) of the Securities Purchase Agreement and in the Transaction
Documents, see above Note 9 &#8211; Securities Purchase Agreement, Derivative Liabilities, And Warrant.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the February 2021 SPA, the
purchase price for the Second February 2021 Debenture was $600,000, less $200,000 for the &#8220;Partial Second Convertible Debenture&#8221;,
dated May 5, 2021, less for origination fees, which consisted of the &#8220;original issue discount&#8221; of $16,000. On June
9, 2021, the Company converted $200,000 of the principal of, and $1,578 of accrued interest on the Second 2021 Debenture into 6,719,269
shares of the Company&#8217;s common stock see Note 11, <i>equity transactions</i>. At September 30, 2021, no balance remains on
the principal balance of the Second February 2021 Debenture.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>August 2021 Securities Purchase Agreement</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2021, the Company completed a private
placement transaction (the &#8220;August 2021 Private Placement&#8221;) of two secured convertible debentures (the &#8220;August
2021 Debentures&#8221;), convertible for up to 1,111,111,110 shares (the &#8220;August 2021 Conversion Shares&#8221;) of Common
Stock and granted a Warrant to purchase Common Stock (the &#8220;August 2021 Warrant&#8221;), exercisable for up to 100,000,000
shares of Common Stock (the &#8220;August 2021 Warrant Shares&#8221;), pursuant to that certain Securities Purchase Agreement between
the Selling stockholder and the Company, dated as of August 10, 2021 (the &#8220;August 2021 SPA&#8221;). The Company sold and
issued the initial August 2021 Debenture (the &#8220;First August 2021 Debenture&#8221;) and granted the August 2021 Warrant promptly
after entering in the August 2021 SPA. The Company will sell and issue the second August 2021 Debenture (the &#8220;Second August
2021 Debenture&#8221;) promptly after the SEC declares effective the August 2021 Registration Statement (as defined below).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
The August 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company&#8217;s
assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder,
the Company&#8217;s subsidiaries, and the Company. Initially, the August 2021 Debentures are convertible at the lower of (i) the
fixed conversion price, which is $0.03 per share, subject to adjustment (the &#8220;August 2021 Fixed Conversion Price&#8221;),
or (ii) 75% of the lowest daily volume weighted average price (&#8220;VWAP&#8221;) of our Common Stock during the 15 trading days
immediately preceding the conversion date, subject to adjustment (the &#8220;August 2021 Market Conversion Price&#8221;). The
August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the
Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The
August 2021 Debentures are subject to a &#8220;conversion blocker&#8221; such that the Selling Stockholder cannot convert any
portion of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99%
of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination,
shares of the Common Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that
had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% &#8220;conversion blocker&#8221;
to 9.99% upon at least 65 days&#8217; prior written notice to the Company. The August 2021 Debentures accrue interest at an annual
rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the
August 2021 Debentures or otherwise accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is
payable either in cash or, if certain Equity Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares
of the Common Stock at the August 2021 Market Conversion Price on the trading day immediately prior to the date paid.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At the Company&#8217;s option, it has the right
to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder&#8217;s receipt of the redemption notice, (i) the VWAP of the Common
Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure.
The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well
as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the &#8220;Redemption Premium&#8221;).
The Company must provide the holder 15 business days&#8217; advance notice of its intent to make a redemption, setting forth the
amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if
the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the August 2021 SPA, the purchase
price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $60,000 and $10,000 as a structuring fee. Pursuant to the August 2021 SPA, the purchase price for the
Second August 2021 Debenture will be $1,500,000, less $10,000 as an &#8220;original issue discount.&#8221;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
In connection with the August 2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate
of 100 million shares of the Common Stock. The August 2021 Warrant has a three-year term and is immediately exercisable at an
exercise price of $0.03 per share, subject to adjustment. If the Company fails to maintain an effective registration statement
with the SEC covering the resale of the August 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred
and is continuing, then the holder may exercise the August 2021 Warrant on a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221;
means an event of default under the August 2021 SPA or the August 2021 Debentures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;<br />
The August 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the
Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of
the August 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock
dividends, and similar events will also result in an adjustment of the exercise price of the August 2021 Warrant.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;<br />
The August 2021 Warrant is subject to an &#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise any
portion of the August 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of
the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination,
shares of the Common Stock issuable upon exercise of the August 2021 Warrant or conversion of the August 2021 Debentures that
had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% &#8220;exercise blocker&#8221;
to 9.99% upon at least 65 days&#8217; prior written notice to the Company.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the terms of the August 2021 Registration
Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the &#8220;August
2021 Registration Statement&#8221;) with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant
Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to
waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K
for its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the
Company agreed to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company
is notified that the August 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments.
Pursuant to the August 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of
the aggregate purchase price paid by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held
by the holder for failure to file the August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration
in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified
that the August 2021 Registration Statement will not be reviewed or is not subject to further review, the August 2021 Registration
Statement is not declared effective by the effectiveness deadline, if after effectiveness, the August 2021 Registration Statement
ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus
therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month
period, or if after the six-month anniversary of the August 2021 Registration Rights Agreement, the Company does not have available
adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages
payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights Agreement is 24% of the aggregate purchase
price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among other things, to indemnify the Selling
Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration
of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the August 2021 SPA, the purchase
price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination fees, which consisted of the &#8220;original
issue discount&#8221; of $60,000 and $10,000 as a structuring fee. At September 30, 2021, the principal balance of the First August
2021 Debenture is $1,500,000.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Derivative Liability</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The 2020, 2021 Debentures, and 2021-2
Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of the
First 2020 Debenture. The estimated fair value of the 2020 Debentures has been calculated using the Black-Scholes fair value option-pricing
model with key input variables provided by management, as of the date of issuance, with the valuation offset against additional
paid in capital, and at each reporting date, with changes in fair value recorded as gains or losses on revaluation in other income
(expense). The Company identified embedded features in the 2020, 2021 and 2021-2 Debentures, which caused the 2020, 2021 and 2021-2
Debentures to be classified as a liability. These embedded features included the right for the holder to request for the Company
to settle the amounts owed pursuant to the 2020, 2021 and 2021-2 Debentures to the holder by paying an amount of cash equal to
the Black-Scholes value of the remaining unexercised portion of the 2020, 2021 and 2021-2 Debentures on the date of the consummation
of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the
whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument
and to adjust the fair value of the instrument as of each subsequent balance sheet date.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The derivative liabilities were valued
using Black-Scholes pricing model with the following average assumptions:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30,&#160;2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%">Stock Price</td><td style="width: 10%">&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Exercise Price</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">0.0124</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Volatility</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">87.69</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Dividend Yield</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk-Free Interest Rate</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">.08</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,225,741</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the changes
in the Company&#8217;s assets and liabilities measured at fair value as of September 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Quoted prices in Active Markets for Identical Assets (Level 1)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Significant Other Observable Inputs (Level 2)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Significant Unobservable Inputs<br /> (Level 3)</td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="3" style="text-align: center">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="width: 40%">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right">&#160;</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right">&#160;</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right">&#160;</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right">&#160;</td><td style="width: 1%; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth a summary
of change in fair value of the Company&#8217;s derivative liabilities for the year ended June 30, 2021:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Fair value, January 1, 2020</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">&#8212;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%; text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2020 debenture</td><td style="width: 10%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; width: 18%; text-align: right">148,628</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
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<tr style="vertical-align: bottom; background-color: White">
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font: 10pt/115% Times New Roman, Times, Serif">&#160;<b>Fair value, September 30, 2020</b></span></td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">217,806</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(69,051</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2020 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">212,397</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Fair value, December 31, 2020</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">361,152</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(202,443</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2021 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Fair value, March 31, 2021</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">627,018</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(307,585</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2021 debentures</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">166,088</td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Fair value, June 30, 2021</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">485,521</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Change in fair value of embedded conversion features of debenture included in earnings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(120,306</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Embedded conversion option liability recorded in connection with the issuance of 2021-2 debentures</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">860,526</td><td style="text-align: left">&#160;</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Fair value, September 30, 2021</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,225,741</td><td style="text-align: left">&#160;</td></tr>
</table>




<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Warrant</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company also granted the 2020 Warrant,
2021 Warrant and the 2021-2 Warrant to purchase up to an aggregate of 20 million shares, 50,000,000, and 100,000,000 of the Common
Stock, respectively. The 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively, has a three-year term and is immediately
exercisable at an exercise price of $0.05 per share, subject to adjustment. If the Company fails to maintain an effective registration
statement with the SEC covering the resale of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant Shares, or if an Event of Default
(as defined below) has occurred and is continuing, then the holder may exercise, respectively, the 2020 Warrant and the 2021 Warrant
on a &#8220;cashless&#8221; basis. &#8220;Event of Default&#8221; means an event of default under the 2020 SPA, 2021 SPA and the
2021-2 SPA or the 2020 Debentures, 2021 Debentures and the 2021-2 Debentures, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The 2020 Warrant, 2021 Warrant and the
2021-2 Warrant, respectively, contains an adjustment provision that, subject to certain exceptions, reduces the exercise price
if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price
of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively. Any stock splits, reverse stock splits, recapitalizations,
mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price
of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The 2020 Warrant, 2021 Warrant and the
2021-2 Warrant, respectively, is subject to an &#8220;exercise blocker&#8221; such that the Selling Stockholder cannot exercise
any portion, respectively, of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant would result in the Selling Stockholder and
its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding,
for purposes of such determination, shares of the Common Stock issuable, respectively, upon exercise of the 2020 Warrant, 2021
Warrant and the 2021-2 Warrant or conversion of the 2020 Debentures, 2021 Debentures and the 2021-2 Debentures, respectively, that
had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% &#8220;exercise blocker&#8221;
to 9.99% upon at least 65 days&#8217; prior written notice to the Company.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2020,
the Company granted the 2020 Warrant that was immediately exercisable for up to 20,000,000 shares of Common Stock. During the three
months ended June 30, 2021, the Company granted the 2021 Warrant that was immediately exercisable for up to 50,000,000 shares of
Common Stock. During the three months ended September 30, 2021, the Company granted the 2021-2 Warrant that was immediately exercisable
for up to 100,000,000 shares of Common Stock. The 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively, was fully expensed
as an interest expense related to the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant issued in connection with the consummation
of the transactions contemplated by the 2020 SPA, 2021 SPA and 2021-2 SPA, respectively, and no liability was recorded as of September
30, 2021 and December 31, 2020, respectively.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Cash Flows</i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In summary, our use of cash has been
as follows:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">For the Nine Months Ended September 30, 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 70%; text-align: left">Net cash used in operating activities</td><td style="width: 10%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,586,677</td><td style="width: 1%; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Net cash used in investing activities</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(1,427,106</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Net cash provided by financing activities</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">3,447.143</td><td style="text-align: left">&#160;</td></tr>
</table>


<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Operating Activities</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash provided by or used in operating
activities primarily consists of net income adjusted for certain non-cash items, including depreciation, amortization, stock-based
payments, interest expense related to the Warrant issued in the Private Placement, and the effect of changes in working capital
and other activities. Cash used in operating activities for the nine months ended September 30, 2021 was approximately $1.6 million
and consisted of a net loss of approximately $4.4 million, adjustments for non-cash items, including adjustments related to the
issuance of shares of our Common Stock for an acquisition, Common Stock issued for compensation, interest expense related to the
Warrant, and depreciation of approximately $2.1 million, and approximately $731,100 used in working capital and other activities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Investing Activities</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash used in investing activities for
the nine months ended September 30, 2021 was approximately $1.4 million and was attributable to capital expenditures of approximately,
$145,900, and goodwill of approximately $1.28 million, which was attributed to an acquisition.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Financing Activities</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash provided by financing activities
for nine months ended September 30, 2021 was approximately $3.5 million and was due to proceeds from convertible debt of approximately
$3.0 million, proceeds from note payable for an acquisition of approximately $590,400, proceeds from note payable for approximately
$34,800, changes from the PPP Loan of approximately $22,300, $217,000 was used to pay principal on a line of credit, and $13,000
was used to pay principal on a note payable.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Non-Cash Investing and Financing
Activities</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For the nine months ended September
30, 2021, there were no non-cash investing and financing activities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Off-Balance Sheet Arrangements</i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&#160;None.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Critical Accounting Policies</i></b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our discussion and analysis of results
of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and
related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related
to provisions for uncollectible accounts receivable, inventories, valuation of intangible assets, and contingencies and litigation.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accounting policies that we follow
are set forth in Note 2, <i>Summary of Significant Accounting Policies</i>, of our consolidated financial statements for the three
months ended September 30, 2021. These accounting policies conform to accounting principles generally accepted in the United States,
and have been consistently applied in the preparation of the consolidated financial statements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Leases</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2019, we adopted the Financial
Accounting Standards Board&#8217;s (&#8220;FASB&#8221;) Accounting Standards Update 2016-02, <i>Leases (Topic 842)</i> (&#8220;ASC
Topic 842&#8221;), which requires an entity to recognize a liability and corresponding asset for leases that meet certain criteria.
We applied ASC Topic 842 using the modified retrospective approach. Under this approach, we applied the new standards to all new
leases, and leases which have remaining obligations for financial statements issued for fiscal years beginning after December 15,
2018. We elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward
historical lease classification, and not reassess (i) whether a contract was or contained a lease, and (ii) initial direct costs
for any leases that existed prior to January 1, 2019. Under this method, we did not restate comparative periods in our financial
statements. We present right-of-use assets resulting from leases separately from other assets as noncurrent, and amortized accordingly.
The corresponding lease liabilities are presented separately from other liabilities on the accompanying balance sheets.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We recognize a right-of-use asset and
a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial
amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end
of the lease term or the end of the useful life of the asset.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The lease liability is initially measured
at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election
of the practical expedient. We have elected to use the risk-free rate.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Please refer to Note 15, <i>Lease Liabilities,
</i>to our consolidated financial statements for the nine months ended September 30, 2021 for additional information related to
our right-of-use assets and lease liabilities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Revenue Recognition and Deferred Revenue</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">We sell our
products, which includes our hemp energy drink, CBD energy water, CBD water, and logo apparel, to online customers or through resellers
and distributors. In evaluating the timing of the transfer of control of products to customers, we consider several indicators,
including significant risks and rewards of products, our right to payment, and the legal title of the products. We recognize revenue
from product sales to customers, distributors, and resellers when products that do not require further services by us are shipped,
when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made
to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to
shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling
are included in cost of products sold.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We also sell our products, and beverages
purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores, and smoke and gift shops.
In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant
risks and rewards of products, our right to payment, and the legal title of the products. We recognize revenue from product sales
to resellers when products that do not require further services by us are shipped or delivered, when there are no uncertainties
surrounding customer acceptance and when collectability is reasonably assured. Cash received by us prior to shipment is recorded
as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers
in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net
sales. Costs of shipping and handling are included in cost of products sold.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2019, we adopted ASU No.
2014-09, <i>Revenue from Contracts with Customers (Topic 606)</i> (&#8220;ASC Topic 606&#8221;). The underlying principle of ASC
Topic 606 is to recognize revenue to depict the transfer of goods or services to a customer at the amount expected to be collected.
The implementation of Topic ASC 606 had no impact on the prior period financial statements and no cumulative effect adjustment
was recognized.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">To apply these principles, ASC Topic
606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes:</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

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<tr style="vertical-align: top">
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<td style="padding: 0; width: 24px; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">1.</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Identifying
the contract(s) or agreement(s) with a customer;</span></td></tr>
<tr style="vertical-align: top">
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<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">2.</span></td>
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the separate performance obligations in the contract or agreement;</span></td></tr>
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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Determining
the transaction price;</span></td></tr>
<tr style="vertical-align: top">
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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Allocating
the transaction price to the separate performance obligations in the contract or agreement; and</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font-size: 10pt">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">5.</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Recognizing
revenue as each performance obligation is satisfied.</span></td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Topic 606, we recognize
revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control,
including the risks and rewards of ownership. With respect to us, performance is deemed to occur upon shipment or delivery of products
to our customers based on the written contract terms, which is also when control is transferred.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We evaluated the guidance in ASC 606-10-50-5
and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of our revenue
earned from our Beverages Segment and our Distribution Segment is recognized when we satisfy a single performance obligation by
transferring control of our products to a customer. We do not have significant financing components or payment terms, and we do
not have any material unsatisfied performance obligations. Our revenues are obtained in similar geographical locations within the
United States. Furthermore, the operations in each of our reporting segments are expected to have essentially the same future prospects,
similar gross margins, sales trends, and the nature of our products and customers are essentially the same. The sales from our
beverage product types are organized as one reportable segment, which we refer to as the Beverages Segment, and the sales of our
products and products that are purchased from resellers that are distributed by Gold Leaf is organized as our second reportable
segment, which we refer to as the Distribution Segment. We have also determined that disaggregated revenue by net sales by revenue
source would be meaningful and allow investors to understand our business activities, historical performance, or future prospects.
Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf
distribution sales. This is the same information used by our Chief Operating Decision Maker for evaluating the financial performance
of our operations and making resource decisions. We also sell merchandise and apparel that comprises approximately 1% of our gross
annual sales, and solely exists to promote our beverages. Therefore, our merchandise and apparel products are not a reportable
segment. Merchandise and apparel sales are included with the gross sales for our Beverages Segment.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Accounts Receivable and Allowance for Doubtful Account
Receivable</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are recorded at
net realizable value. We determine provisions for uncollectible accounts, sales returns, and claims based upon factors including
the credit risk and activity of specific distributors and resellers, historical trends, and other information. If we become aware
of a specific distributor&#8217;s or reseller&#8217;s inability to meet its financial obligations, bad debt charges are recorded
based on an overall assessment of past due accounts receivable outstanding. In the opinion of management, a provision was deemed
necessary for uncollectible accounts.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Inventory</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The cost of inventory using the standard
cost method, which approximates actual cost based on a first-in, first-out method. Our inventories are valued at the lower of cost
or net realizable value. Our inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD
energy waters, CBD waters, hemp energy drinks, cans for production, and merchandise and apparel. We periodically evaluate and adjust
inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of
all beverage inventory is two years, and as of September 30, 2021, we had approximately $866,600 of product in inventory, which
was an increase of approximately $206,100, compared to approximately $660,500 at December 31, 2020. We expect the balance of inventory
to increase in direct relation to the increase in sales that we expect. See Note 2, <i>Summary of Significant Accounting Policies</i>,
<i>Subsection F</i>, <i>Inventories,</i> of our consolidated financial statements for the nine months ended September 30, 2021,
for an additional description of our inventory that had a material effect on our consolidated financial statements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Goodwill and Intangible Assets</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill arises from business combinations
and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling
interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill
acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for
impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test
should be performed. We have selected December 31 as the date to perform the annual impairment test.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets represent both indefinite
lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested
annually for impairment.&#160;Intangible assets are reported on the balance sheet at cost less accumulated amortization. We have
selected December 31 as the date to perform the annual impairment test. See Note 2, <i>Summary of Significant Accounting Policies,
Subsection H, Goodwill and Intangible Assets, </i>of our consolidated financial statements for the nine months ended September
30, 2021, for an additional description of intangible assets that had a material effect on our consolidated financial statements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Stock-Based Compensation</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">FASB&#8217;s ASC Topic 718, Stock Compensation
(formerly, FASB Statement 123R), prescribes accounting and reporting standards for all stock-based payment transactions in which
employee and non-employee services are acquired. We measure the cost of employee and non-employee services received in exchange
for an award of equity instruments based on the grant-date fair value of the award. Fair value for restricted stock awards is valued
using the closing price of our Common Stock on the date of grant. For our nine months ended September 30, 2021, and 2020, we recognized
stock-based compensation expense of approximately $326,700, and $478,600, respectively. We had a balance in accrued stock-based
compensation at September 30, 2021 and December 31, 2020 of approximately $1.4 million, respectively. See Note 6, <i>Stock-Based
Compensation,</i> of our consolidated financial statements for the nine months ended September 30, 2021 for an additional description
of our stock-based compensation that had a material effect on our consolidated financial statements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Related Party Transactions</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 8, <i>Related Party Transactions,
</i>to our consolidated financial statements for the nine months ended September 30, 2021 for an additional description of related
party transactions that had a material effect on our consolidated financial statements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Emerging Growth Company Status</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 5, 2012, the JOBS Act, was
enacted. The JOBS Act provides that, among other things, an &#8220;emerging growth company&#8221; can take advantage of an extended
transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay
the adoption of some accounting standards until those standards would otherwise apply to private companies. As an emerging growth
company, we have irrevocably elected to take &#8220;opt out&#8221; of taking advantage of the extended transition period afforded
by the JOBS Act for the implementation of new or revised accounting standards and, as a result, we will comply with new or revised
accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies
on a case-by-case basis.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We intend to rely on certain of the
other exemptions and reduced reporting requirements provided by the JOBS Act. As an emerging growth company, we are not required
to, among other things, (i) provide an auditor&#8217;s attestation report on our system of internal controls over financial reporting
pursuant to Section 404(b), and (ii) comply with any requirement that may be adopted by the Public Company Accounting Oversight
Board regarding mandatory audit firm rotation or a supplement to the auditor&#8217;s report providing additional information about
the audit and the financial statements (auditor discussion and analysis).</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We will remain an emerging growth company
until the earlier to occur of (1) the last day of our fiscal year (a) following the fifth anniversary of the completion of the
December 31, 2020 offering, (b) in which we have total annual gross revenues of at least $1.07 billion, or (c) in which we are
deemed to be a &#8220;large accelerated filer&#8221; under the rules of the SEC, which means the market value of our common shares
that is held by non-affiliates exceeds $700 million as of the last day of our second quarter, and (2) the date on which we have
issued more than $1.0 billion in non-convertible debt during the prior three-year period.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We are also a &#8220;smaller reporting
company&#8221; meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds
to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most
recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market
value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during
the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If
we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions
from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company
we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K
and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive
compensation.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>Recently Issued Accounting Pronouncements</i></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 2, <i>Summary of Significant
Accounting Policies, Subsection S, Recently Issued Accounting Pronouncements,</i> to our consolidated financial statements for
the nine months ended September 30, 2021 for a discussion of recent accounting pronouncements.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span id="a_002"></span>ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As a Smaller Reporting Company, we are
not required to provide the information required by this Item.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span id="a_003"></span>ITEM 4. CONTROLS AND PROCEDURES</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Evaluation of Disclosure control
and Procedures</span>. We carried out an evaluation, under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal
financial officer concluded that, as of September 30, 2021, the period covered in this Report, our disclosure controls and procedures
were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934,
as amended, is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated
to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Changes in Internal Control Over
Financial Reporting</span>. There were no changes in the Company&#8217;s internal control over financial reporting during the quarter
ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company&#8217;s internal
control over financial reporting.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Inherent Limitations on the Effectiveness
of Controls</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of
the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective
control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due
to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can
also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the
controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections
of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because
of changes in conditions or deterioration in the degree of compliance with policies or procedures.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b><span id="a_004"></span>PART II &#8211; OTHER INFORMATION</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>ITEM 1.</b> <b><span id="a_005"></span>Legal Proceedings</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We know of no other material pending
legal proceedings to which we or any of our subsidiaries is a party or to which any of our assets or properties, or the assets
or properties of any of our subsidiaries, are subject and, to the best of our knowledge, no adverse legal activity is anticipated
or threatened. In addition, we do not know of any such proceedings contemplated by any governmental authorities.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We know of no material proceedings in
which any of our directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to us or any
of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>ITEM 1A.</b> <b><span id="a_006"></span>Risk Factors</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">We are a smaller
reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
under this item.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>ITEM 2.</b> <b><span id="a_007"></span>Unregistered Sales
of Equity Securities and Use of funds</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">None</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>




<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span id="a_008"></span>ITEM 3. Defaults Upon Senior Securities</b></p>




<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">None.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>ITEM 4.</b> <b><span id="a_009"></span>Mine Safety Disclosures</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">None.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>ITEM 5.</b> <b><span id="a_010"></span>Other Information</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">None.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span id="a_011"></span>ITEM 6. Exhibits</b></p>




<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following exhibits are filed with
or incorporated by reference into this Quarterly Report.</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="padding: 0; width: 10%; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.1</span></td>
<td style="padding: 0; width: 90%; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex3-1.htm">Amended and Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3.1 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.2</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex3-2.htm">Amended and Restated By-Laws is incorporated herein by reference to Exhibit 3.2 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.3</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex3-3.htm">Certificate of Designation of the Preferences, Rights, and Limitations of the Series B Preferred Stock is incorporated herein by reference to Exhibit 3.3 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.4</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex3-4.htm">Certificate of Designation of the Preferences, Rights, and Limitations of the Series C Preferred Stock is incorporated herein by reference to Exhibit 3.4 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.5</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex3-5.htm">Certificate of Designation of the Preferences, Rights, and Limitations of the Series D Preferred Stock is incorporated herein by reference to Exhibit 3.5 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">3.6</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220001088/e2173_ex3-6.htm">Certificate of Amendment to Amendment and Restated Certificate of Incorporation, is incorporated herein by reference to Exhibit 3.6 of Amendment No. 1 to the Company Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.1</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex4-1.htm">Form of Debenture is incorporated herein by reference to Exhibit 4.1 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.2</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex4-2.htm">Warrant is incorporated herein by reference to Exhibit 4.2 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.3</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220001278/e2281_ex4-3.htm">Form of Stand-alone Debenture is incorporated herein by reference to Exhibit 4.3 of the Company&#8217;s Registration Statement on Form S-1 (File No.333-239883), filed with the SEC on December 14, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.4</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex4-4.htm">Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., on February 11, 2021 is incorporated herein by reference to Exhibit 4.4 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.4a*</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="e3232_ex4-4a.htm">Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., on February 11, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.5</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex4-3.htm">Form of Warrant of the registrant granted to YAII PN, Ltd., on February 11, 2021 is incorporated herein by reference to Exhibit 4.3 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.6</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex4-6.htm">Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., effective August 23, 2021 is incorporated herein by reference to Exhibit 4.6 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">4.7</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex4-7.htm">Form of Warrant of the registrant granted to YAII PN, Ltd., effective August 23, 2021 is incorporated herein by reference to Exhibit 4.7 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">10.1</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-1.htm">Securities Purchase Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.1 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">10.2</span></td>
<td style="padding: 0; text-align: justify; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-2.htm">Registration Rights Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.2 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020</a>.</span></td></tr>
</table>

<p style="margin: 0">&#160;</p>

<p style="margin: 0"></p>

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<p style="margin: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%; width: 10%"><span style="font: 10pt Times New Roman, Times, Serif">10.3</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%; width: 90%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-3.htm">Independent Contractor Agreement by and between Kona Gold LLC and OPTN Companies Inc., dated April 15, 2020 is incorporated herein by reference to Exhibit 10.3 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020</a>.</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.4</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-4.htm">Board of Directors Offer Letter between the Company and Matthew Crystal, dated July 24, 2018 is incorporated herein by reference to Exhibit 10.4 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020</a>.</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.5</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-5.htm">Board of Directors Offer Letter between the Company and William Jeffrey Outlaw, dated September 3, 2019 is incorporated herein by reference to Exhibit 10.5 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.6</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-6.htm">Form of Distribution Agreement is incorporated herein by reference to Exhibit 10.6 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.7</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-7.htm">Membership Interest Purchase Agreement by and among Elev8 Hemp LLC, PLAD, Inc., and the Company, dated October 10, 2016, is incorporated herein by reference to Exhibit 10.7 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.8</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-8.htm">Securities Exchange and Settlement Agreement by and between Elev8 Brands, Inc., and the Company, dated March 6, 2018, is incorporated herein by reference to Exhibit 10.8 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.9</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-9.htm">Securities Exchange and Settlement Agreement by and between Elev8 Brands, Inc., and the Company, dated November 26, 2019 is incorporated herein by reference to Exhibit 10.9 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.10</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-10.htm">Employment Agreement by and between Christopher Selinger and the Company, dated September 1, 2018 is incorporated herein by reference to Exhibit 10.10 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.11</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-11.htm">Lease Agreement by and between Kona Gold, LLC and Hay Investment Properties, Inc., dated June 1, 2018 is incorporated herein by reference to Exhibit 10.11 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.12</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-12.htm">Triple Net Lease Agreement by and between Gold Leaf Distribution, LLC and 3090 S. Hwy 14, LLC, dated May 22, 2019 is incorporated herein by reference to Exhibit 10.12 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.13</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-13.htm">Lease Modification Agreement by and between Gold Leaf Distribution, LLC and 3090 S. Hwy 14, LLC, dated April 21, 2020 is incorporated herein by reference to Exhibit 10.13 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.14</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-14.htm">Line of Credit Agreement by and between Robert Clark and Gold Leaf Distribution, LLC, dated August 29, 2019 is incorporated herein by reference to Exhibit 10.14 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.15</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-15.htm">Line of Credit Agreement by and between Robert Clark and Kona Gold, LLC, dated April 4, 2019 is incorporated herein by reference to Exhibit 10.15 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.16</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-16.htm">Line of Credit Agreement by and between Matthew Nicoletti and Kona Gold, LLC, dated May 5, 2018 is incorporated herein by reference to Exhibit 10.16 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.17</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-17.htm">Standard Promissory Note issued by Gold Leaf Distribution in favor of Robert Clark, dated February 19, 2019 is incorporated herein by reference to Exhibit 10.17 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.18</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220001088/e2173_ex10-18.htm">Standard Promissory Note issued by Kona Gold, LLC in favor of Robert Clark, dated January 15, 2019 is incorporated herein by reference to Exhibit 10.18 of Amendment No. 1 to the Company Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.</a></span></td></tr>
</table>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%; width: 10%"><span style="font: 10pt Times New Roman, Times, Serif">10.19</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%; width: 90%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-19.htm">Employment Agreement by and between the Company and Robert Clark, dated August 12, 2015 is incorporated herein by reference to Exhibit 10.19 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.20</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-20.htm">Employment Agreement by and between the Company and Lori Radcliffe, dated October 8, 2019 is incorporated herein by reference to Exhibit 10.20 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.20a</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001536/e3099_ex10-20a.htm">Employment Agreement Amendment by and between the Company and Lori Radcliffe, dated September 14, 2021, is incorporated herein by reference to Exhibit 10.20a of the Company&#8217;s Registration Statement on Form S-1, filed with the SEC on September 22, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.21</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-21.htm">Amendment to Employment Agreement by and between the Company and Robert Clark, dated December 1, 2016 is incorporated herein by reference to Exhibit 10.21 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.22</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-22.htm">Agreement by and between the Company and Ryan Dodd, dated May 1, 2019 is incorporated herein by reference to Exhibit 10.22 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.23</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-23.htm">Amendment to Employment Agreement by and between Christopher Selinger and Kona Gold Solutions, Inc., dated May 1, 2020 is incorporated herein by reference to Exhibit 10.23of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.24</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-24.htm">Amendment to Employment Agreement by and between Christopher Selinger and the Company, dated January 1, 2019 is incorporated herein by reference to Exhibit 10.24 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.25</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-25.htm">Security Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.25 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.26</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-26.htm">Line of Credit and Security Agreement Modification Agreement by and between Kona Gold LLC and Robert Clark, dated April 1, 2020 is incorporated herein by reference to Exhibit 10.26 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020</a>.</span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.27</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220000735/e2010_ex10-27.htm">Line of Credit and Security Agreement Modification Agreement by and between Gold Leaf Distribution LLC and Robert Clark, dated April 1, 2020 is incorporated herein by reference to Exhibit 10.27 of the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.28</span></td>
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<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.29</span></td>
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<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.30</span></td>
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</table>

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<tr style="vertical-align: top">
<td style="width: 10%; padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.31</span></td>
<td style="width: 90%; padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220001088/e2173_ex10-31.htm">Paycheck Protection Promissory Note issued in favor of Wells Fargo Bank, N.A. dated May 4, 2020, is incorporated herein by reference to Exhibit 10.31 of Amendment No. 1 to the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.32</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112220001278/e2281_ex10-32.htm">Securities Purchase Agreement by and between the Company and YAII PN, Ltd., dated November 30, 2020, is incorporated herein by reference to Exhibit 10.32 to the Company&#8217;s Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on December 14, 2020.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.33</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex10-28.htm">Form of Securities Purchase Agreement between the registrant and YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.28 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.34</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex10-29.htm">Form of Registration Rights Agreement by and between the registrant and YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.29 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.35</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex10-30.htm">Form of Amended and Restated Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.30 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.36</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex10-31.htm">Form of Intellectual Property Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.31 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.37</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221000281/e2469_ex10-32.htm">Form of Amended and Restated Global Guaranty Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.32 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on February 18, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.38</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex10-38.htm">Form of Securities Purchase Agreement between the registrant and YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.38 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.39</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex10-39.htm">Form of Registration Rights Agreement by and between the registrant and YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.39 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.40</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex10-40.htm">Form of Second Amended and Restated Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.40 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.41</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex10-41.htm">Form of Intellectual Property Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.41 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.42</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif; color: windowtext"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001446/e3063_ex10-42.htm">Form of Second Amended and Restated Global Guaranty Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.42 of the Company&#8217;s Current Report on Form 8-K, filed with the SEC on August 23, 2021.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">10.43</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="http://www.sec.gov/Archives/edgar/data/1802546/000173112221001536/e3099_ex10-43.htm">Agreement of Lease by and between Gold Leaf Distribution, LLC and RFMD-SC, LLC, dated August 30, 2021, is incorporated herein by reference to Exhibit 10.43 of the Company&#8217;s Registration Statement on Form S-1, filed with the SEC on September 22, 2021.</a></span></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">31.1*</span></td>
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="e3232_ex31-1.htm">Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
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<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="e3232_ex31-2.htm">Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Rule 13a-14(a) of the Securities Act of 1934.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
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<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="e3232_ex32-1.htm">Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.</a></span></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="padding-right: 0.8pt; line-height: 115%">&#160;</td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 0.8pt; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif">32.2*</span></td>
<td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><span style="font: 10pt Times New Roman, Times, Serif"><a href="e3232_ex32-2.htm">Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.</a></span></td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>

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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">XBRL Taxonomy Extension Schema Document</span></td></tr>
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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
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<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Ex. 101.DEF*</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">XBRL Taxonomy Extension Definition Linkbase
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p>



<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>

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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b><span id="a_012"></span>SIGNATURES</b></p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b></b>&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.</p>

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<td style="padding: 0; width: 55%; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; width: 45%; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Kona
Gold Beverage, Inc.</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Dated:&#9;November
15, 2021</span></td>
<td style="border-bottom: Black 1pt solid; padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">/s/
Robert Clark</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">President and
Chief Executive Officer</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">(Principal Executive
Officer)</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Dated:&#9;November
15, 2021</span></td>
<td style="border-bottom: Black 1pt solid; padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">/s/
Lori Radcliffe</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">Chief Financial
Officer</span></td></tr>
<tr style="vertical-align: top">
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></td>
<td style="padding: 0; line-height: 115%; text-indent: 0"><span style="font: 10pt Times New Roman, Times, Serif">(Principal Financial
Officer)</span></td></tr>
</table>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 0pt">73</p>

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{"company-data": {"conformed-name": "KONA GOLD BEVERAGE, INC.", "cik": "0001802546", "assigned-sic": "2080", "irs-number": "815175120", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-56230", "film-number": "211409714"}, "business-address": {"street1": "746 NORTH DRIVE", "street2": "SUITE A", "city": "MELBOURNE", "state": "FL", "zip": "32934", "phone": "8447142224"}, "mail-address": {"street1": "746 NORTH DRIVE", "street2": "SUITE A", "city": "MELBOURNE", "state": "FL", "zip": "32934"}, "former-company": [{"former-conformed-name": "KONA GOLD SOLUTIONS, INC.", "date-changed": "20200714"}, {"former-conformed-name": "Kona Gold Solutions", "date-changed": "20200206"}]}
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Ma
rk
One)
☒
QUARTERLY
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
September 30, 2021
☐
TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____________ to _______________
Commission
File Number
000-56230
Kona Gold Beverage, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
81-5175120
(State
    or other jurisdiction of incorporation or organization)
(IRS
    Employer Identification No.)
746 North Drive
,
Suite A
Melbourne
Florida
32934
(Address
    of principal executive offices)
(Zip
    Code)
(
844
)
714-2224
(Registrant's
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
    of each class
Trading
    Symbol(s)
Name
    of each exchange on which registered
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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
☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Yes
☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large
    accelerated filer
☐
Accelerated
    filer
☐
Non-accelerated filer
☐
Smaller
    reporting company
☒
Emerging
    growth company
☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
☒
The
number of shares of the issuer's common stock, par value $0.00001 per share, outstanding as of November 15, 2021 was
960,236,003
.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
Page
PART I
FINANCIAL INFORMATION
F-1
Item 1.
Financial Statements
F-
1
Unaudited Consolidated Balance Sheet as of September 30, 2021 and audited Balance sheet as of December 31, 2020
F-
1
Unaudited Consolidated Statements of Loss for the three months and nine months ending September 30, 2021 and 2020
F-
2
Unaudited Consolidated Statements of Stockholders' Deficit for the nine months ended September 30, 2021 and 2020
F-
3
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020
F-
4
Notes to the Unaudited Consolidated Financial Statements (Unaudited)
F-
5
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
45
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
67
Item 4.
Controls and Procedures
67
PART II
OTHER INFORMATION
68
Item 1.
Legal Proceedings
68
Item 1A.
Risk Factors
68
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
68
Item 3.
Defaults upon Senior Securities
68
Item 4.
Mine Safety Disclosures
68
Item 5.
Other Information
68
Item 6.
Exhibits
69
SIGNATURES
73
PART I - FINANCIAL
INFORMATION
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Financial Statements of Kona Gold Beverage, Inc. (formerly known as Kona Gold Solutions, Inc.)
Unaudited Consolidated Balance Sheet as of September 30, 2021 and audited Balance sheet as of December 31, 2020
F-1
Unaudited Consolidated Statements of Loss for the three months and nine months ending September 30, 2021 and 2020
F-2
Unaudited Consolidated Statements of Stockholders' Deficit for the nine months ended September 30, 2021 and 2020
F-
3
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020
F-4
Notes to the Consolidated Financial Statements
F-5
Unaudited
Audited
Nine
    Months Ended
Year
    Ended
September
    30,
December
    31,
ASSETS
2021
2020
CURRENT
    ASSETS
Cash
    and cash equivalents
$
546,528
$
113,168
Accounts
    receivable, net of allowance for doubtful accounts of $
7,709
and $
3,967
, respectively
63,715
—
Other
    receivables
14,876
14,876
Inventory
866,613
660,504
Prepaids
62,200
—
Other
    current assets
6,517
5,572
Total
    current assets
1,560,449
794,120
NON-CURRENT
    ASSETS
Property,
    plant and equipment, net
281,029
167,872
Right-of-use
    asset, net
1,219,103
912,993
Intangible
    property, net
74,744
69,488
Goodwill
1,275,938
—
Note
    receivable, net of allowance $
1,500,000
and $
0
, respectively
—
—
Deposit
12,750
6,500
Total
    non-current assets
2,863,564
1,156,853
Total
    assets
$
4,424,013
$
1,950,973
LIABILITIES
    AND STOCKHOLDERS' DEFICIT
CURRENT
    LIABILITIES
Accounts
    payable
$
206,123
$
208,599
Amounts
    owed to customers
—
10,508
Credit
    card payables
4,009
19,469
Current
    note payable
1,994
—
Current
    note payable - related party
1,500
12,000
Current
    lease liability
41,806
149,407
Convertible
    debt
2,400,000
900,000.00
Derivative
    liability
1,225,741
361,152.00
Accrued
    compensation
389,583
257,500.00
Accrued
    stock compensation
1,386,497
1,386,497
Accrued
    liabilities
183,757
81,624
Total
    current liabilities
5,841,010
3,386,756
NON-CURRENT
    LIABILITIES
Line
    of credit
198,470
398,470
Line
    of credit - related party
1,478,151
1,495,151
Note
    payable - related party, net of current
53,500
56,000
Note
    payable - acquisition
590,418
—
Note
    payable
32,769
—
PPP
    note payable
117,487
95,161
Lease
    liability, net of current
1,177,297
763,586
Total
    liabillities
9,489,102
6,195,124
COMMITMENTS
    AND CONTINGENCIES (NOTE 13)
STOCKHOLDERS'
    DEFICIT
Preferred
    Stock Series A, $
.00001
par value,
0
shares authorized,
0
issued, and outstanding, respectively
—
—
Preferred
    Stock Series B, $
.00001
par value,
1,200,000
shares authorized,
488,000
issued and outstanding, respectively
5
5
Preferred
Stock Series C, $
.00001
par value,
250
shares authorized,
0
and
140
issued, and outstanding, respectively
—
—
Preferred
    Stock Series D, $
.00001
par value,
500,000
shares authorized,
500,000
issued, and outstanding, respectively
5
5
Common
    Stock, $
.00001
par value,
2,500,000,000
authorized,
883,068,249
, and
786,308,041
, issued and outstanding, respectively
8,831
7,863
Additional
    paid-in capital - warrants
2,027,691
281,565
Additional
    paid-in capital
6,601,818
4,746,447
Accumulated
    deficit
(
13,703,438
)
(
9,280,036
)
Total
    stockholders' deficit
(
5,065,089
)
(
4,244,151
)
Total
    liabilities and stockholders' deficit
$
4,424,013
$
1,950,973
F-
1
THREE
    MONTHS ENDED
NINE
    MONTHS ENDED
September
    30,
September
    30,
2021
2020
2021
2020
REVENUES,
    NET OF SALES, RETURNS, AND ALLOWANCES OF $
16,599
AND $
6,600
; and $
61,041
AND $
30,655
, RESPECTIVELY
$
545,375
$
312,709
$
1,798,999
$
741,812
COST
    OF REVENUES
442,766
222,111
1,443,727
523,774
Gross
    profit
102,609
90,598
355,272
218,038
OPERATING
    EXPENSES
Selling,
    general and administrative expenses
756,110
500,233
1,968,841
1,840,004
Income
    (Loss) from operations
(
653,501
)
(
409,635
)
(
1,613,569
)
(
1,621,966
)
Other
    income / (expense)
Interest
    expense
(
17,149
)
(
20,628
)
(
52,091
)
(
38,246
)
Interest
    expense related to loan origination fee on convertible note
(
70,000
)
(
10,000
)
(
135,000
)
(
25,000
)
Interest
    expense related to warrants on convertible note
(
693,555
)
—
(
1,746,125
)
(
281,565
)
Interest
    expense on convertible note
(
36,767
)
—
(
80,121
)
—
Gain/(Loss)
    on derivative
(
740,220
)
(
69,178
)
(
864,589
)
(
217,806
)
Tax
    expense
(
19,523
)
—
(
27,065
)
—
Gain
    on the extinquishment of debt
—
—
95,161
—
EIDL
    advance
—
—
—
7,000
Other
    income
—
—
—
6,291
Net
    Income (Loss)
$
(
2,230,715
)
$
(
509,441
)
$
(
4,423,399
)
$
(
2,171,292
)
WEIGHTED
    AVERAGE NUMBER OF COMMON SHARES:
Basic
    and diluted
829,027,793
771,268,436
829,027,793
771,268,436
NET
    LOSS PER COMMON SHARES:
Basic
    and diluted
$
(
0.00
)
$
(
0.00
)
$
(
0.01
)
$
(
0.00
)
F-
2
Common Stock
Preferred Stock
Additional
Total
$.00001 Par
$.00001 Par
Paid
Accumulated
Stockholders'
Shares
Amount
Shares
Amount
in Capital
Deficit
Deficit
Balance December 31, 2019
763,967,603
$
7,640
4,988,000
$
50
$
4,155,777
$
(
6,154,441
)
$
(
1,990,976
)
Common Stock Issued for Compensation
5,000,000
50
318,450
318,500
Net Income (loss)
—
(
475,644
)
(
475,644
)
Balance March 31, 2020
768,967,603
$
7,690
4,988,000
$
50
4,474,227
$
(
6,630,085
)
$
(
2,148,120
)
Common Stock Issued for Sponsorship Agreements
85,000
1
2,577
2,578
Common Stock Issued for Compensation
5,000,000
50
157,450
157,500
Warrants related to convertible note
281,565
281,565
Net Income (loss)
—
(
1,066,920
)
(
1,066,920
)
Balance June 30, 2020
774,052,603
$
7,741
4,988,000
$
50
$
4,915,819
$
(
7,697,005
)
$
(
2,773,397
)
Common Stock Conversion to Preferred Stock
(
140
)
(
0
)
140
0.00
—
Preferred Stock Conversion to Common Stock
4,000,000
40
(
4,000,000
)
(
40.00
)
—
—
Accrued Common Stock Issues for Compensation
140
0
2
2
Net Income (loss)
—
(
509,441
)
(
509,441
)
Balance September 30, 2020
778,052,603
$
7,781
988,140
$
10
$
4,915,821
$
(
8,206,446
)
$
(
3,282,836
)
Common Stock Issued for Conversion of Convertible Debt
8,255,438
83
112,191
112,274
Net Income (loss)
—
(
1,073,590
)
(
1,073,590
)
Balance December 31, 2020
786,308,041
$
7,863
988,140
$
10
$
5,028,012
$
(
9,280,036
)
$
(
4,244,153
)
Common Stock Issued for Conversion of Convertible Debt
30,418,798
304
613,505
613,809
Common Stock Issued for Acquisition
9,000,000
90
270,810
270,900
Warrants related to convertible note
1,052,571
1,052,571
Net Income (loss)
—
(
1,819,503
)
(
1,819,503
)
Balance March 31, 2021
825,726,839
$
8,257
988,140
$
10
$
6,964,898
$
(
11,099,539
)
$
(
4,126,375
)
Common Stock Issued for Conversion of Convertible Debt
25,045,798
250
508,924
509,174
Net Income (loss)
—
(
373,181
)
(
373,181
)
Balance June 30, 2021
850,772,637
$
8,508
988,140
$
10
$
7,473,822
$
(
11,472,720
)
$
(
3,990,381
)
Common Stock Issued for Conversion of Convertible Debt
29,195,472
292
406,360
406,652
Common Stock Issued for Compensation
3,100,000
31
55,769
55,800
Warrants related to convertible note
693,555
693,555
Preferred Stock Conversion to Common Stock
140
0
140
0.00
3
(
3
)
3
Net Income (loss)
—
(
2,230,715
)
(
2,230,715
)
Balance September 30, 2021
883,068,249
$
8,831
988,280
$
10.00
$
8,629,509
$
(
13,703,438
)
$
(
5,065,086
)
F-
3
2021
2020
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss
$
(
4,423,399
)
$
(
2,171,292
)
Adjustments to reconcile net income to net cash  provided by operations:
Depreciation and Amortization
32,755
24,778
Common Stock Issued in Exchange for Services
—
—
Common Stock Issued in Acquisition
270,900
—
Common Stock Issued for Sponsorship
—
2,578
Common Stock Issued for Compensation
55,800
476,002
Interest expense related to warrants on convertible debt
1,746,126
281,565
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
(
74,223
)
20,620
Decrease (increase) in other receivable
—
—
Decrease (increase) in inventory
(
206,109
)
(
24,019
)
Decrease (increase) in prepaids
(
62,200
)
—
Decrease (increase) in intercompany transactions
—
—
Decrease (increase) in other current assets
(
945
)
(
3,897
)
Decrease (increase) in deposits
(
6,250
)
—
Decrease (increase) in right-of-use asset
(
306,110
)
(
306,006
)
Increase (decrease) in accounts payable
(
2,476
)
74,304
Increase (decrease) in credit card payable
(
15,461
)
8,116
Increase (decrease) in accrued compensation
132,083
196,042
Increase (decrease) in accrued stock compensation
—
(
4
)
Increase (decrease) in accrued expenses
102,133
37,666
Increase (decrease) in derivative liability
864,589
217,806
Increase (decrease) in lease liability
306,110
287,140
Net cash provided by (used in) operating activities
(
1,586,677
)
(
878,601
)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(
145,912
)
(
54,134
)
Changes in goodwill
(
1,275,938
)
—
Changes in intellectual property
(
5,256
)
6,132
Net cash provided by (used in) investing activities
(
1,427,106
)
(
48,002
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Changes in note payable - related party
(
13,000
)
(
9,000
)
Changes in line of credit - related party
(
217,000
)
325,500
Changes in note payable - acquisition
590,418
—
Changes in note payable
34,763
Changes line of credit
—
—
Changes in convertible debt
3,029,636
500,000
Changes in PPP note payable
22,326
95,161
Net cash provided by (used in) financing activities
3,447,143
911,661
Net cash increase for period
433,360
(
14,942
)
Cash at beginning of period
113,168
36,223
Cash at end of period
$
546,528
$
21,281
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes
$
27,065
$
—
Cash paid for interest
$
52,091
$
38,246
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Preferred Stock Conversion to Common Shares
$
3
$
—
F-
4
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 –
ORGANIZATION AND DESCRIPTION OF BUSINESS
Kona Gold Beverage, Inc., a
Delaware corporation ("Kona Gold," the "Company," "we," "us," or "our"),
owns and operates a line of premier CBD lifestyle brand and other products. As of September 30, 2021 the Company has four wholly-owned
subsidiaries: Kona Gold LLC, a Delaware limited liability company ("Kona"), HighDrate LLC, a Florida limited liability
company ("HighDrate"), Gold Leaf Distribution LLC, a Florida limited liability company ("Gold Leaf"), and
S and S Beverage, Inc. ("S and S"), a Wisconsin corporation, which the Company acquired in February 2021. The Company
is primarily focused on product development in the functional beverage sector. Kona Gold creates hemp-infused energy drinks, which
includes hemp energy drinks, CBD energy water, and also sells Kona Gold merchandise and apparel, which promotes the Company's
beverages. HighDrate focuses on the development and marketing of CBD-infused energy waters geared towards the fitness and wellness
markets. S and S creates and sells unique lemon flavored drinks under the "Ooh La Lemin" brand name. Gold Leaf focuses
on the distribution of premium beverages and snacks in key markets.
The Company currently sells
its products through resellers, the Company's websites, and distributors that span across 27  states. The Company's
products are available in wide variety of stores, including grocery stores, convenience stores, smoke shops, and gift shops.
As used herein, the terms "Kona
Gold," the "Company," "we," "us," or "our, refer to Kona Gold individually or,
as the context requires, collectively with its subsidiaries on a consolidated basis.
The Company's Business
The Company has two reportable
segments:
●
Beverages.
Includes three types of beverage products: (i) hemp-infused energy drinks, (ii) CBD-infused energy water, (iii) CBD-infused high-alkaline water, (iv) lemon flavored beverages, as well as apparel with the Kona Gold logo. The Beverages Segment includes all of Kona, HighDrate, Ooh La Lemin, and operations. Additional information regarding these products is below. The Company considers this a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying Consolidated Financial Statements present financial information in a format that is consistent with the internal financial information used by management. The Company does not accumulate revenues by product classification and, therefore, it is impractical to present such information.
●
Distribution.
Includes the distribution of premium beverages and snacks in key markets. These markets include over 900  accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. In addition to distributing the Company's own beverage products, the Company also distributes other products, including alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company's current product offerings. The Distribution Segment includes all of Gold Leaf's operations.
Beverage Products
The Company's hemp-infused
energy drink is available in both regular and sugar-free options. These energy drinks are infused with organic hemp protein powder
and contain essential vitamins and ingredients that give consumers a natural energy boost. Hemp protein contains no gluten and
is compatible with a variety of diets, including vegan and Kosher. Our hemp energy drinks are available in eight flavors: classic
hemp, platinum hemp, sugar-free hemp, cherry vanilla, bubble gum, candy apple, cotton candy, and pink grapefruit.
F-
5
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
HighDrate's CBD-infused
energy water is great tasting, sugar-free, and powered by the patented technology of Alkame Holdings Inc.'s wholly-owned
subsidiary, Alkame Water Inc. ("Alkame"), which uses its advanced water treatment to create a premium oxygenated alkaline
water with natural antioxidants. Alkame believes that, pursuant to a double-blind placebo, peer-backed research project that it
conducted, its Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices
in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets technology
can boost the immune system and physical performance. HighDrate's CBD-infused energy water contains 80 mg of caffeine and
10 mg of CBD. The Company believes that CBD aids the body's endocannabinoid system in neuroprotection, stress recovery, immune
balance, and homeostatic regulation. HighDrate's CBD-infused energy water is available in six flavors: watermelon, kiwi strawberry,
tropical coconut, Georgia peach, sour apple, and blue island punch.
The Company's product
"Storm" is a high-alkaline CBD-infused water. This water is also powered by Alkame's patented technology, which
uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Storm high-alkaline
CBD water contains 20 mg of CBD.
Ooh La Lemin is lemonade for
the modern age. Made natural and refreshing with no added sugar, low in carbs, and 15 calories. Ooh La Lemin is available in four
distinct flavors: original lemonade, peach lemonade, strawberry lemonade, and blue raspberry lemonade.
The Company also sells branded
apparel. The Company uses only high-quality textiles and specialty inks and foils, which provide consumers with a premium fit and
feel. The Company currently offers shirts, tanks, hats, and towels for sale.
Effects of COVID-19
In January 2020, the World
Health Organization (the "WHO") announced a global health emergency because of a new strain of coronavirus ("COVID-19")
that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond
its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global
exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well
as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on the Company's consumer
demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread
of the outbreak and the impact on the Company's consumers and employees, all of which are uncertain and cannot be predicted.
Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations.
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
Basis of Presentation
The accompanying consolidated
financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany
transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared
on the accrual basis of accounting and in accordance with generally accepted accounting principles ("GAAP") in the
United States.
B.
Use of Estimates
The preparation of the consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates
also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from
those assumptions and estimates.
F-
6
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C.
Cash and Cash Equivalents
For the purpose of reporting
cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less
to be cash equivalents.
D.
Fair Value of Financial Instruments
The estimated fair values for
financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties
and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate
fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy,
which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established
for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs. The fair value hierarch is as follows:
Level 1 – quoted prices
in active markets for identical assets or liabilities;
Level 2 – inputs other
than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or
liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable
or an be corroborated by observable market data for substantially the full term of the assets or liabilities; or
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.
The Company analyzes all financial
instruments with features of both liabilities and equity under Accounting Standards Codification ("ASC") 480,
Distinguishing
Liabilities from Equity,
and ASC 815,
Derivatives and Hedging
("ASC 815"). Derivative liabilities are adjusted
to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations
as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted
for in arriving at the overall fair value of the financial instruments. In addition, the fair value of free-standing derivative
instruments such as warrant and option derivatives are valued using the Black-Scholes models.
The Company uses Level 2 inputs
for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes
option-pricing model based on various assumptions. The Company's derivative liabilities are adjusted to reflect fair value
at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair
value of derivatives.
E.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded
at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors
including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes
aware of a specific distributor's or reseller's inability to meet its financial obligations, bad debt charges are recorded
based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the nine
months ended September 30, 2021 and 2020, was approximately $
21,000
and $
41,600
respectively. These amounts are included in selling,
general and administrative expenses in the accompanying Consolidated Statements of Loss. Management will review annually to determine
provisions and record an allowance as deemed necessary. In the opinion of management, a provision was deemed necessary for uncollectible
accounts for Kona and no provision was deemed necessary for Gold Leaf. The allowances for Uncollectible Accounts at September 30,
2021 and December 31, 2020 were $
7,709
and $
3,967
, respectively, as reflected in the accompanying Consolidated Balance Sheets.
F-
7
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.
Inventories
The cost of inventory using
the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company's inventories
are valued at the lower cost or net realizable value. The Company's inventory consists almost entirely of finished and unfinished
goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, lemonades, cans for production, and merchandise
and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision
for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at March 31, 2021, and December
31, 2020, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets.
G.
Property, Plant and Equipment
Property, plant and equipment
are reported on the accompanying Consolidated Balance Sheet at cost less accumulated depreciation. Assets with a useful life greater
than one year and cost greater than $
100
are capitalized. Maintenance and repairs are charged to expense as incurred.
Depreciation is provided using
the straight-line method over the estimated useful lives of the asset as follows:
Estimated useful lives (in years)
Furniture and fixtures
7
Machinery and equipment
7
Vehicles
5
Computer equipment
5
–
7
H.
Goodwill and Intangible Assets
Goodwill arises from business
combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value
of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the
acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not
amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that
a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment
test.
Intangible assets represent
both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized,
and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization.
The Company has selected December 31 as the date to perform the annual impairment test.
Management determined that,
for the year ending December 31, 2020, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill
is zero. On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S
and the five S and S Legacy Shareholders and acquired all of the capital stock of S and S
.
Because
of this, goodwill was recorded in the amount of $
1,275,938
see Note 5,
Goodwill and Intangible Assets
. Management
determined that there was no impairment of trademarks for the year ending December 31, 2020, see Note 5,
Goodwill and Intangible
Assets
.
F-
8
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
I.
Leases
On January 1, 2019, the Company
adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") 2016-02,
Leases (Topic 842)
("ASC Topic 842"), which requires an entity to recognize a liability and corresponding asset
for leases that meet certain criteria. The Company applied ASC Topic 842 using the modified retrospective approach. Under this
approach, the Company applied the new standards to all new leases, and leases which have remaining obligations for financial statements
issued for fiscal years beginning after December 15, 2018. The Company elected the package of practical expedients permitted under
the transition guidance, which allowed the Company to carryforward historical lease classification, and not reassess (i) whether
a contract was or contained a lease, and (ii) initial direct costs for any leases that existed prior to January 1, 2019. Under
this method, the Company did not restate comparative periods in its financial statements. The Company presents right-of-use assets
resulting from leases separately from other assets as noncurrent, and amortized accordingly. The corresponding lease liabilities
are presented separately from other liabilities on the accompanying Consolidated Balance Sheet.
The Company recognizes a right-of-use
asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of
the end of the lease term or the end of the useful life of the asset.
The lease liability is initially
measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with
the election of the practical expedient. The Company has elected to use the risk-free rate.
J.
Revenue and Provision for Sales, Returns, and Allowances
The
Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to
online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers,
the Company considers several indicators, including significant risks and rewards of products, the Company's right to payment,
and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers
when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer
acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights
of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the
goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold.
The Company also sells its
products, and beverages purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores,
and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several
indicators, including significant risks and rewards of products, the Company's right to payment, and the legal title of the
products. The Company recognizes revenue from product sales to resellers when products that do not require further services by
the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is
reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers
under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and
handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included
in cost of products sold.
F-
9
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
On January 1, 2019, the Company
adopted ASU No. 2014-09,
Revenue from Contracts with Customers (Topic 606)
("ASC Topic 606"). The underlying
principle of ASC Topic 606 is to recognize revenue to depict the transfer of goods or services to a customer at the amount expected
to be collected. The implementation of Topic ASC 606 had no impact on the prior period financial statements and no cumulative effect
adjustment was recognized.
To apply these principles,
ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s),
which includes:
1.
Identifying the contract(s) or agreement(s) with a customer;
2.
Identifying the separate performance obligations in the contract or agreement;
3.
Determining the transaction price;
4.
Allocating the transaction price to the separate performance obligations in the contract or agreement; and
5.
Recognizing revenue as each performance obligation is satisfied.
Pursuant to ASC Topic 606,
the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically
upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed
to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control
is transferred.
The
Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues
that would be meaningful. The majority of the Company's revenue earned from its Beverages Segment and its Distribution Segment
is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company
does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations.
The Company's revenues are obtained in similar geographical locations within the United States. Furthermore, the Company's
operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins,
sales trends, and the nature of its products and customers are essentially the same. The sales from the Company's beverage
product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the
Company's products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second
reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated
revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical
performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales
through Amazon, and Gold Leaf distribution sales, is included in Note 16,
Revenue
, to the Consolidated Financial Statements.
We also sell merchandise and apparel that comprises approximately 1% of the Company's gross annual sales, and solely exists
to promote its beverages. Therefore, the Company's merchandise and apparel products are not a reportable segment. Merchandise
and apparel sales are included with the gross sales for its Beverages Segment.
Sales are made to customers
under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total
sales. The Company recorded sales, returns, and allowance at three months ending September 30, 2021 and 2020 of approximately $
16,600
and $
6,600
, respectively, and the nine months ending September 30, 2021 and 2020 of approximately $
61,000
and $
30,700
, respectively,
which is included in the revenues, net of sales returns and allowances in the accompanying Consolidated Statements of Loss.
F-
10
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
K.
Cost of Revenues
Cost of revenues consist primarily
of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs
and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated
expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is
earned.
L.
Impairment of Long-Lived Assets
The Company evaluates its long-lived
assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not
be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount
of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted
cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted
to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired.
M.
Income Taxes
The Company accounts for income
taxes in accordance with FASB ASC 740,
Income Taxes,
which clarifies the accounting and disclosure requirements for uncertainty
in tax positions. It requires a two-step approach to evaluate tax positions and determine if they should be recognized in the financial
statements. The two-step approach involves recognizing tax positions that are "more likely than not" to occur and then
measuring those positions to determine if they are recognizable in the financial statements. Management regularly reviews and analyzes
all tax and has determined that no uncertain tax positions requiring recognition have occurred.
The Company has no recorded
liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated September 30, 2021 and December
31, 2020, respectively.
N.
Stock-Based Compensation
FASB's ASC Topic 718,
Stock Compensation
(formerly, FASB Statement 123R) ("ASC Topic 718"), prescribes accounting and reporting standards
for all stock-based payment transactions in which employee and non-employee services are acquired. The Company measures the cost
of employee and non-employee services received in exchange for an award of equity instruments based on the grant-date fair value
of the award. Fair value for restricted stock awards is valued using the closing price of the Company's common stock, par
value $0.00001 per share (the "Common Stock"), on the date of grant.
The Company estimates the fair
value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc.
(the "OTCM") on the date of grant. The fair value determined represents the cost for the award and is recognized over
the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for
forfeitures of restricted stock as they occur.
F-
11
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
O.
Advertising Costs
The Company expenses costs
of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise
or free samples to create sales. Advertising and promotion costs for the three months ended September 30, 2021 and 2020, was approximately
$
21,600
and $
5,200
, respectively, and for the nine months ended September 30, 2021 and 2020, was approximately $
45,700
and $
20,600
,
respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements
of Loss.
P.
Concentration of Credit Risk
The Company maintains cash
balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to
$
250,000
. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial
institutions and had determined the credit exposure to be negligible.
Q.
Basic and Diluted Earnings per Share
In accordance with FASB's
ASC 260,
Earnings per Share
, basic income (loss) per common share is calculated using the weighted average number of shares
outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities
outstanding during the periods presented.
Diluted per-share loss is the
same as basic per-share loss when there is a loss from continuing operations.
R.
Segments
ASC 280-10,
Segment Reporting
("ASC 280-10"), establishes standards for reporting information regarding operating segments in annual financial statements
and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10
also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified
as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating
decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company identified
two operating segments that report revenue, including both sales to external customers and intersegment sales or transfers, that
are 10% or more of the combined revenue, internal and external, of all the Company's operating segments. Furthermore, each
of the operating segments have assets that are 10% or more of the combined assets of all operating segments.
The Company then applied the
management approach to the identification of its two reportable segments – the Beverages Segment, consisting of the operations
of Kona, HighDrate, and Ooh La Lemin, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the
Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in
that aggregation into two reportable segments allows users of our financial statements to view the Company's business through
the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered
included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each
operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the
distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises
approximately 1% of the Company's gross annual sales, and solely exists for promotion purposes, could be aggregated with
the operations in the Beverages Segment. A description of the Company's products is contained in Note 1,
Organization
and Description of Business.
For additional information regarding the Company's two reportable segments, please see Note
18,
Segments.
F-
12
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
S.
Registration Rights Agreement
In May 2020, the Company completed
a private placement transaction (the "2020 Private Placement") of three secured convertible debentures (the "2020
Debentures"), convertible for up to
105,947,397
shares (the "2020 Conversion Shares") of Common Stock and a Warrant
to purchase Common Stock (the "2020 Warrant"), exercisable for up to
20,000,000
shares of Common Stock (the "2020
Warrant Shares"), pursuant to that certain Securities Purchase Agreement between an otherwise unaffiliated third-party investor
(the "Selling Stockholder") and the Company, dated as of May 14, 2020 (the "2020 SPA"). The Company sold
and issued the initial 2020 Debenture (the "First 2020 Debenture") and granted the Warrant promptly after entering
in the 2020 SPA. The Company sold and issued the second 2020 Debenture (the "Second 2020 Debenture") promptly after
filing the registration statement on Form S-1 (the "2020 Registration Statement") with the Securities and Exchange
Commission (the "SEC"). The Company sold and issued the third 2020 Debenture (the "Third 2020 Debenture")
promptly after the SEC declared the 2020 Registration Statement effective. The Company agreed to register the 2020 Conversion Shares
and 2020 Warrant Shares pursuant to the terms of the Registration Rights Agreement between the Selling Stockholder and Company,
dated as of May 14, 2020 (the "2020 Registration Rights Agreement").
Pursuant to the terms of the
Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the
Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company
agreed to use its best efforts to have the 2020 Registration Statement declared effective by the SEC as soon as practicable, but
in no event later than the effectiveness deadline, or by the 5
th
trading day following the date on which the Company
is notified that the 2020 Registration Statement will not be reviewed or is no longer subject to further review and Pursuant to
the terms of the 2020 Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering
for resale the 2020 Conversion Shares and the 2020 Warrant Shares within 45 calendar days following the closing of the 2020 Private
Placement. Further, the Company agreed to use its best efforts to have the 2020 Registration Statement declared effective by the
SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5
th
trading day following
the date on which the Company is notified that the 2020 Registration Statement will not be reviewed or is no longer subject to
further review and comments. Pursuant to the 2020 Registration Rights Agreement, the Company is subject to partial liquidated damages
equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the 2020 SPA for any of the 2020 Debentures then held
by the holder for failure to file the 2020 Registration Statement timely, failure to file with the SEC a request for acceleration
in accordance with Rule 461 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), within
five trading days after the date the Company is notified that the 2020 Registration Statement will not be reviewed or is not subject
to further review, the 2020 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness,
the 2020 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted
to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar
days during any 12-month period, or if after the six-month anniversary of the 2020 Registration Rights Agreement, the Company does
not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate
liquidated damages payable to a holder of the 2020 Debentures under the 2020 Registration Rights Agreement is 24% of the aggregate
purchase price paid by such holder pursuant to the 2020 SPA. The Selling Stockholder has agreed to waive this 30-consecutive-calendar-day
provision for so long as the Company is utilizing its best efforts to file its Annual Report on Form 10-K for its fiscal year ended
December 31, 2020, and promptly thereafter files a Post-Effective Amendment to the 2020 Registration Statement. The Commission
declared effective both the 2020 Registration Statement and the Post-Effective Amendment to the 2020 Registration Statement.
F-
13
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company accounts for registration
rights agreements in accordance with ASC subtopic 825-20,
Registration Payment Arrangements
("ASC 825-20").
Under ASC 825-20, the Company is required to disclose the nature and terms of the arrangement, the maximum potential amount and
to assess each reporting period the probable liability under these arrangements and, if exists, to record or adjust the liability
to current period operations. ASC 825-20 specifies that the contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a
financial instrument, should be separately recognized and accounted for as a contingency in accordance with ASC 450-20,
Loss
Contingencies
. The Company recorded no amount for this contingency in other expenses for the year ended December 31, 2020.
As a result, there was no contingency recorded as a liability as a component of accrued expenses as of December 31, 2020.
In February 2021, the Company completed
a private placement transaction (the "February 2021 Private Placement") of two secured convertible debentures (the "February
2021 Debentures"), convertible for up to 154,958,678 shares (the "February 2021 Conversion Shares") of Common Stock
and granted a Warrant to purchase Common Stock (the "February 2021 Warrant"), exercisable for up to 50,000,000 shares of
Common Stock (the "February 2021 Warrant Shares"), pursuant to that certain Securities Purchase Agreement between the Selling
Stockholder and the Company, dated as of February 10, 2021 (the "February 2021 SPA"). The Company sold and issued the initial
February 2021 Debenture (the "First February 2021 Debenture") and granted the February 2021 Warrant promptly after entering
in the February 2021 SPA. The Company will sell and issue the second February 2021 Debenture (the "Second February 2021 Debenture")
promptly after the SEC declares effective the February 2021 Registration Statement (as defined below).
The February 2021 Debentures
are due 12 months from their respective issuance dates and are secured by all of the Company's assets and the assets of each
of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company's
subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion
price, which is $
0.03
per share, subject to adjustment (the "February 2021 Fixed Conversion Price"),
or (ii) 80% of the lowest daily volume weighted average price ("VWAP") of our Common Stock during the 15 trading days immediately
preceding the conversion date, subject to adjustment (the "February 2021 Market Conversion Price"). The February 2021 Debentures
contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its
Common Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any
stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will
also result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject to a "conversion
blocker" such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures that would result in the Selling
Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion
(excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the February 2021 Debentures or
exercise of the February 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase
that 4.99% "conversion blocker" to 9.99% upon at least 65 days' prior written notice to the Company. The February 2021
Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the
Selling Stockholder converts the February 2021 Debentures or otherwise accelerates the maturity date, as provided for in the February
2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the February 2021 Debentures) are
then satisfied, in shares of the Common Stock at the February 2021 Market Conversion Price on the trading day immediately prior to the
date paid.
At the Company's option, it
has the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP of the
Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions
failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as
well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium"). The
Company must provide the holder 15 business days' advance notice of its intent to make a redemption, setting forth the amount of
principal and interest we desire then to redeem plus the applicable Redemption Premium
F-
14
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The February 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the February 2021 Debentures.
Pursuant to the February 2021
SPA, the purchase price for the First February 2021 Debenture was $
900,000
,
less $
41,000
for origination fees, which consisted of the "original issue discount" of $
36,000
and $
5,000
as a structuring fee. Pursuant to the February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $
600,000
,
less $
24,000
as an "original issue discount."
In connection with the February 2021 Private Placement, the Company also
granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The February 2021 Warrant has
a three-year term and is immediately exercisable at an exercise price  of $
0.03
per share, subject to adjustment. If the Company fails to maintain an
effective registration statement with the SEC covering the resale of the February 2021 Warrant Shares, or if an Event of Default (as defined
below) has occurred and is continuing, then the holder may exercise the February 2021 Warrant on a "cashless" basis. "Event
of Default" means an event of default under the February 2021 SPA or the February 2021 Debentures.
The
The February 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the February 2021 Warrant.
The February 2021 Warrant is subject to an
"exercise blocker" such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the February 2021 Warrant
or conversion of the February 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% "exercise blocker" to 9.99% upon at least 65 days' prior written notice to the Company.
Pursuant to the terms of the February 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the "February
2021 Registration Statement") with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant
Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file
the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date
F-
15
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the Company is notified that the February
2021 Registration Statement will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not
declared effective by the effectiveness deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason
to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more
than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month
anniversary of the February 2021 Registration Rights Agreement, the Company does not have available adequate current public information
as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the February 2021
Debentures under the February 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to
the February 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and
to pay all fees and expenses incurred by the Company in connection with the registration of the February 2021 Conversion Shares and the
February 2021 Warrant Shares held by the Selling Stockholder. The Commission declared effective the February 2021 Registration Statement.
In August 2021, the Company completed
a private placement transaction (the "August 2021 Private Placement") of two secured convertible debentures (the "August
2021 Debentures"), convertible for up to 1,111,111,110 shares (the "August 2021 Conversion Shares") of Common Stock
and granted a Warrant to purchase Common Stock (the "August 2021 Warrant"), exercisable for up to 100,000,000 shares of Common
Stock (the "August 2021 Warrant Shares"), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder
and the Company, dated as of August 20, 2021 (the "August 2021 SPA"). The Company sold and issued the initial August 2021
Debenture (the "First August 2021 Debenture") and granted the August 2021 Warrant promptly after entering in the August 2021
SPA. The Company will sell and issue the second August 2021 Debenture (the "Second August 2021 Debenture") promptly after
the SEC declares effective the August 2021 Registration Statement (as defined below).
The August 2021 Debentures are due
12 months from their respective issuance dates and are secured by all of the Company's assets and the assets of each of its subsidiaries
pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company's subsidiaries, and the Company.
Initially, the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject
to adjustment (the "August 2021 Fixed Conversion Price"), or (ii) 75% of the lowest daily volume weighted average price ("VWAP")
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the "August 2021
Market Conversion Price"). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and
asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures.
The August 2021 Debentures are subject to a "conversion blocker" such that the Selling Stockholder cannot convert any portion
of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common
Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% "conversion blocker" to 9.99% upon at least
65 days' prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are
due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise
accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion
Price on the trading day immediately prior to the date paid.
F-
16
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At the Company's option,
it has the right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP of the
Common Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure.
The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as
a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium"). The Company
must provide the holder 15 business days' advance notice of its intent to make a redemption, setting forth the amount of principal
and interest we desire then to redeem plus the applicable Redemption Premium
The August 2021 Debentures contain an adjustment provision
that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents
at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations,
mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price
of the August 2021 Debentures.
Pursuant to the August 2021
SPA, the purchase price for the First August 2021 Debenture was $
1,500,000
,
less $
70,000
for origination fees, which consisted of the "original issue discount" of $
60,000
and $
10,000
as a structuring fee. Pursuant to the August 2021 SPA, the purchase price for the Second August 2021 Debenture will be $
1,500,000
,
less $
60,000
as an "original issue discount."
In connection with the August
2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of
50
million shares of the Common Stock. The August 2021 Warrant has a
three-year
term and is immediately exercisable at an exercise price of $
0.03
per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the
resale of the August 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the
holder may exercise the August 2021 Warrant on a "cashless" basis. "Event of Default" means an event of
default under the August 2021 SPA or the August 2021 Debentures.
The August 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the August 2021 Warrant.
The August 2021 Warrant is subject to an
"exercise blocker" such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant
or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% "exercise blocker" to 9.99% upon at least 65 days' prior written notice to the Company.
F-
17
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the terms of the August
2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the
"August 2021 Registration Statement") with the SEC registering for resale the August 2021 Conversion Shares and the August
2021 Warrant Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed
to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for
its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed
to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no
event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the
August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement
will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.
The Commission declared effective the August 2021 Registration Statement.
T.
Recently Issued Accounting Pronouncements
The Company has evaluated all
recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending
September 30, 2021. The Company does not expect a material impact on the Company's financial position, result of operations,
or cash flows from these pronouncements.
NOTE 3 –
INVENTORY
Inventory consisted of the following:
September 30, 2021
December 31, 2020
CBD Energy Water
$
111,414
$
159,813
Hemp Energy Drink
248,507
343,119
Storm CBD Water
29,519
28,692
Ooh La Lemin Drink
162,004
—
Merchandise and Apparel
11,564
11,948
Unfilled Cans, Trays and Sleeves
44,134
38,705
Miscellaneous Beverages
95,030
33,225
Raw Materials
17,444
Other Inventory
140,274
43,362
Point of Sale Inventory
6,723
1,640
Total Inventory
$
866,613
$
660,504
F-
18
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 –
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
September 30, 2021
December 31, 2020
Furniture and Fixtures
$
72,575
$
57,879
Computers and Software
28,108
16,638
Machinery & Equipment
98,593
79,951
Vehicles
160,415
68,135
Less: Accumulated Depreciation
(
78,662
)
(
54,731
)
Property, plant and equipment, net
$
281,029
$
167,872
Depreciation for the three
months ended September 30, 2021 and 2020, was approximately $
12,500
and $
9,200
respectively, and for the nine months ended September
30, 2021 and 2020, was approximately $
32,800
and $
24,800
, respectively, and is included in selling, general and administrative
expenses in the accompanying Consolidated Statements of Loss.
NOTE 5 –
GOODWILL AND INTANGIBLE ASSETS
In April 2019,
Gold Leaf acquired
21,000,000 shares, representing 51.65% of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com,
Inc., a California corporation ("BigSupersearch"), and 14,000,000 shares of its Series A preferred stock, representing
76.26% of the issued and outstanding shares of preferred stock, for an aggregate of $61,000, which amount included the purchase
price, attorney fees, and transfer fees. At the time of the acquisition, BigSupersearch was considered a "shell company"
because it had no operations and no assets. Because no transfer of assets or liabilities occurred, the entire $61,000, representing
the consideration paid for all of the issued and outstanding capital stock of BigSupersearch, was recorded as goodwill.
Gold Leaf
has not commenced operations or done anything with BigSupersearch and it still remains a shell company.
Goodwill may not be amortized.
Instead, it is tested at least annually for impairment. Impairment is the condition that exists when the carrying amount of goodwill
exceeds its implied fair value. The fair value of goodwill can be measured only as a residual and cannot be measured directly.
The Company uses a methodology to determine an amount that achieves a reasonable estimate of the value of goodwill for purposes
of measuring an impairment loss. That estimate is referred to as the implied fair value of goodwill.
At December 31, 2019, BigSupersearch
had a positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that
the fair value of BigSupersearch exceeded its carrying value, including goodwill. In accordance with the Qualitative Assessment
outlined in ASC 350-20-35,
Goodwill – Subsequent Measurement
("ASC 350-20-35")
,
an entity has an
unconditional option to bypass the qualitative assessment and proceed directly to performing the first step of the goodwill impairment
test.
The Quantitative Assessment
is a two-step process as outlined in ASC 350-20-35 and is used to identify both the existence of impairment and the amount of impairment.
The first step is to determine the fair value. If the carrying amount is greater than zero and its fair value exceeds its carrying
amount, then there is no impairment and the second step is not necessary. If the carrying amount of BigSupersearch exceeds the
fair value, then goodwill will be measured for impairment in the second step. The amount of impairment loss recorded is the difference
in the excess of the carrying amount over its fair value.
F-
19
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Management determined that
for the year ending December 31, 2019, BigSupersearch had no identifiable assets or liabilities; therefore, the implied fair value
of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $
61,000
. At March 31, 2021,
and at December 31, 2020, BigSupersearch had $
0
in goodwill.
On
January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S
and its shareholders
and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger was filed with the Wisconsin
Department of Financial Institutions (the "Merger Certificate") on February 1, 2021. On January 22, 2021, (i) Kona
Gold, (ii) KGS Temporary Company, Inc. (Kona Gold Beverage, Inc.'s "Acquisition Subsidiary"), (iii) S and S,
(iv) William J. Stineman and K&L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders),
and (v) Mr. Stineman (as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the "Merger
Agreement"). S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned
subsidiary of Kona Gold Beverage, Inc.
Pursuant
to the Merger Agreement, and subject to the terms and conditions contained therein,
we acquired
all of the shares of capital stock of S and S from the five holders thereof (the "S and S Legacy Shareholders"). In
consideration thereof, we issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.'s common
stock (the "Acquisition Stock") on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights
in respect of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the "Aggregate Acquisition
Payments"), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy Shareholders)
and approximately $
89,000
of which (the "Remaining Acquisition Payments") is allocated to the five S and S Legacy Shareholders
on a pro rata basis. $
400,000
of the Aggregate Acquisition Payments are scheduled to be paid in the next two weeks. The balance
of the Aggregate Acquisition Payments, including the Remaining Acquisition Payments, are scheduled to be paid in monthly installments,
in arrears on the tenth calendar day of each month, commencing on March 10, 2021, at a rate equivalent to $
2.00
per case of Lemin
Superior Lemonade (the product line of S and S that we have now branded as Ooh La Lemin) that we sell until the Aggregate Acquisition Payments have been paid in full. In
addition to the Aggregate Acquisition Payments, we also assumed and agreed to pay certain other liabilities of S and S as set forth
in the Merger Agreement. Because of this goodwill was recorded in the amount of $
1,275,938
, see
Note 19 –
Acquisition
of S and S Beverage, Inc.
Changes in goodwill are as
follows:
September 30,
December 31,
2021
2020
Beginning of year
$
—
$
—
Acquired goodwill
1,275,938
—
Impairment
—
—
Total goodwill
$
1,275,938
$
—
Intangible assets consisted of the following:
September 30, 2021
December 31,   2020
Trademark (HighDrate)
$
81,750
$
81,750
Website Development (Ooh La Lemin)
12,201
—
Less: Accumulated Amortization
(
19,207
)
(
12,262
)
Total Intangible Asset
$
74,744
$
69,488
F-
20
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Estimated future amortization expense related to
the intangible asset is as follows:
Fiscal year ending:
December
    31, 2021 (remaining 3 months)
2,349
December 31, 2022
9,395
December 31, 2023
9,395
December 31, 2024
9,395
December 31, 2025
9,395
Thereafter
34,815
Finite-Lived Intangible Assets, Net
$
74,744
NOTE 6 –
NOTE RECEIVABLE
On May 26, 2016, Robert Clark,
formed Elev8 Hemp, LLC, a Delaware limited liability company ("Elev8 Hemp"), on behalf of Ryan Medico, the Company's
then-Chief Financial Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp.
In June 2016, the Company entered
into a letter of intent with Elev8 Hemp to acquire it, such that it would become the Company's wholly-owned subsidiary. Pursuant
to the letter of intent, on June 7, 2016, the Company entered into an Acquisition Agreement with Elev8 Hemp (the "Elev8 Hemp
Acquisition Agreement"), whereby the Company agreed to acquire
100
% of the ownership of Elev8 Hemp and, in exchange, the
Company agreed to issue to Mr. Medico five million restricted shares of the Common Stock, which had a fair market value of $
50,000
.
The Elev8 Hemp Acquisition Agreement provided that if the Company failed to adequately capitalize the development of Elev8 Hemp
to complete its objectives set forth in its business plan, then Mr. Medico would have the option until March 31, 2018 to purchase
Elev8 Hemp from the Company for a purchase price of $
50,000
, which could be paid in shares of the Company's Common Stock.
On October 10, 2016, the Company
entered into a Membership Interest Purchase Agreement (the "Membership Interest Purchase Agreement") with Elev8 Hemp,
as the Company's wholly-owned subsidiary, and Branded Legacy, Inc., formerly known as Elev8 Brands, Inc. and, prior to that,
known as PLAD, Inc. ("Branded Legacy"), to sell
100
% of the then-issued and outstanding membership interests of Elev8
Hemp to Branded Legacy in consideration of its issuance to the Company of
200,000,000
shares of its common stock, par value $
0.00001
.
In connection with this transaction, Mr. Medico became the Chief Executive Officer and the sole director of Branded Legacy. The
parties desired to enter into the Membership Interest Purchase Agreement because the Company did not have adequate capital to fund
the development of Elev8 Hemp's business, as well as its own. Until July 2018, Mr. Medico also continued to serve as the
Company's Chief Financial Officer.
On April 14, 2017, the Company's
Board of Directors (the "Board") declared a dividend to its stockholders of an aggregate of
53,196,608
shares of common
stock of Branded Legacy. The Company's stockholders received one share of common stock of Branded Legacy for every 10 shares
of the Company's Common Stock held on the record date. On the record date, we had approximately 104 stockholders, all of
whom received this dividend. After the payment of the dividend, the Company held
146,803,392
shares of common stock of Branded
Legacy.
On March 6, 2018, the Company
entered into a Securities Exchange and Settlement Agreement (the "First Exchange Agreement") with Branded Legacy. Pursuant
to the First Exchange Agreement, the Company exchanged with Branded Legacy the remaining
146,803,392
shares of common stock held
by the Company for
2,746,723
shares of Branded Legacy's Series D preferred stock. The shares of Series D preferred stock
were initially convertible into
164,803,380
shares of common stock of Branded Legacy. At December 31, 2018, the balance of the
investment in Branded Legacy was $
1,648
.
F-
21
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
On November 26, 2019, we entered
into a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the remaining investment of
2,746,723
shares of Branded Legacy's Series D preferred stock for its 10-year, unsecured, non-convertible promissory note in our favor
in the original principal amount of $
1,500,000
(the "Branded Legacy Note"). All principal and accrued and unpaid interest
on the Branded Legacy Note is payable, in full, on November 27, 2029. As of the dates of the foregoing transactions, the Company
and Branded Legacy were not considered related parties based upon the guidance set forth in ASC Topic 850,
Related Party Disclosures
.
Management could not ascertain
with certainty of the collectability of the Branded Legacy Note due to the dollar amount and duration of the term; therefore, an
allowance for $
1,500,000
had been assessed and expensed, which was included in the Consolidated Statements of Loss for the year
ended December 31, 2019. The Branded Legacy Note and the investment in Branded Legacy consisted of the following:
September
    30, 2021
December
    31, 2020
Investment in Branded Legacy
$
—
$
—
Note receivable
1,500,000
1,500,000
Less: Allowance for
    doubtful account
(
1,500,000
)
(
1,500,000
)
Note
    receivable, net
$
—
$
—
NOTE 7 –
STOCK-BASED COMPENSATION
The Company's directors,
officers, key employees, and non-employees were granted stock-based compensation consisting of restricted stock awards. Stock-based
compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense at the date of
issuance. The Company estimates the fair value of each restricted stock award as of the date of grant using closing price as reported
by the OTCM on the date of grant. The Board has not adopted any employee stock purchase plans or other incentive plans, nor does
the Company grant stock options to its directors, officers, and employees.
The share-based payments granted
for the nine months ended September 30, 2021 and the year ended December 31, 2020, were
12,100,000
and
10,085,140
shares
of the Common Stock, respectively. No stock-based Common Stock was cancelled or forfeited for the nine months ended September 30,
2021 and the year ended December 31, 2020, respectively.
For the nine months ended September
30, 2021 and 2020, the Company recognized stock-based compensation expense, which is included in selling, general and administrative
expenses in the accompanying Consolidated Statements of Loss, as follows:
Nine Months Ended September 30,
Nine Months Ended September 30,
2021
2020
Employee stock awards
$
55,800
$
476,000
Non-employee stock awards
270,900
2,577
Total stock-based compensation expense
$
326,700
$
478,577
The Company expenses stock-based
compensation cost in the current period at the grant date. No future years of compensation is expected for the next five fiscal
years. The Company has a balance in accrued stock-based compensation at September 30, 2021 and December 31, 2020, of $
1,386,497
and $
1,386,497
, respectively.
F-
22
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 –
LINE OF CREDIT
On May 5, 2018, Kona entered
into a Line of Credit Agreement with Matthew Nicoletti as the lender, which established a revolving line of credit in the amount
of up to $
400,000
. The line of credit matures on
May 5, 2022
and is reflected as non-current on the accompanying Consolidated Balance
Sheets. Advances under the line of credit bear interest at the rate of
3.75
percent per annum. Payments of principal and accrued
interest are payable on the maturity date. At September 30, 2021 and December 31, 2020, the line of credit had an outstanding principal
balance of $
198,470
, respectively, and accrued interest of $
42,683
and $
32,102
, respectively.
NOTE 9 –
RELATED PARTY TRANSACTIONS
A.
Long-term debt consists of two note payables with a related party:
1)
On October 31, 2018, Kona issued a Standard Promissory Note in favor of Robert Clark, as lender, in the original principal amount of $
20,000
. Mr. Clark is the Company's President, Chief Executive Officer, Secretary, and Chairman of the Board. The note bears no interest. Principal payments of $
500
per month commenced in February 2019, with the final payment due in April 2021. At September 30, 2021, this note had been paid in full. At December 31, 2020 the balance of this note was $
8,500
.
2)
On February 19, 2019, Gold Leaf issued a Standard Promissory Note in Favor of Robert Clark, as lender, in the original principal amount of $
70,000
. The note bears no interest. Principal payments of $
500
per month commenced in March 2019, with final payment due in March 2021. On March 15, 2021, Gold Leaf issued an Amendment to the original issued Standard Promissory Note in Favor of Robert Clark for the remaining outstanding principle of $
58,000
. Principal payment of $
500
per month, with final payment due in March 2022. The outstanding principal balance of this note at September 30, 2021 and December 31, 2020 was $
55,000
and $
59,500
, respectively.
The future maturities are as follows:
December 31, 2021 (remaining
    3 months)
$
55,000
Long-term Debt
$
55,000
B.
Lines of credit consists of two agreements with a related party:
1)
On April 4, 2019, Kona entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $
1,500,000
. Advances under this line of credit bear interest at the rate of
3.75
percent per annum. The line of credit matures on April 4, 2022, at which time all outstanding principal amounts and accrued interest are due and payable.  At September 30, 2021 and December 31, 2020, outstanding principal was $
1,372,651
and $
1,369,651
, respectively, and accrued interest was $
73,906
and $
36,397
, respectively.
2)
On August 29, 2019, Gold Leaf entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $
200,000
. Advances under this line of credit bear interest at the rate of
3.75
percent per annum. The line of credit matures on August 29, 2021, at which time all outstanding principal amounts and accrued interest are due and payable. At September 30, 2021 and December 31, 2020, outstanding principal was $
125,500
and $
100,000
, respectively, and accrued interest was $
7,065
and $
3,545
, respectively.
F-
23
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE
10 –
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT
2020 Securities Purchase
Agreement
In May 2020, the Company completed
the 2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the
First 2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second
2020 Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third
2020 Debenture promptly after the SEC declared the 2020 Registration Statement effective. The 2020 Debentures are due 12 months
from their respective issuance dates and are secured by all of the Company's assets and the assets of each of its subsidiaries
pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company's subsidiaries, and the Company.
Initially, the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $
0.05
per share, subject
to adjustment (the "2020 Fixed Conversion Price"), or (ii) 80% of the lowest daily volume weighted average price ("VWAP")
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the "2020
Market Conversion Price"). The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. The
2020 Debentures are subject to a "conversion blocker" such that the Selling Stockholder cannot convert any portion
of the 2020 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of
the Common Stock issuable upon conversion of the 2020 Debentures or exercise of the 2020 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% "conversion blocker" to 9.99% upon at
least 65 days' prior written notice to the Company. The 2020 Debentures accrue interest at an annual rate equal to 8% and
are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2020 Debentures or otherwise
accelerates the maturity date, as provided for in the 2020 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the 2020 Debentures) are then satisfied, in shares of the Common Stock at the 2020 Market Conversion
Price on the trading day immediately prior to the date paid.
At the Company's option,
it has the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their
respective maturity dates;
provided
,
that
, as of the date of the holder's receipt of the redemption notice,
(i) the VWAP of the Common Stock is less than the 2020 Fixed Conversion Price, initially $0.05 per share, and (ii) there is no
Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued
interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption
Premium"). The Company must provide the holder 15 business days' advance notice of its intent to make a redemption,
setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.
The 2020 Debentures contain
an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits,
reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result
in an adjustment of the conversion price of the 2020 Debentures.
Pursuant to the terms of the
Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the
Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company
also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses
incurred by the Company in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling
Stockholder.
F-
24
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the 2020 SPA, the
purchase price for the First 2020 Debenture was $
250,000
, less $
15,000
for origination fees, which consisted of the "original
issue discount" of $
10,000
and $
5,000
as a structuring fee. On December 23, 2020, the Company converted $
100,000
of the principal
of, and $
12,274
of accrued interest on, the First 2020 Debenture into
8,255,438
shares of the Company's common stock. On
January 25, 2021, the Company converted $
150,000
of the principal of, and $
1,118
of accrued interest on, the First 2020 Debenture
into
7,094,732
shares of the Company's common stock, see Note 12,
Equity Transactions
. At March 31, 2021, no balance
remains on the First 2020 Debenture.
Pursuant to the 2020 SPA, the
purchase price for the Second 2020 Debenture was $
250,000
, less $
10,000
for origination fees, which consisted of the "original
issue discount" of $
10,000
fee. On January 25, 2021, the Company converted $
100,000
of the principal of, and $
10,410
of accrued
interest on, the Second 2020 Debenture into
5,183,613
shares of the Company's common stock. On February 19, 2021, the Company
converted $
150,000
of the principal of, and $
855
of accrued interest on, the Second 2020 Debenture into
7,252,634
shares of the
Company's common stock see Note 12,
Equity Transactions
. At March 31, 2021, no balance remains on the First 2020 Debenture.
Pursuant to the 2020 SPA, the
purchase price for the Third 2020 Debenture was $
500,000
, less $
10,000
for origination fees, which consisted of the "original
issue discount" of $
10,000
fee. On January 12, 2021, the Company converted $
200,000
of the principal of, and $
1,425
of accrued
interest on, the First 2020 Debenture into
10,887,819
shares of the Company's common stock, see Note 12,
Equity Transactions
.
On May 5, 2021, the Company converted $300,000 of the principal of, and $
7,496
of accrued interest on, the First 2020 Debenture
into issued an aggregate of
14,436,426
shares of common stock, see Note 12,
Equity Transactions
. At September 30, 2021,
no balance remains on the Third 2020 Debenture.
February 2021 Securities
Purchase Agreement
In February 2021, the Company
completed a private placement transaction (the "February 2021 Private Placement") of two secured convertible debentures
(the "February 2021 Debentures"), convertible for up to
154,958,678
shares (the "February 2021 Conversion Shares") of Common Stock and granted a Warrant to purchase Common Stock (the
"February 2021 Warrant"), exercisable for up to
50,000,000
shares of Common Stock (the "February 2021 Warrant Shares"),
pursuant to that certain Securities Purchase Agreement between the Selling stockholder and the Company, dated as of February 10, 2021
(the "February 2021 SPA"). The Company sold and issued the initial February 2021 Debenture (the "First February 2021
Debenture") and granted the February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue
the second February 2021 Debenture (the "Second February 2021 Debenture") promptly after the SEC declares effective the February
2021 Registration Statement (as defined below).
F-
25
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The February 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company's
assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the
Company's subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed
conversion price, which is $0.03 per share, subject to adjustment (the "February 2021 Fixed Conversion Price"), or (ii) 80%
of the lowest daily volume weighted average price ("VWAP") of our Common Stock during the 15 trading days immediately preceding
the conversion date, subject to adjustment (the "February 2021 Market Conversion Price"). The February 2021 Debentures contain
an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock
splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also
result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject to a "conversion
blocker" such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures that would result in the
Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the February 2021
Debentures or exercise of the February 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder
can increase that 4.99% "conversion blocker" to 9.99% upon at least 65 days' prior written notice to the Company. The
February 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or
sooner if the Selling Stockholder converts the February 2021 Debentures or otherwise accelerates the maturity date, as provided for in
the February 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the February 2021 Debentures)
are then satisfied, in shares of the Common Stock at the February 2021 Market Conversion Price on the trading day immediately prior to
the date paid.
At the Company's option, it has the
right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP of the Common Stock
is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The
Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption
premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium"). The Company must provide
the holder 15 business days' advance notice of its intent to make a redemption, setting forth the amount of principal and interest
we desire then to redeem plus the applicable Redemption Premium.
The February 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the February 2021 Debentures.
Pursuant to
the February 2021 SPA, the purchase price for the First February 2021 Debenture was $
900,000
,
less $
41,000
for
origination fees, which consisted of the "original issue discount" of $
36,000
and
$
5,000
as
a structuring fee. Pursuant to the February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $
600,000
,
less $
24,000
as
an "original issue discount."
In connection with the February 2021 Private
Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock.
The February 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment.
If the Company fails to maintain an effective registration statement with the SEC covering the resale of the February 2021 Warrant Shares,
or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the February 2021 Warrant on
a "cashless" basis. "Event of Default" means an event of default under the February 2021 SPA or the February 2021
Debentures.
The February 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the February 2021 Warrant.
F-
26
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The February 2021 Warrant is subject to an "exercise blocker" such that the Selling Stockholder cannot exercise any portion
of the February 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common
Stock issuable upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised
or converted, respectively). The Selling Stockholder can increase that 4.99% "exercise blocker" to 9.99% upon at least 65
days' prior written notice to the Company.
Pursuant to the terms of the February 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the "February
2021 Registration Statement") with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant
Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file
the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the February 2021 Registration Statement
will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in
connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares held by the Selling Stockholder.
Pursuant to the February 2021 SPA, the purchase
price for the First February 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the "original issue
discount" of $36,000 and $5,000 as a structuring fee.
At September 30, 2021, the principal balance
of the First February 2021 Debenture is $900,000.
On May 5, 2021, the Company
and YA II PN, LTD entered into a Limited Amendment Agreement dated as of May 5, 2021, by and between Kona Gold Beverage, Inc.,
a Delaware corporation (the "Company"), and YA II PN, LTD., a Cayman Islands exempt company ("Investor").
The Company and the Investor agree to a partial Second Closing, whereby the Investor will purchase a portion of the intended Second
Convertible Debenture (the "Partial Second Convertible Debenture") in the face amount of $
200,000
for a purchase price
of $
192,000
(the "Partial Second Convertible Debenture Purchase Price") within 1 business day following the date hereof.
The Investor and the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement"), Registration
Rights Agreement (the "Registration Rights Agreement") and related Transaction Documents (as this term is defined in
the Securities Purchase Agreement) dated February 10, 2021, the date thereof, pursuant to which the Investor agreed to purchase
secured Convertible Debentures (individually referred to as the "First Convertible Debenture" and the "Second
Convertible Debenture") upon various conditions precedent as articulated in Section 8(a) and (b) of the Securities Purchase
Agreement and in the Transaction Documents, see above Note 9 – Securities Purchase Agreement, Derivative Liabilities, And
Warrant.
F-
27
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the February 2021 SPA,
the purchase price for the Second February 2021 Debenture was $600,000, less $200,000 for the "Partial Second Convertible Debenture",
dated May 5, 2021, less for origination fees, which consisted of the "original issue discount" of $16,000. On June 9, 2021,
the Company converted $200,000 of the principal of, and $1,578 of accrued interest on the Second February 2021 Debenture into 6,719,269
shares of the Company's common stock see Note 11,
equity transactions
. At September 30, 2021, no balance remains on the
Second February 2021 Debenture.
August 2021 Securities Purchase Agreement
In August 2021, the Company completed
a private placement transaction (the "August 2021 Private Placement") of two secured convertible debentures (the "August
2021 Debentures"), convertible for up to 1,111,111,110 shares (the "August 2021 Conversion Shares") of Common Stock
and granted a Warrant to purchase Common Stock (the "August 2021 Warrant"), exercisable for up to 100,000,000 shares of Common
Stock (the "August 2021 Warrant Shares"), pursuant to that certain Securities Purchase Agreement between the Selling stockholder
and the Company, dated as of August 20, 2021 (the "August 2021 SPA"). The Company sold and issued the initial August 2021
Debenture (the "First August 2021 Debenture") and granted the August 2021 Warrant promptly after entering in the August 2021
SPA. The Company will sell and issue the second August 2021 Debenture (the "Second August 2021 Debenture") promptly after
the SEC declares effective the August 2021 Registration Statement (as defined below).
The August 2021 Debentures are due 12 months
from their respective issuance dates and are secured by all of the Company's assets and the assets of each of its subsidiaries pursuant
to that certain Security Agreement by and among the Selling Stockholder, the Company's subsidiaries, and the Company. Initially,
the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment
(the "August 2021 Fixed Conversion Price"), or (ii) 75% of the lowest daily volume weighted average price ("VWAP")
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the "August 2021
Market Conversion Price"). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The
August 2021 Debentures are subject to a "conversion blocker" such that the Selling Stockholder cannot convert any portion
of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common
Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted or
exercised, respectively). The Selling Stockholder can increase that 4.99% "conversion blocker" to 9.99% upon at least 65 days'
prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable
on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise accelerates
the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions
(as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion Price
on the trading day immediately prior to the date paid.
At the Company's option, it has the
right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP of the Common Stock
is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company
must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption
premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium"). The Company must provide
the holder 15 business days' advance notice of its intent to make a redemption, setting forth the amount of principal and interest
we desire then to redeem plus the applicable Redemption Premium.
The August 2021 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock
equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
conversion price of the August 2021 Debentures.
F-
28
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the August 2021 SPA, the purchase price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination
fees, which consisted of the "original issue discount" of $60,000 and $10,000 as a structuring fee. Pursuant to the August
2021 SPA, the purchase price for the Second August 2021 Debenture will be $1,500,000, less $10,000 as an "original issue discount."
In connection with the August 2021 Private
Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of 100 million shares of the Common Stock.
The August 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment.
If the Company fails to maintain an effective registration statement with the SEC covering the resale of the August 2021 Warrant Shares,
or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the August 2021 Warrant on a
"cashless" basis. "Event of Default" means an event of default under the August 2021 SPA or the August 2021 Debentures.
The August 2021 Warrant contains an adjustment
provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock
equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits,
recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the
exercise price of the August 2021 Warrant.
The August 2021 Warrant is subject to an
"exercise blocker" such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result
in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following
such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant
or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can
increase that 4.99% "exercise blocker" to 9.99% upon at least 65 days' prior written notice to the Company.
Pursuant to the terms of the August 2021
Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the "August
2021 Registration Statement") with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant
Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to waive
this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed to use
its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event
later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August
2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021
Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid
by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the
August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement
will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness
deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required
or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than
an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that
the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights
Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.
F-
29
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the August 2021 SPA,
the purchase price for the First August 2021 Debenture was $
1,500,000
,
less $
70,000
for origination fees, which consisted of the "original issue discount" of $
60,000
and $
10,000
as a structuring fee. At September 30, 2021, the principal balance of the First August 2021 Debenture is $1,500,000.
Derivative Liability
The 2020 Debentures and the
2021 Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of
the First 2020 Debenture. The estimated fair value of the 2020 Debentures and the 2021 Debentures have been calculated using the
Black-Scholes fair value option-pricing model with key input variables provided by management, as of the date of issuance, with
the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded as gains
or losses on revaluation in other income (expense). The Company identified embedded features in the 2020 Debentures and the 2021
Debentures, which caused the 2020 Debentures and the 2021 Debentures to be classified as a liability. These embedded features included
the right for the holder to request for the Company to settle the amounts owed pursuant to the 2020 Debentures and the 2021 Debentures
to the holder by paying an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the 2020 Debentures
and the 2021 Debentures on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial
instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a
derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance
sheet date.
The derivative liabilities
were valued using Black-Scholes pricing model with the following average assumptions:
September 30, 2021
Stock Price
$
0.0166
Exercise Price
$
0.0124
Expected Life
1
Volatility
87.6
%
Dividend Yield
0
%
Risk-Free Interest Rate
0.08
%
Fair Value
$
1,225,741
The following table summarizes
the changes in the Company's assets and liabilities measured at fair value as of September 30, 2021:
March 31, 2021
Quoted prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Convertible promissory notes with embedded conversion option
$
1,225,741
$
1,225,741
Total
$
1,225,741
$
1,225,741
F-
30
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth
a summary of change in fair value of the Company's derivative liabilities for the year ended September 30, 2021:
Fair value, January 1, 2020
$
—
Change in fair value of embedded conversion features of debenture included in earnings
—
Embedded conversion option liability recorded in connection with the issuance of 2020 debenture
148,628
Fair value, June 30, 2020
$
148,628
Change in fair value of embedded conversion features of debenture included in earnings
(
39,725
)
Embedded conversion option liability recorded in connection with the issuance of 2020 debentures
108,903
Fair value, September 30, 2020
$
217,806
Change in fair value of embedded conversion features of debenture included in earnings
(
69,051
)
Embedded conversion option liability recorded in connection with the issuance of 2020 debentures
212,397
Fair value, December 31, 2020
$
361,152
Change in fair value of embedded conversion features of debenture included in earnings
(
202,443
)
Embedded conversion option liability recorded in connection with the issuance of 2021 debentures
468,309
Fair value, March 31, 2021
$
627,018
Change in fair value of embedded conversion features of debenture included in earnings
(
307,585
)
Embedded conversion option liability recorded in connection with the issuance of February 2021
    debentures
166,088
Fair value, June 30, 2021
$
485,521
Change in fair value of embedded conversion features of debenture included in earnings
(
120,306
)
Embedded conversion option liability recorded in connection with the issuance of August 2021
    debentures
860,526
Fair value, September 30, 2021
$
1,225,741
Warrant
The Company also granted the
2020 Warrant, February 2021 Warrant, and the August 2021 Warrant to purchase up to an aggregate of
20
million shares,
50
million, and
100
million shares of Common Stock, respectively. Each of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant has a
three-year term. The 2020 Warrant is immediately exercisable at an exercise price of $0.05 per share, subject to adjustment. Each of
the February 2021 Warrant and the August 2021 Warrant is immediately exercisable at an exercise price of $
0.03
per share, subject to adjustment. If the Company fails to maintain an effective registration statement
with the SEC covering the resale of the 2020 Warrant Shares, the February 2021 Warrant Shares, and the August 2021 Warrant Shares, or
if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise, respectively, the 2020 Warrant,
the February 2021 Warrant, and the August 2021 Warrant on a "cashless" basis. "Event of Default" means an event
of default under the 2020 SPA, the February 2021 SPA and the August 2021 SPA or the 2020 Debentures, February 2021 Debentures and the
August 2021 Debentures,  respectively.
F-
31
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The 2020 Warrant, February 2021
Warrant, and the August 2021 Warrant, respectively, each contains an adjustment provision that, subject to certain exceptions, reduces
the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current
exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively. Any stock splits, reverse stock
splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment
of the exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively.
Each of the 2020 Warrant, February 2021 Warrant,
and the August 2021 Warrant is subject to an "exercise blocker" such that the Selling Stockholder cannot exercise any portion
of any of those warrants if such exercise would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common
Stock issuable, respectively, upon exercise of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant or conversion of the
2020 Debentures, February 2021 Debentures, and the August 2021 Debentures, respectively, that had not then been exercised or converted,
respectively). The Selling Stockholder can increase that 4.99% "exercise blocker" to 9.99% upon at least 65 days' prior
written notice to the Company.
During the year ended December 31,
2020, the Company granted the 2020 Warrant that was immediately exercisable for up to
20,000,000
shares of Common Stock. During the three months ended March 31, 2021, the Company granted the February 2021 Warrant that was immediately
exercisable for up to
50,000,000
shares of Common Stock. During the three months ended September 30, 2021,
the Company granted the August 2021 Warrant that was immediately exercisable for up to 100,000,000 shares of Common Stock. Each of the
2020 Warrant, February 2021 Warrant, and the August 2021 Warrant was fully expensed as an interest expense related to the respective 2020
Warrant, February 2021 Warrant, and the August 2021 Warrant that was issued in connection with the consummation of the transactions contemplated
by the 2020 SPA, the February 2021 SPA, and the August 2021 SPA, respectively, and no liability was recorded as of September 30, 2021
and December 31, 2020, respectively.
NOTE 11 –
PAYCHECK PROTECTION PROGRAM LOAN
On May 4, 2020,
the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $95,161 (the "First PPP Loan")
with Wells Fargo Bank, N.A ("Wells Fargo"). The First PPP Loan was made under, and is subject to, the terms and conditions
of the Paycheck Protection Program (the "PPP"), which was established as part of the Coronavirus Aid, Relief and Economic
Security Act the ("CARES Act") and is administered by the U.S. Small Business Administration (the "SBA"). The
PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying
business. The term of the First PPP Loan was two years, with a maturity date of May 6, 2022 and it contains a favorable fixed annual interest
rate of 1.00%. Payments of principal and interest on the First PPP Loan were deferred until the date on which the amount of the forgiveness
determined under the PPP Program Requirements was remitted to Wells Fargo and then would continue monthly until the maturity of the First
PPP Loan. If the we failed to apply for forgiveness within 10 months after the last day of the Covered Period, as defined in the PPP Program
Requirements, monthly principal and interest payments would commence 10 months from the last day of the Covered Period. Payments of principal
and interest must be made on such date as designated by Wells Fargo in the months that they are due. Thereafter, principal and interest
would be payable monthly and may be prepaid at any time prior to maturity with no prepayment penalties.
In
January 2021, the Company entered into a second Paycheck Protection Promissory Note in the original principal amount of $
117,487
(the "Second PPP Loan") with Wells Fargo. The Second PPP Loan
was made under, and is subject to, the terms and conditions of the PPP. The current term of the Second PPP Loan is five years, with a
maturity date of January 2026 and it contains a favorable fixed annual interest rate  of
1.00
%.
Payments of principal and interest on the Second PPP Loan were deferred for
the first six months of its term, or July 2021. Thereafter, principal and interest are payable monthly and may be prepaid by us at any
time prior to maturity with no prepayment penalties.
F-
32
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Under the
terms of the CARES Act, recipients can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such
forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth
in the PPP, including, but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, "Qualifying Expenses"),
and on the maintenance of employee and compensation levels during a certain time period following the funding of the First PPP Loan and
the Second PPP Loan. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the
eight-week period. The Company has used the proceeds of each of the PPP Loan and the Second PPP Loan for salaries and wages, building
lease expense, and utilities. On April 27, 2021, the First PPP Loan was forgiven for the full amount. No assurance is provided that the
Company will be able to obtain forgiveness of the Second PPP Loan in whole or in part.
In
May 2020, the Company also received an advance in the amount of $
7,000
as part of the Economic Injury Disaster Loan program offered by the SBA.
This advance was received after the Company filed its application for the First PPP Loan. The advance was not included in any of the documentation
related to the First PPP Loan; however, this advance was included as part of the First PPP Loan forgiveness.
NOTE 12 –
EQUITY TRANSACTIONS
Preferred
Stock
The
Company's issued and outstanding preferred stock, par value $
0.00001
per share, at September 30, 2021 and December 31, 2020 was
988,140
, respectively. The Board, without further stockholder approval, may issue preferred stock in one or more series from time
to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions
of the shares of each series.
Series
A Preferred Stock
The
Company had authorized 4,000,000 shares of Series A Preferred Stock, par value of $0
.00001
per share (the "Series A Preferred
Stock"), of which no shares were authorized, issued or outstanding at September 30, 2021 and December 31, 2020 and 4,000,000
shares were authorized, issued and outstanding at September 30, 2021 and December 31, 2020. Each share of Series A Preferred Stock,
when outstanding, could have been converted into one share of  Common Stock.
Series
B Preferred Stock
The
Company has
1,200,000
shares of Series B Preferred Stock, par value of $0
.00001
per share (the "Series B Preferred Stock") authorized, of of which
488,000
were issued and outstanding at September 30, 2021 and December 31, 2020, respectively. Each share of Series B Preferred Stock may be
converted into one share of the Common Stock.
F-
33
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Series
C Preferred Stock
On
July 8, 2020, the Company reduced the authorized number of Series C Preferred Stock from 3,300,000 to
250
shares, par value $
0.00001
per share (the "Series C Preferred Stock"), by filing a Certificate
of Designation of the Preferences, Rights, and Limitations of the Series C Preferred Stock with the Secretary of State of the State of
Delaware. The Company also amended the terms of the Series C Preferred Stock, as a result of which the holders of shares of the Series
Preferred C Stock became entitled to 2,000,000 votes for every share of Series Preferred C Stock held. The holders of the Series Preferred
C Stock are not entitled to receive dividends. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary,
before any distribution or payment will be made to the holders of any stock ranking junior to the Series C Preferred Stock, the holders
of the Series C Preferred Stock will be entitled to be paid out of the Company's assets an amount equal to $1.00 in the aggregate
for all issued and outstanding shares of the Series C Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations,
and the like with respect to such shares) (the "Preference Value"). After the payment of the full applicable Preference Value
of each share of the Series C Preferred Stock, our remaining assets legally available for distribution, if any, will be distributed ratably
to the holders of the Common Stock. The Series C Preferred Stock has conversion rights, whereby each share of the Series C Preferred Stock
automatically converts into one share of Common Stock on the one-year anniversary of the issuance date, which conversion has occurred.
September
30, 2021 and December 31, 2020, the Company had authorized
250
shares, respectively, of Series C Preferred Stock of which
140
,
respectively, were issued and outstanding at June 30, 2021 and December 31, 2020, respectively. At such dates, each share of the
Series C Preferred Stock was convertible into one and
1,000
shares, respectively of the Common Stock. As of September 30, 2021, there are no shares of Series C Preferred Stock issued and outstanding.
Series
D Preferred Stock
The
Company had authorized
500,000
shares of Series D Preferred Stock, par value of $0
.00001
per share (the "Series D Preferred
Stock"), of which
500,000
shares were issued and outstanding at September 30, 2021 and December 31, 2020, respectively. Each
share of the Series D Preferred Stock may be converted into 1,000 shares of Common Stock.
Common
Stock
The
Company had authorized
2,500,000,000
shares of the Common Stock, of which 883,068,249 shares were issued and outstanding at September
30, 2021 and
786,308,041
were issued and outstanding at December 31, 2020.
Equity
Transactions
On
December 23, 2020, the Company issued an aggregate of
8,255,438
shares of Common Stock upon the conversion of $
100,000
of the principal
of, and $
12,274
of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $
0.0170
. The First 2020 Debenture was converted at the conversion price of $0.0136, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.
On January 12, 2021, the Company
issued an aggregate of
10,887,819
shares of Common Stock upon the conversion of $
200,000
of the principal of, and $
1,425
of accrued
interest on, the Third 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0231. The
Third 2020 Debenture was converted at the conversion price of $
0.0185
, which was the lower of the 2020 Fixed Conversion Price and
the 2020 Market Conversion Price.
On
January 25, 2021, the Company issued an aggregate of
7,094,732
shares of Common Stock upon the conversion of $
150,000
of the principal
of, and $1,118 of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The First 2020 Debenture was converted at the conversion price of $
0.0213
, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.
F-
34
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
On
January 25, 2021, the Company issued an aggregate of
5,183,613
shares of Common Stock upon the conversion of $
100,000
of the principal
of, and $
10,411
of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The Second 2020 Debenture was converted at the conversion price of $
0.0213
, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.
Pursuant
to the Agreement and Plan of Merger with S and S
,
the Company issued 9,000,000 shares of its
common
stock to the five
S and S
Legacy Shareholders as follows: 6,300,000
shares to K & L Beverage;
1,980,000
shares to William J. Stineman;
360,000
shares to William F. Stineman;
270,000
shares to
Gary Kramer; and
90,000
shares to Steven Sirus. T
he per-share fair market value of the common stock was $0.0301, based on
the closing price of the Company's common stock, as reported by OTC Markets Group Inc. on February 5, 2021, the date on which
the Company filed its Current Report on Form 8-K disclosing the acquisition
.
On
February 19, 2021, the Company issued an aggregate of
7,252,634
shares of Common Stock upon the conversion of $
150,000
of the principal
of, and $
855
of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0260. The Second 2020 Debenture was converted at the conversion price of $
0.0208
, which was the lower of the 2020 Fixed
Conversion Price and the 2020 Market Conversion Price.
On
May 5, 2021, the Company issued an aggregate of
14,436,426
shares of Common Stock upon the conversion of $
300,000
of the principal
of, and $
7,496
of accrued interest on, the Third 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0266. The Third 2020 Debenture was converted at the conversion price of $
0.0213
, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.
On
June 9, 2021, the Company issued an aggregate of
6,719,269
shares of Common Stock upon the conversion of $
200,000
of the principal
of, and $
1,578
of accrued interest on, the Second 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0237. The Second 2021 Debenture was converted at the conversion price of $
0.030
, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.
On
July 23, 2021, the Company issued an aggregate of
9,616,095
shares of Common Stock upon the conversion of $
150,000
of the principal
of, and $
3,858
of accrued interest on, the Second 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading
days was $0.0200. The Second 2021 Debenture was converted at the conversion price of $
0.0160
, which was the lower of the 2021 Fixed
Conversion Price and the 2021 Market Conversion Price.
For
other equity issuances during the nine months ended September 30, 2021 and the year ended December 31, 2020, please see Note 13,
Employees
, and Note 14,
Sponsorships.
F-
35
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 –
EMPLOYEES
On August 12, 2015, the Company
entered into an Employment Agreement with Robert Clark (the "Clark Employment Agreement"). On December 1, 2016, the
Company entered into an Amendment to Employment Agreement (the "Clark Amendment"; and, together with the Clark Employment
Agreement, the "Amended Clark Employment Agreement"). Pursuant to the terms of the Amendment Clark Employment Agreement,
the Company agreed to issue, among other securities,
200,000,000
shares of the Common Stock. Immediately, Mr. Clark decided to
defer receipt of
80,000,000
of such shares; thus leaving
120,000,000
shares of the Common Stock to be issued to him. Those 120,000,000
shares of the Common Stock were issued to Mr. Clark, as follows: (i) on October 28, 2015, the Company issued
30,000,000
of such
shares at the per-share fair market value of $
0.015
, based on the closing price of the Common Stock as reported by the OTCM on
the date of issuance; (ii) on March 2, 2016, the Company issued
40,000,000
of such shares at the per-share fair market value of
$
0.0250
based on the closing price of the Common Stock as reported by the OTCM on the date of issuance; and (iii) on Mary 16, 2016,
the Company issued
50,000,000
of such shares at the per-share fair market value of $
0.0036
based on the closing price of the Common
Stock as reported by the OTCM on the date of issuance. The Company accrued
80,000,000
shares of the Common Stock on December 31,
2016 that were not issued. At the date of accrual, the per-share fair market value of the shares was $
0.0025
based on the closing
price of the Common Stock as reported by the OTCM on the date of issuance. On April 19, 2018,
40,000,000
shares were cancelled
and returned to the Company for accrual valued at $
1,000,000
by Mr. Clark. On July 31, 2019, an additional
50,000,000
shares were
cancelled and returned to the Company for accrual valued at $
180,000
. Accordingly, as of September 30, 2020, Mr. Clark was the
record and beneficial owner of
17,100,000
of shares of the Common Stock and, subject to the July 2020 issuance to Mr. Clark of
140 shares of Series C Preferred, the Company accrued and owed to Mr. Clark an aggregate of
170,000,000
shares to be reissued to
him upon his request pursuant to the terms of the oral agreement with him.
The Company issued
5,000,000
shares of Common Stock on January 27, 2020 to Lori Radcliffe pursuant to that certain Employment Agreement dated October 7, 2019,
by and between Ms. Radcliffe and the Company. At the date of issuance, the per-share fair market value of the shares was $
0.0637
based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, for a total value of $
318,500
.
On
April 3, 2020, the Company issued
5,000,000
shares of the Common Stock to Paul O'Renick pursuant to an Employment Agreement
dated October 1, 2019 in exchange for compensation owed in the amount of $
157,500
for services provided. At the date of issuance,
the per-share fair market value was $
0.0315
based on the closing price of the Common Stock as reported by the OTCM on the date
of issuance.
The
Company issued
3,000,000
shares of Common Stock on July 30, 2020 to William J Stineman pursuant to that certain Employment Agreement
dated December 15, 2020, by and between Mr. Stineman and the Company. At the date of issuance, the per-share fair market value
of the shares was $
0.018
based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, for a
total value of $
54,000
.
The
Company issued
100,000
shares of Common Stock on July 30, 2020 to John Torrence pursuant to performance award by and between Mr.
Torrence and the Company. At the date of issuance, the per-share fair market value of the shares was $
0.018
based on the closing
price of the Common Stock as reported by the OTCM on the date of issuance, for a total value of $
1,800
.
NOTE 14 –
SPONSORSHIPS
On
May 1, 2019, the Company entered into a sponsorship agreement with Ryan Dodd, a professional waterski jumper (the "Dodd Agreement"),
whereby the Company agreed to pay monthly sponsorship fees of $
1,250
for one year. On May 23, 2019, the Company issued Mr. Dodd
262,500
shares of Common Stock. At the date of issuance, the shares of Common Stock had a fair market value of $
0.131
per share
based on the closing price of the Common Stock on the date of issuance as reported by the OTCM, representing $
34,388
as payment
for the Company's sponsorship. The Dodd Agreement was extended in January 2020 for an additional one-year term. On April
3, 2020, the Company issued
85,000
shares of the Common Stock to Ryan Dodd pursuant to the Dodd Agreement. At the date of issuance,
the per-share fair market value was $
0.0315
based on the closing price of the Common Stock as reported by the OTCM on the date
of issuance, representing a payment of $
2,578
for sponsorship fees.
NOTE 15 –
COMMITMENTS AND CONTINGENCIES
Liabilities for loss contingencies
arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability
has been incurred and the amount of the assessment can be reasonably estimated. The following represents the Company's commitments
and contingencies as of December 31, 2020:
F-
36
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Operating
Lease – The Company currently leases approximately 4,500 square feet of corporate office and warehouse space located at
746 North Drive, Suite A, Melbourne, Florida 32934. The lease is for a five-year term, and expires on May 31, 2023. The initial
monthly base rent was approximately $
3,994
, plus state taxes. The monthly base rent increases annually by three percent, beginning
on June 1, 2019 and each June 1st thereafter. During the lease year that commenced on June 1, 2020, the Company's monthly
base rent will be $
4,114
. For the three and nine months ended September 30, 2021, the Company recognized operating lease expense
of $
13,944
and $
36,643
, respectively, which is included in in selling, general and administrative expenses in the accompanying
Consolidated Statements of Loss.
NOTE 16 –
LEASE LIABILITIES
The Company reported the following
operating lease liabilities  as of September 30, 2021:
A.
Right-of-Use Operating Lease – On May 22, 2019, Kona Gold entered into a lease agreement for 30,000 square feet of office and warehouse space in Greer County, South Carolina. The agreement includes monthly payments of $
13,100
, and included a $
6,500
deposit. For the three and nine months ended September 30, 2021, the Company recognized right-of-use operating lease expense of $
40,287
and $
107,432
, respectively, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss.
B.
On March 17, 2020, Kona entered into a lease agreement for equipment. The agreement includes monthly payments of $
676
. For the three and nine months ended September 30, 2021, the Company recognized right-of-use operating lease expense of $
1,880
and $
5,605
, respectively, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss.
C.
Right-of-Use Operating Lease – On August 30, 2021, Gold Leaf entered into a lease agreement for 30,000 square feet of office and warehouse space in Conway, South Carolina. The agreement includes monthly payments of $
7,261
, and included a $
6,500
deposit. For the three and nine months ended September 30, 2021, the Company recognized
no
right-of-use operating lease expense, respectively, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss.
Amounts recognized as right-of-use
assets, net related to operating leases are included in noncurrent assets in the accompanying Consolidated Balance Sheet, while
related lease liabilities are included in current portion of long-term debt and long-term debt. At September 30, 2021 and December
31, 2020, the right-of-use asset and lease liability related to the operating leases were as follows:
September 30, 2021
December 31, 2020
Right-of-use asset
$
1,503,115
$
1,072,094
Amortization of right-of-use asset
(
284,012
)
(
159,101
)
Right-of-use asset, net
$
1,219,103
$
912,993
Operating lease liability
Current portion of long-term lease
$
41,806
$
149,407
Long-term lease
1,177,297
763,586
Total operating lease liability
$
1,219,103
$
912,993
F-
37
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The future payments due under
operating leases is as follows:
Fiscal year ending:
December 31, 2021 (3 months remaining)
41,806
December 31, 2022
230,954
December 31, 2023
242,966
December 31, 2024
251,127
December 31, 2025
254,282
2026 and thereafter
197,968
Operating Leases, Future Minimum Payments Due
$
1,219,103
NOTE 17 –
REVENUE
The Company determined that
the majority of the Company's revenue earned from its two reporting segments is recognized when it satisfies a single performance
obligation by transferring control of its products to a customer. The Company does not have a significant financing component or
payment terms, and the Company does not have any material unsatisfied performance obligations. The Company's revenues are
obtained in similar geographical locations within the United States. The Company's operating segments are expected to have
essentially the same future prospects, similar gross margins, sales trends, and the nature of our products and customers are essentially
the same. Furthermore, the Company regularly reviews disaggregated revenue by source for evaluating the financial performance of
its operations and making resource decisions. The Company's revenue is broken down by the following:
●
Distributors – revenue derived from direct sales to distributors for resale of its products: Kona Gold hemp-infused energy drinks, HighDrate CBD-infused energy waters, Storm CBD-infused water, and Ooh La Lemin lemonade beverages.
●
Amazon Sales – revenue derived from customer purchases through Amazon.com of our Kona Gold hemp-infused energy drinks.
●
Online Sales – revenue derived from customer purchases through the Company's websites: KonaGoldHemp.com, HighDrateMe.com, and drinklemin.com of the following products: Kona Gold hemp-infused energy drinks and apparel, HighDrate CBD-infused energy waters, Storm CBD-infused water, and Ooh La Lemin lemonade beverages.
●
Gold Leaf Distribution – revenue derived from Gold Leaf, which is the Company's wholly-owned subsidiary, that focuses on the distribution of premium beverages and snacks in key markets. These markets include over 600 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. Gold Leaf's product line includes alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company's current product offerings.
●
Shipping – revenue derived from shipping from direct sales of the Company's product through KonaGoldHemp.com, HighDrateMe.com, and drinklemin.com.
●
Sales Returns and Allowances – the amount reduced from all revenue sources to allow for product returns.
The following tables presents our net revenues,
by revenue source, and the period-over-period percentage change, for the period presented:
Three Months Ended September 30,
2020
2021
Revenue Source
Revenue
Revenue
% Change
Distributors
$
140,003
$
150,929
8
%
Amazon
46,078
41,669
(
10
)%
Online Sales
15,663
17,678
13
%
Gold Leaf Distribution
108,719
347,247
219
%
Shipping
8,846
4,451
50
%
Sales Returns and Allowances
(
6,600
)
(
16,599
)
152
%
Net Revenues
$
312,709
$
545,375
74
%
Nine Months Ended September 30,
2020
2021
Revenue Source
Revenue
Revenue
% Change
Distributors
$
367,912
$
784,023
113
%
Amazon
121,317
119,428
(
2
)%
Online Sales
35,176
57,725
64
%
Gold Leaf Distribution
228,881
883,825
286
%
Shipping
19,181
15,039
(
22
)%
Sales Returns and Allowances
(
30,655
)
(
61,041
)
99
%
Net Revenues
$
741,812
$
1,798,999
143
%
The following tables presents
our net revenues, by revenue source, as a percentage of total net revenues for the periods presented:
Three Months Ended September 30,
Revenues
2020
2021
Distributors and Resellers
45
%
28
%
Amazon
15
%
8
%
Online Sales
5
%
3
%
Gold Leaf Distribution
35
%
64
%
Shipping
3
%
1
%
Sales Returns, and Allowances
(
2
)%
(
3
)%
Nine Months Ended September 30,
Revenues
2020
2021
Distributors and Resellers
50
%
44
%
Amazon
16
%
7
%
Online Sales
5
%
3
%
Gold Leaf Distribution
31
%
49
%
Shipping
3
%
1
%
Sales Returns, and Allowances
(
4
)%
(
3
)%
F-
38
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 –
SEGMENTS
The Company has two reportable
segments:
●
Beverages.
Includes four types of beverage products: (i) hemp-infused energy drinks, (ii) CBD-infused energy water, (iii) CBD-infused high-alkaline water, and (iv) lemonade beverages, as well as apparel with the Kona Gold logo. The Beverages Segment includes all of Kona's and HighDrate's operations. The Company considers this a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying
C
onsolidated
F
inancial
S
tatements present financial information in a format that is consistent with the internal financial information used by management. We do not accumulate revenues by product classification and, therefore, it is impractical to present such information.
●
Distribution.
Includes the distribution of premium beverages and snacks in key markets. These markets include over 900 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. In addition to distributing the Company's own beverage products, the Company also distributes other products, including alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company's current product offerings. The Distribution Segment includes all of Gold Leaf's operations.
Amounts that do not relate
to a reportable segment have been allocated to "Corporate and Eliminations."
The following tables present
information about our reportable segments.
September 30, 2021
December 31, 2020
CURRENT ASSETS:
Beverages Segment
$
1,386,003
$
824,835
Distribution Segment
(
253,117
)
(
146,894
)
Corporate and eliminations
427,563
105,671
Total Current Assets
$
1,560,449
$
783,612
NON-CURRENT ASSETS:
Beverages Segment
$
2,216,976
$
1,063,074
Distribution Segment
638,620
85,546
Corporate and eliminations
7,968
8,233
Total Non-Current Assets
$
2,683,564
$
1,156,853
CURRENT LIABILITIES:
Beverages Segment
$
1,899,473
$
1,879,305
Distribution Segment
144,926
72,576
Corporate and eliminations
3,796,611
1,424,367
Total Current Liabilities
$
5,841,010
$
3,376,248
NON-CURRENT LIABILITIES:
Beverages Segment
$
2,993,658
$
2,616,018
Distribution Segment
654,434
192,350
Corporate and eliminations
—
—
Total Non-Current Liabilities
$
3,648,092
$
2,808,368
F-
39
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2021
2020
2021
REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES:
Beverages Segment
$
245,918
$
207,763
$
613,016
$
1,018,041
Distribution Segment
108,719
374,247
228,881
883,825
Corporate and Eliminations
(
41,928
)
(
36,635
)
(
100,085
)
(
102,867
)
Total Revenues, Net of Sales, Returns, and Allowances
$
312,709
$
545,375
$
741,812
$
1,798,999
COST OF REVENUES:
Beverages Segment
$
160,289
201,413
417,159
864,872
Distribution Segment
83,912
258,151
173,638
622,210
Corporate and Eliminations
(
22,090
)
(
16,798
)
(
67,023
)
(
43,355
)
Total Cost of Revenues
$
222,111
$
442,766
$
523,774
$
1,443,727
OPERATING EXPENSES:
Beverages Segment
$
339,688
$
514,995
$
1,380,612
$
1,308,456
Distribution Segment
70,385
152,578
198,547
353,239
Corporate and Eliminations
90,160
88,537
260,845
307,146
Total Operating Expenses
$
500,233
$
756,110
$
1,840,004
$
1,968,841
OTHER INCOME / (EXPENSE):
Beverages Segment
$
(
19,455
)
$
(
34,964
)
$
(
35,887
)
$
11,964
Distribution Segment
(
1,173
)
(
1,708
)
3,932
4,041
Corporate and Eliminations
(
79,178
)
(
1,540,542
)
(
517,371
)
(
2,825,835
)
Total Other Income / (Expense)
$
(
99,806
)
$
1,577,214
$
(
549,326
)
$
(
2,809,830
)
NET LOSS:
Beverages Segment
$
(
273,514
)
$
(
543,609
)
$
(
1,220,642
)
$
(
1,167,251
)
Distribution Segment
(
46,751
)
(
38,190
)
(
139,372
)
(
87,583
)
Corporate and Eliminations
(
189,176
)
(
1,648,916
)
(
811,278
)
(
3,168,565
)
Total Net Loss
$
(
509,441
)
$
(
2,230,715
)
$
(
2,171,292
)
$
(
4,423,399
)
NOTE 19 –
ACQUISITION OF S AND S BEVERAGE, INC.
On
January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S
and its shareholders
and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger with the Wisconsin Department
of Financial Institutions (the "Merger Certificate") on February 1, 2021. On January 22, 2021, (i) Kona Gold, (ii)
KGS Temporary Company, Inc. (Kona Gold Beverage, Inc. "Acquisition Subsidiary"), (iii) S and S, (iv) William J. Stineman
and K&L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders), and (v) Mr. Stineman
(as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the "Merger Agreement").
S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned subsidiary
of Kona Gold Beverage, Inc.
Pursuant
to the Merger Agreement, and subject to the terms and conditions contained therein,
we
acquired all of the shares of capital stock of S and S from the five S and S Legacy Shareholders. In consideration thereof, we
issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.'s common stock (the
"Acquisition Stock") on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights in respect
of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the "Aggregate Acquisition
Payments"), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy
Shareholders) and approximately $
89,000
of which (the "Remaining Acquisition Payments") is allocated to the five S and S Legacy Shareholders on a pro rata
basis. $
400,000
of the Aggregate Acquisition Payments are scheduled to be paid in the next two weeks. The balance of the Aggregate Acquisition
Payments, including the Remaining Acquisition Payments, are scheduled to be paid in monthly installments, in arrears on the tenth
calendar day of each month, commencing on March 10, 2021, at a rate equivalent to $
2.00
per case of Lemin Superior Lemonade (the product line of S and S that we have now branded as Ooh La Lemin) that we sell until the Aggregate Acquisition Payments have been
paid in full. In addition to the Aggregate Acquisition Payments, we also assumed and agreed to pay certain other liabilities of S
and S as set forth in the Merger Agreement.
The following is a balance
sheet comparison of S and S as of January 21, 2021:
F-
40
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet
Book Value
Fair Value
Accounts receivable, net of allowance of $24,280
$
9,437
$
33,717
Inventory
240,797
249,648
Property, plant and equipment, net (Website Development)
12,201
12,201
Total Assets
$
262,435
$
295,566
Accounts payable and accrued liabilities
$
55,553
$
956
Outstanding checks
23,058
—
Interest payable
11,915
—
Due to customers
19,667
—
Current note payable - related party
811,761
1,050,000.00
Common Stock, $30.05 par value, 10,000 shares issued and outstanding, respectively
300,500
Additional paid-in-capital
437,701
Accumulated deficit
(
1,397,720
)
Total liabilities and stockholders' deficit
$
262,435
The following are the accounts
included in the Company's accompanying balance sheet dated March 31, 2021 as a result of the S and S transaction:
Balance Sheet
Accounts receivable
$
33,717
Website Development (Ooh La Lemin)
12,201
Goodwill
1,275,938
Total Assets
$
1,321,856
Accounts payable and accrued liabilities
$
956
Loan on Acquisition
650,000
Due to merger payments
400,000
Common stock, $.00001 par value, 9,000,000 shares issued
90
Additional paid-in capital
270,810.00
Total liabilities and stockholders' deficit
$
1,321,856
F-
41
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 –
GOING CONCERN
The accompanying Consolidated
Financial Statements 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. As reflected in the accompanying Consolidated Financial Statements,
during the three months ending September 30, 2021, the Company incurred a net loss of approximately $2.2
million,
and during the nine months ending September 30, 2021, incurred a net loss of approximately $4.4 million
,
used cash in operations of approximately $1.5 million
1,586,677
and had a stockholders' deficit of $5,065,089 as
of September 30, 2021. In the year ending December 31, 2020, the Company incurred a net loss of $
3,125,595
,
used cash in operations of $
1,370,123
and
had a stockholders' deficit of $
4,244,153
as
of December 31, 2020.
The Company attributes this
significant increase to losses incurred from corporate related expenses during the nine months ending September 30, 2021. During
the first and third quarters of fiscal 2021, the Company signed two separate Securities Purchase Agreement, whereas, the Company
incurred interest expense to related warrants on both convertible notes and a loss on the related derivatives, which were integral
to the growth of the Company. During the third quarter, the Company attributes the increase to costs related to both our Beverage
Segment and Distribution Segment of selling, general and administrative expenses, specifically salaries, which are integral to
the success of the Company. In addition, corporate-related expenses, specifically audit related and legal expenses related to securities
in the current year that are integral to the success of our Company. The Company continued to be impacted by the COVID-19 pandemic
during the third quarter of the 2021 fiscal year as the Company continued to have logistical delays in delivery of our products
to customers. In addition, the Company has experienced delays in obtaining product related to logistical delays. Despite the increase
in losses and impacts from COVID-19, the Company realized an increase in sales in the first three quarters of fiscal 2021 over
the previous first three quarters of fiscal 2020. The Company attributes this to the acquisition of S and S, which has added to
the Company's portfolio. In addition, the Company has signed more favorable agreements with larger, reputable tier 1 and
mid-size distributors and grocery chains that had unforeseen delays and had been impacted by the COVID-19 pandemic. In addition,
we also attribute the increase in sales to our Distribution Segment which has seen approximately 286% increase in the first three
quarters of fiscal 2021 over the previous first three quarters of fiscal 2020; and approximately 244% increase in the three months
ending September 30, 2021 over the three months ending September 30, 2020. We expect that revenue will increase during the balance
of fiscal 2021 as distribution related to our current distributors that had been affected by COVID-19, but have resumed more normal
distribution, are seeing fewer forward-looking impacts from the COVID-19 pandemic. The Company expects that it will continue to
enter into additional, larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverage Segment
during the balance of fiscal 2021, and our Distribution Segment will continue to see growth with the expansion of a new location.
As a result, the Company's
continuation as a going concern is dependent on the ability to obtain additional financing until we can generate sufficient cash
flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our
operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the
amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result
in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans
would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts
and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to
scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their
investment. The accompanying Consolidated Financial Statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
NOTE 21 –
CONCENTRATIONS
The Company had certain customers
whose revenue individually represented 10% or more of the Company's total revenue, less intercompany transactions. In addition,
certain customers had outstanding accounts receivables that individually represented 10% or more of the Company's total outstanding
accounts receivables, less intercompany transactions, but before receivable allowances. These customers are as follows:
F-
42
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In the accompanying Consolidated
Balance Sheet as of September 30, 2021, the Company's net accounts receivable were $
63,715
, representing total accounts receivable
of approximately $
139,203
, less sales returns and allowance of approximately $
61,041
, less doubtful accounts of approximately $
7,709
,
and less intercompany transactions of approximately $
6,738
. In the accompanying Consolidated Balance Sheet as of December 31, 2020,
the Company's net accounts receivable were $(
10,508
), representing total accounts receivable of approximately $
22,166
less
sales returns and allowance of approximately $
28,707
and less doubtful accounts of approximately $
3,967
. The breakdown of the Company's
accounts receivable is as follows:
September 30, 2021
December 31, 2020
Total Accounts Receivable
$
139,235
$
22,166
Less: Sales Returns and Allowances
61,041
28,707
Less: Doubtful Accounts
7,709
3,967
Less: Intercompany Transactions
6,738
—
Accounts Receivable, net
$
63,715
$
(
10,508
)
The Company determined that
four customers accounted for approximately
70
% (or approximately
25
%,
20
%,
13
% and
12
%), or an aggregate of $
97,832
, of the outstanding
total accounts receivable of $139,235 as of September 30, 2021. The Company determined that four customers accounted for approximately
76
% (or approximately
26
%,
22
%,
14
% and
14
%), or an aggregate of $16,904, of the outstanding total accounts receivable of $
22,166
as of December 31, 2020.
In the accompanying Consolidated
Statements of Loss for
the three months ended September 30, 2021, one customer represented 12% of the Company's total net
revenue of $545,375 for the three months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the
three months ended September 30, 2020, no one customer represented 10% of the Company's total net revenue of $312,709 for
the three months ended September 30, 2020. In the accompanying Consolidated Statements of Loss for the nine months ended September
30, 2021, one customer represented 13% of the Company's total net revenue of $1,798,999 for the nine months ended September
30, 2021. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2020, no one customer represented
10% or more of the Company's total net revenue of $741,812 for the nine months ended September 30, 2020
.
F-
43
Kona Gold Beverage, Inc.
(formerly known as Kona Gold Solutions, Inc.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The raw materials used in the
production of the Company's products are obtained by the Company's co-packers and consist primarily of materials such
as the flavors, caffeine, sugars or sucralose, taurine, vitamins, CBD, and hemp seed protein contained in its beverages, the bottles
and cans in which its beverages are packaged, and the labeling on the outside of its beverages. These principal raw materials are
subject to price and availability fluctuations. The Company currently relies on a few key co-packers, which in turn rely on a few
key suppliers. The Company continually endeavors to have back-up co-packers, which co-packers would in turn depend on their third-party
suppliers to supply certain of the flavors and concentrates that are used in the Company's beverages. The Company is also
dependent on these co-packers to negotiate arrangements with their existing suppliers that would enable the Company to obtain access
to certain of such concentrates or flavor formulas under certain extraordinary circumstances. Additionally, in a limited number
of cases, the Company's co-packers may have contractual restrictions with their suppliers or the Company's co-packers
may need to obtain regulatory approvals and licenses that may limit the co-packers' ability to enter into agreements with
alternative suppliers. Contractual restrictions in the agreements the Company has with certain distributors may also limit the
Company's ability to enter into agreements with alternative distributors. The Company believes that a satisfactory supply
of co-packers will continue to be available at competitive prices, although there can be no assurance in this regard. With respect
to Gold Leaf's operations, the Company continually endeavors to contract with additional beverage vendors to ensure the Company
has adequate inventory. The Company believes that a satisfactory supply of vendors will continue to be available at competitive
prices, although there can be no assurance in this regard.
The Company had certain vendors
that individually represented 10% or more of the Company's inventory purchases. For the three months ended September 30,
2021, the Company purchased 29% of its inventory from two vendors. Of these vendors, $
45,242
is due to these vendors as of the
balance sheet dated September 30, 2021. For the year ended December 31, 2020, the Company did not purchase in excess of 10% of
its inventory from any single vendor.
NOTE 22 –
SUBSEQUENT EVENTS
Management
has evaluated subsequent events through November 15, 2021, the date that the September 30, 2021 Consolidated Financial Statements
were issued, and has determined the following events have occurred that would warrant additional disclosure:
(1)
On October 4, 2021, the Company issued an aggregate of
16,127,104
shares of Common Stock upon the conversion of $
150,000
of the principal of, and $
48,751
of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $
0.0152
. The First 2021 Debenture was converted at the conversion price of $
0.0122
, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.
(2)
On October 14, 2021, the Company issued an aggregate of
17,688,056
shares of Common Stock upon the conversion of $
200,000
of the principal of, and $
1,643
of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $
0.0143
. The First 2021 Debenture was converted at the conversion price of $
0.0114
, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.
(3)
On October 25, 2021, the Company issued an aggregate of
16,124,161
shares of Common Stock upon the conversion of $
150,000
of the principal of, and $
1,567
of accrued interest on, the First 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $
0.0118
. The First 2021 Debenture was converted at the conversion price of $
0.0094
, which was the lower of the 2021 Fixed Conversion Price and the 2021 Market Conversion Price.
(4)
On November 2, 2021, the Company completed a private placement transaction pursuant to the August 2021 SPA, the purchase price for the August 2021 Debenture was $
1,500,000
, less $
60,000
for origination fees, which consisted of the "original issue discount" of $
60,000
.
(5)
On November 10, 2021, the Company issued an aggregate of
27,228,433
shares of Common Stock upon the conversion of $
200,000
of the principal of, and $
1,490
of accrued interest on, the First February 2021 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $
0.0093
. The First February 2021 Debenture was converted at the conversion price of $
0.0074
, which was the lower of the 2021 February Fixed Conversion Price and the 2021 February Market Conversion Price.
F-
44
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For a description of our significant
accounting policies and an understanding of the significant factors that influenced our performance during the three months and
nine months ended September 30, 2021, this "Management's Discussion and Analysis of Financial Condition and Results
of Operations" (hereafter referred to as "MD&A") should be read in conjunction with the unaudited consolidated
financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as
our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the "2020 Form 10-K").
Note about Forward-Looking Statements
This Quarterly Report on Form 10-Q includes
statements that constitute "forward-looking statements." These forward-looking statements are often characterized by
the terms "may," "believes," "projects," "intends," "plans," "expects,"
or "anticipates," and do not reflect historical facts.
Specific forward-looking statements
contained in this portion of the Quarterly Report include, but are not limited to: (i) statements that are based on current projections
and expectations about the markets in which we operate, (ii) statements about current projections and expectations of general economic
conditions, (iii) statements about specific industry projections and expectations of economic activity, (iv) statements relating
to our future operations, prospects, results, and performance, (v) statements about the Chapter 11 Case, (vi) statements that the
cash on hand and additional cash generated from operations together with potential sources of cash through issuance of debt or
equity will provide the Company with sufficient liquidity for the next 12 months, and (vii) statements that the outcome of pending
legal proceedings will not have a material adverse effect on business, financial position and results of operations, cash flow
or liquidity.
Forward-looking statements involve risks,
uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. Factors and risks that could affect our results, future performance
and capital requirements and cause them to materially differ from those contained in the forward-looking statements include those
identified in our 2020 Form 10-K under Item 1A "Risk Factors", as well as other factors that we are currently unable
to identify or quantify, but that may exist in the future.
In addition, the foregoing factors
may generally affect our business, results of operations and financial position. Forward-looking statements speak only as of the
date the statements were made. We do not undertake and specifically decline any obligation to update any forward-looking statements.
Any information contained on our websites
www.konagoldbeverage.com
,
www.konagoldhemp.com
,
www.highdrateme.com
,
and
www.goldleafdist.com
or any other websites referenced in this Quarterly
Report are not part of this Quarterly Report.
45
We undertake no obligation to update
or revise any of the forward-looking statements after the date of this to confirm forward-looking statements to actual results.
Important factors on which such statements are based are assumptions concerning uncertainties, including, but not limited to, uncertainties
associated with the following:
●
Inadequate
capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
●
Our
failure to earn revenues or profits;
●
Volatility
or decline of our stock price;
●
Potential
fluctuation in our financial results;
●
Rapid
and significant changes in markets;
●
Litigation
with or legal claims and allegations by outside parties;
●
Impacts
from the COVID-19 pandemic; and
●
Insufficient
revenues to cover operating costs.
The following discussion should be read
in conjunction with the financial statements and the notes thereto. This discussion contains forward-looking statements that involve
risks, uncertainties, and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking
statements included in this discussion as a result of various factors.
Results of Operations
Overview
Our business has grown rapidly since
inception, and we anticipate that our business will continue to grow; however, the year ended December 31, 2020, the Company saw
unforeseen delays in signing more favorable agreements with larger, reputable tier 1 and mid-size distributors and grocery chains
and we were additionally impacted by the COVID-19 pandemic during the fiscal year. The COVID-19 delayed the Company's launch
of a variety of new products during most of the 2020 fiscal year – drinks and non-drink line broadening items. Our Beverages
Segment has three main revenue streams: product sales from online consumers, product sales through resellers, and product sales
from distributors. Product sales include sales of our energy drinks, HighDrate CBD-infused energy waters, and apparel such as t-shirts
and hats. In early 2019, we expanded our operations with the creation of a distribution center, which now functions as our Distribution
Segment. Our Distribution Segment has one main revenue stream: product sales to convenience stores, grocery stores, or smoke and
gift shops, which complement our current product offering. Product sales include sales of our beverages, as well as beverages and
snacks purchased for resale from several other beverage producers.
We have experienced and expect to continue
to experience substantial growth in our operations as we seek to expand with additional products and acquisitions that complement
our current product offerings. We expect that revenue will continue to increase in the balance of fiscal year 2021 as distribution
related to our current distributors affected by COVID-19 that have resumed distribution, will continue to see fewer impacts from
the COVID-19 pandemic going forward. COVID-19 continues to impact the Company in fiscal year 2021 with logistical delays in delivery
of our products to customers. In addition, the Company has experienced delays in obtaining product related to logistical delays.
Despite the impact from COVID-19 on our revenues in the fiscal year 2020 and 2021, we still anticipate to sign larger, more favorable
agreements with larger, tier 1 and mid-size distributors in our Beverages Segment in the remaining quarter of fiscal 2021. Additionally,
we expect that our Distribution Segment will continue to see growth with the expansion of a new location. The following is a more
detailed discussion of our financial condition and results of operations for the period presented.
46
Three Months Ended September 30,
2021 compared to the Three Months Ended September 30, 2020
Overview
As reflected in the accompanying financial
statements, during the three months ended September 30, 2021, we incurred a net loss of approximately $2.2 million, compared to
a net loss of approximately $509,400 for the three months ended September 30, 2020. As of September 30, 2021, we had a stockholders'
deficit of approximately $5.1 million.
The following is a more detailed discussion
of our financial condition and results of operations for the period presented, along with prior periods.
Revenue
The following table presents our net
revenues, by revenue source, and the period-over-period percentage change, for the period presented:
Three Months Ended September 30,
2020
2021
Revenue Source
Revenue
Revenue
% Change
Distributors and Resellers
$
140,003
$
150,929
8
%
Amazon
46,078
41,669
(10
)%
Online Sales
15,663
17,678
13
%
Gold Leaf Distribution
108,719
347,247
219
%
Shipping
8,846
4,451
(50
)%
Sales Returns and Allowances
(6,600
)
(16,599
)
152
%
Net Revenues
$
312,709
$
545,375
74
%
The following table presents our net
revenues, by revenue source, as a percentage of total net revenues for the periods presented:
Three Months Ended September 30,
Revenues
2020
2021
Distributors and Resellers
45
%
28
%
Amazon
15
%
8
%
Online Sales
5
%
3
%
Gold Leaf Distribution
35
%
64
%
Shipping
3
%
1
%
Sales Returns and Allowances
(2
)%
(3
)%
During the three months ended September 30,
2021, we reported net revenues of approximately $545,400, which is an increase of approximately $232,700, or approximately 74%,
compared to net revenues of approximately $312,700 for the three months ended September 30, 2020. A decrease of approximately $40,900
was attributed to our Beverages Segment, while our Distribution Segment reported an increase in net revenue of approximately $265,500.
We attribute this decrease in our Beverages Segment sales to unforeseen production delays in our product line from our copackers.
In addition, our Beverages Segment continued to be impacted by the COVID-19 pandemic during the third quarter of the 2021 fiscal
year as we continued to have logistical delays in delivery of our products to customers. The Company has also continued to experience
delays in obtaining product for production related to logistical delays. We attribute the increase in revenues in our Distribution
Segment to increasing our distribution area, broadening our drinks and non-drink line, and distribution agreements. We expect that
revenue will increase in the last quarter of the fiscal year 2021 as we will continue to see fewer impacts from the COVID-19 pandemic
going forward. We anticipate to sign larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverages
Segment during the remaining quarter of fiscal 2021. Additionally, we anticipate our Distribution Segment will continue to see
growth with the expansion of a new location and additional sales employees to distribute our drink and non-drink line.
47
Cost of Revenues
Cost of revenues consists primarily
of expenses associated with products sold to distributors and resellers, including product and shipping costs. Costs also include
credit card fees, fees incurred for sales that occur on Amazon.com, and other transaction fees related to the processing of consumer
transactions. Typically, we expect that the cost of revenues will increase as a direct correlation to increases in sales. Thus,
our cost of revenues increases on an absolute basis versus on a percentage of sales basis. At the same time, when sales increase,
thereby increasing our orders with our co-packers, our cost of products decreases because of the volume discounts we receive from
our co-packers.
During the three months ended September
30, 2021, we reported cost of revenues of approximately $442,800, which is an increase of approximately $220,700, or approximately
99%, compared to approximately $222,100 for the three months ended September 30, 2020. This increase is attributed to an increase
in sales in Distribution Segment in the third quarter of fiscal 2021, compared to the prior year period. The cost of sales increase
was larger than the increase in sales. This is primarily attributed to an increased cost in obtaining our ingredients for our product
line in our Beverages Segment, an increased cost for production of our product in our Beverages Segment, and an increased cost
of shipping our product in our Beverages Segment. We expect that we will continue, to see an increased cost of sales in excess
of the expected increase in sales for the remaining quarter of fiscal year 2021, as the cost of shipping our products continues
to remain high. The Company continues to seek alternative methods to reduce costs for production and the cost of shipping our products.
Selling, General and Administrative
Expenses
SG&A expenses consist primarily
of professional fees, salaries and wages, advertising, rent, travel expenses, sponsorships, and general office and administrative
expenses related to maintaining our facilities.
SG&A expenses were approximately
$756,100 for the three months ended September 30, 2021, compared to approximately $500,200 in the three months ended September
30, 2020, an increase of $255,900, or approximately 51%. The increase in SG&A expenses was primarily due to an increase in
salaries and wages of 77% attributed to both our Beverages Segment and Distribution Segment; an increase in professional fees of
335% attributed to our Beverages Segment; an increase in our advertising and promotion expenses of 295% attributed to both our
Beverages Segment and Distribution Segment; an increase in vehicles expenses of 102% attributed to our Distribution Segment; and
an increase in travel expenses of 278% attributed to both our Beverages Segment and Distribution Segment. These increases were
offset by a decrease in bad debt expense of 105% attributed to our Beverages Segment.
48
Salaries and wages were approximately
$382,900 in the three months ended September 30, 2021, compared to approximately $216,700 for the three months ended September
30, 2020, an increase of approximately $166,200, which was attributed to both our Beverages Segment (approximately $120,000) and
our Distribution Segment (approximately $46,100). This increase was the result of hiring additional employees, who are pivotal
to the success of our Company. Professional fees were approximately $90,400 for the three months ended September 30, 2021, compared
to $20,800 for the three months ended September 30, 2020, an increase of approximately $69,700, which was attributed to our corporate-related
activities. This increase was the result of raising capital that we believed was necessary for our anticipated growth. Advertising
and promotion expenses were approximately $21,600 for the three months ended September 30, 2021, compared to approximately $5,500
for the three months ended September 30, 2020, an increase of approximately $16,100. This increase was attributed to both our Beverages
Segment and Distribution Segment and the result of promoting drink and non-drink product lines through samples, trade shows and
events, and store displays. Vehicle expense was approximately $29,400 in the three months ended September 30, 2021, compared to
approximately $14,600 for the three months ended September 30, 2020, an increase of approximately $14,800, which was attributed
to our Distribution Segment. Additional delivery vehicles were purchased during fiscal year 2021 and, with the increase in the
number of delivery vehicles, our cost of general repairs and maintenance made to our delivery vehicles, as a group, increased.
Travel expenses were approximately $10,400 for the three months ended September 30, 2021, compared to approximately $2,700 for
the three months ended September 30, 2020, an increase of approximately $7,600. This increase was attributed to both our Beverages
Segment and Distribution Segment and the result of promoting drink and non-drink product lines at trade shows and events for Beverages
Segment, and travel related to the expansion of our Distribution Segment. This increase was offset by a decrease in bad debt expense,
which was approximately $(2,100) in the three months ended September 30, 2021, compared to approximately $38,900 for the three
months ended September 30, 2020, a decrease of approximately $41,000, which was primarily attributed to our Beverages Segment.
This decrease was the result of a decrease in uncollectible accounts and a decrease in the allowance for uncollectible accounts
in the three months ended September 30, 2021, compared to three months ended September 30, 2020, which was related to outstanding
invoices from distributors impacted by the COVID-19 pandemic during the third quarter of the 2020 fiscal year.
We expect that we will continue to expand
our business, operations, and incur additional SG&A expenses related to operations in both our Beverages Segment and Distribution
Segment. Additionally, corporate-related expenses associated with having our Common Stock quoted on the OTCQB and being required
to file certain reports and other information with the SEC. We anticipate hiring additional personal in the remaining quarter of
fiscal 2021 who, we expect, will be are integral to the success of our growing Company.
Net Loss
We incurred a net loss of approximately
$2.2 million for the three months ended September 30, 2021, an increase of approximately $1.7 million compared to the previous
three months ending September 30, 2020, which had a net loss of approximately $509,400. This net loss in the three months ended
September 30, 2021 is primarily related to our to corporate-related expenses, which include interest expense related to the Warrants
issued in connection with the Debentures and non-cash expense on our derivative liability. The fair value of the Debentures are
re-measured each reporting period until the Debentures are either converted or expire. In each reporting period during the term
of the Debentures, the change in the fair value will either be recognized as a non-cash expense or non-cash income. The change
in the fair value of the Debentures is not impacted by our actual operations but instead is strongly tied to the change in the
market value of our Common Stock.
Nine Months Ended September 30,
2021 compared to the Nine Months Ended September 30, 2020
Overview
As reflected in the accompanying financial
statements, during the nine months ended September 30, 2021, we incurred a net loss of approximately $4.4 million and used cash
in operations of approximately $1.6 million, compared to a net loss of approximately $2.2 million and used cash in operations of
approximately $6878,600 for the nine months ended September 30, 2020. As of September 30, 2021, we had a stockholders' deficit
of approximately $5.1 million.
The following is a more detailed discussion
of our financial condition and results of operations for the period presented, along with prior periods.
49
Revenue
The following table presents our net
revenues, by revenue source, and the period-over-period percentage change, for the period presented:
Nine Months Ended September 30,
2020
2021
Revenue Source
Revenue
Revenue
% Change
Distributors and Resellers
$
367,912
$
784,023
113
%
Amazon
121,317
119,428
(2
)%
Online Sales
35,176
57,725
64
%
Gold Leaf Distribution
228,881
883,825
286
%
Shipping
19,181
15,039
(22
)%
Sales Returns and Allowances
(30,655
)
(61,041
)
99
%
Net Revenues
$
741,812
$
1,798,999
143
%
The following table presents our net
revenues, by revenue source, as a percentage of total net revenues for the periods presented:
Nine Months Ended September 30,
Revenues
2020
2021
Distributors and Resellers
50
%
44
%
Amazon
16
%
7
%
Online Sales
5
%
3
%
Gold Leaf Distribution
31
%
49
%
Shipping
3
%
1
%
Sales Returns, and Allowances
(4
)%
(3
)%
During the nine months ended September
30, 2021, we reported net revenues of approximately $1,799,000, which is an increase of approximately $1,057,100, or approximately
143%, compared to net revenues of approximately $741,800 for the nine months ended September 30, 2020. An increase of approximately
$404,700 was attributed to our Beverages Segment, while our Distribution Segment reported an increase in net revenues of approximately
$654,900. We attribute this increase in sales to an effort to sign more favorable agreements with larger, reputable tier 1 and
mid-size distributors and grocery chains. These contracts saw unforeseen delays and were additionally impacted by the COVID-19
pandemic during the fiscal year. The COVID-19 delayed the Company's launch of a variety of new products during most of the
2020 fiscal year – drinks and non-drink line broadening items. We attribute this decrease in our Beverages Segment sales
to unforeseen production delays in our product line from our copackers. In addition, our Beverages Segment continued to be impacted
by the COVID-19 pandemic during the nine months ended September 30, 2021 as we continued to have logistical delays in delivery
of our products to customers. The Company has also continued to experience delays in obtaining product for production related to
logistical delays. We also attribute this increase to the acquisition of a beverage company in the first quarter of fiscal 2021
that broadened our drink product line in our Beverages Segment. We attribute the increase in revenues in our Distribution Segment
to increasing our distribution area, broadening our drinks and non-drink line, and distribution agreements. We expect that revenue
will increase in the last quarter of the fiscal year 2021 as we will continue to see fewer impacts from the COVID-19 pandemic going
forward. We anticipate to sign larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverages
Segment during the remaining quarter of fiscal 2021. Additionally, we anticipate our Distribution Segment will continue to see
growth with the expansion of a new location and additional sales employees to distribute our drink and non-drink line.
Cost of Revenues
Cost of revenues consists primarily
of expenses associated with products sold to distributors and resellers, including product and shipping costs. Costs also include
credit card fees, fees incurred for sales that occur on Amazon.com, and other transaction fees related to the processing of consumer
transactions. Typically, we expect that the cost of revenues will increase as a direct correlation to increases in sales. Thus,
our cost of revenues increases on an absolute basis versus on a percentage of sales basis. At the same time, when sales increase,
thereby increasing our orders with our co-packers, our cost of products decreases because of the volume discounts we receive from
our co-packers.
50
During the nine months ended September
30, 2021, we reported cost of revenues of approximately $1,443,700, which is an increase of approximately 920,000, or approximately
176%, compared to approximately $523,800 for the nine months ended September 30, 2020. This increase is attributed to an increase
in sales in both our Beverages Segment and Distribution Segment in the second quarter of fiscal 2021, compared to the prior year
period. The cost of sales increase was larger than the increase in sales. This is attributed to an increased cost in obtaining
our ingredients for our product line in our Beverages Segment, an increased cost for production of our product in our Beverages
Segment, and an increased cost of shipping our product in our Beverages Segment. We expect that we will continue to an increased
cost of sales larger than the increase in sales for the remaining quarter of fiscal year 2021 as the cost of shipping our product
continues to remain high. The Company continues to seek alternative methods to reduce costs for production and the cost of shipping
our product.
Selling, General and Administrative
Expenses
SG&A expenses consist primarily
of professional fees, salaries and wages, advertising, rent, travel expenses, sponsorships, and general office and administrative
expenses related to maintaining our facilities.
SG&A expenses were approximately
$1,968,900 for the nine months ended September 30, 2021, compared to approximately $1,840,000 in the nine months ended September
30, 2020, an increase of $128,800, or approximately 9%. The increase in SG&A expenses was primarily due to an increase in legal
and accounting fees of 22% attributed to our corporate-related expenses; an increase of 28% in rent expense attributed to both
our Beverages Segment and our Distribution Segment; an increase in professional fees of 308% attributed to our corporate-related
activities; an increase in insurance of 192% attributed to both our Beverages Segment; an increase in our advertising and promotion
expenses of 118% attributed to both our Beverages Segment and Distribution Segment; and a 47% increase in OTCM fees attributed
to corporate-related expenses. These increases were offset by a decrease in salaries and wages of 20% attributed to our Beverages
Segment; a decrease in sponsorships of 49% attributed to our Beverages Segment; and a decrease in bad debt expense of 49% attributed
to our Beverages Segment.
Legal and accounting fees were approximately
$277,500 for the nine months ended September 30, 2021, an increase of approximately $49,400, compared to approximately $228,100
for the nine months ended September 30, 2020, which was attributed to our corporate-related activities. This increase was the result
of audit related and legal expenses related to securities in the current year that integral to the success of our growing Company.
Rent expenses were approximately $150,000 for the nine months ended September 30, 2021, compared to approximately $117,000 for
the nine months ended September 30, 2020, an increase of approximately $33,000. This increase was attributed to both our Beverages
Segment and our Distribution Segment and the result of our moving to a larger warehouse facility that was necessary due to our
anticipated growth. Professional fees were approximately $185,900 for the nine months ended September 30, 2021, compared to approximately
$45,300 for the nine months ended September 30, 2020, an increase of approximately $139,600, which was attributed to our corporate-related
activities. Insurance expense was approximately $29,600 for the nine months ended September 30, 2021, compared to approximately
$10,100 for the nine months ended September 30, 2020, an increase of approximately $19,400. This increase was attributed to our
Beverages Segment and the result of signing larger, more favorable agreements with larger, tier 1 and mid-size distributors and
customers. Advertising and promotion expenses were approximately $45,700 for the nine months ended September 30, 2021, compared
to approximately $21,000 for the nine months ended September 30, 2020, an increase of approximately $24,700. This increase was
attributed to both our Beverages Segment and Distribution Segment and the result of promoting drink and non-drink product lines
through samples, trade shows and events, and store displays. OTCM fees attributed to corporate-related expenses were approximately
$75,000 for the nine months ended September 30, 2021, compared to approximately $50,900 for the nine months ended September 30,
2020, an increase of approximately $24,100. This increase was the result of fees paid to the OTCM to have our Common Stock quoted
on the OTCQB versus the OTC Pink. These increases were offset by a decrease in salaries and wages, which were approximately $904,300
in the nine months ended September 30, 2021, compared to approximately $1.1 million for the nine months ended September 30, 2020,
a decrease of approximately $226,900, which was attributed primarily to our Beverages Segment. This decrease was the result of
issuance of shares of our Common Stock made in the prior year to employees pursuant to their agreements. Sponsorships were approximately
$12,200 in the nine months ended September 30, 2021, compared to approximately $23,800 for the nine months ended September 30,
2020, a decrease of approximately $11,600, which was attributed to our Beverages Segment. This decrease was the result of terminating
sponsorships that were no longer advantageous to the Company. Bad debt was approximately $21,200 in the nine months ended September
30, 2021, compared to approximately $41,600 for the nine months ended September 30, 2020, a decrease of approximately $20,400,
which was attributed to our Beverages Segment. This decrease was the result of a decrease in uncollectible accounts and a decrease
in the allowance for uncollectible accounts in the nine months ended September 30, 2021, compared to the nine months ended September
30, 2020, which was related to outstanding invoices from distributors impacted by the COVID-19 pandemic during the first three
quarters of the 2020 fiscal year.
51
We expect that we will continue to expand
our business, operations, and incur additional SG&A expenses related to operations in both our Beverages Segment and Distribution
Segment. Additionally, corporate-related expenses associated with having our Common Stock quoted on the OTCQB and being required
to file certain reports and other information with the SEC. We anticipate hiring additional personal in the remaining quarter of
fiscal 2021 who, we expect, will be integral to the success of our growing Company.
Net Loss
We incurred a net loss of approximately
$4.4 million for the nine months ended September 30, 2021, an increase of approximately $2.2 million compared to the previous year
nine months ending September 30, 2020, which had a net loss of approximately $2.2 million. This net loss is primarily corporate-related
expenses that are necessary for our growth, which include interest expense related to the Warrant issued in connection with the
Debentures and non-cash expense on our derivative liability. The fair value of the Debentures will be re-measured each reporting
period until the Debentures are either converted or expire. In each reporting period during the term of the Debentures, the change
in the fair value will either be recognized as a non-cash expense or non-cash income. The change in the fair value of the Debentures
is not impacted by our actual operations but instead is strongly tied to the change in the market value of our Common Stock.
Segments – Three and Nine
Months Ended September 30, 2021 and 2020
For the three and nine months ended
September 30, 2021 and 2020, we had two reportable segments: (i) Beverages Segment and (ii) Distribution Segment. Amounts that
are not allocated to either of these reportable segments are reported in "Corporate and Eliminations." We evaluate
performance and allocate resources based on net revenue, cost of revenues, and gross profit. Information regarding the operations
of these reportable segments is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2021
2020
2021
REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES:
Beverages Segment
$
245,918
$
207,763
$
613,016
$
1,018,041
Distribution Segment
108,719
374,247
228,881
883,825
Corporate and Eliminations
(41,928
)
(36,635
)
(100,085
)
(102,867
)
Total Revenues, Net of Sales, Returns, and Allowances
$
312,709
$
545,375
$
741,812
$
1,798,999
COST OF REVENUES:
Beverages Segment
$
160,289
201,413
417,159
864,872
Distribution Segment
83,912
258,151
173,638
622,210
Corporate and Eliminations
(22,090
)
(16,798
)
(67,023
)
(43,355
)
Total Cost of Revenues
$
222,111
$
442,766
$
523,774
$
1,443,727
Gross profit:
Beverages
$
339,688
$
514,995
$
1,380,612
$
1,308,456
Distribution
70,385
152,578
198,547
353,239
Corporate and Eliminations
90,160
(88,537
)
260,845
307,146
Gross profit
$
500,233
$
756,110
$
1,840,004
$
1,968,841
Liquidity and Capital Resources
Going Concern
We have incurred operating losses since
inception and have negative cash flow from operations since inception. As of September 30, 2021, we had a stockholders' deficit
of approximately 5.1 million and we incurred a net loss of approximately $4.4 million during the nine months ended September 30,
2021. We also utilized cash in operations of approximately $1.6 million during the nine months ended September 30, 2021. As a result,
our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient
cash flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue
our operations.
Our consolidated financial statements
have been prepared on a going concern basis, which implies we may not continue to meet our obligations and continue our operations
for the next fiscal year. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary
debt or equity financing to continue operations until we begin generating positive cash flow.
There is no assurance that we will ever
be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable
to us, if at all. The issuance of additional equity securities by us would result in a significant dilution in the equity interests
of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities
and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be
unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business,
the result of which would be that our stockholders would lose some or all of their investment. The consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classifications of liabilities that may result should we be unable to continue as a going concern.
Lines of Credit
Since inception, we have financed our
operations primarily through internally generated funds, private sales of stock, accruals of compensation, and the use of our lines
of credit. In summary, our lines of credit are as follows:
Total Amount Available
Interest Rate
(per annum)
Outstanding Principal Balance   as of
September 30, 2021
Accrued Interest as of September 30, 2021
Kona Gold Line of Credit #1 – Related Party
$
1,500,000
3.75
%
$
1,372,651
$
73,906
Kona Gold Line of Credit #2
a
$
400,000
3.75
%
$
198,470
$
42,683
Gold Leaf Line of Credit – Related Party
$
200,000
3.75
%
$
125,500
$
7,065
a
This line of credit was provided by Matthew Nicoletti, an otherwise unaffiliated third party to whom we previously sold and issued certain shares of our Series B Preferred Stock (as then constituted) and Series C Preferred Stock (as then constituted), all of which have been converted into shares of our Common Stock and sold into the public market. Mr. Nicoletti is no longer the record or beneficial owner of any of our equity. There was no connection between our prior equity transactions with Mr. Nicoletti and our entry into this line of credit.
Notes Payable – Related Party
We had the following outstanding notes
payable from a related party during the nine months ended September 30, 2021:
52
Note (1)
Issuance Date
Original Borrowing Amount
Interest Rate
Maturity Date
Largest Outstanding Balance since January 1,
2018
Outstanding Balance as of September 30, 2021
Long-term Loan – Kona Gold
October 31, 2018
$
20,000
0
%
April 4, 2022
$
20,000
$
—
Long-term Loan – Gold Leaf
February 19, 2019
$
70,000
0
%
March 15, 2022
$
70,000
$
55,000
(1)
Each of the notes payable was issued by us in favor of Robert Clark, our President, Chief Executive Officer, Secretary, and Chairman of our Board.
Note Receivable – Branded Legacy
On May 26, 2016, Robert Clark formed
Elev8 Hemp, LLC, a Delaware limited liability company ("Elev8 Hemp"), on behalf of Ryan Medico, our then-Chief Financial
Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp.
In June 2016, we entered into a letter
of intent with Elev8 Hemp to acquire it, such that it would become our wholly-owned subsidiary. Pursuant to the letter of intent,
on June 7, 2016, we entered into an Acquisition Agreement with Elev8 Hemp (the "Elev8 Hemp Acquisition Agreement"),
whereby we agreed to acquire 100% of the ownership of Elev8 Hemp and, in exchange, we agreed to issue to Mr. Medico five million
restricted shares of our Common Stock, which had a fair market value of $50,000. The Elev8 Hemp Acquisition Agreement provided
that, if we failed to adequately capitalize the development of Elev8 Hemp to complete its objectives set forth in its business
plan, Mr. Medico would have the option until March 31, 2018 to repurchase Elev8 Hemp from us for a purchase price of $50,000, which
could be paid in shares of our Common Stock.
On October 10, 2016, we entered into
a Membership Interest Purchase Agreement (the "Membership Interest Purchase Agreement") with Branded Legacy, to sell
100% of the issued and outstanding membership interests of Elev8 Hemp to Branded Legacy in consideration of Branded Legacy's
issuance to us of 200,000,000 shares of its common stock, par value $0.00001. In connection with this transaction, Mr. Medico became
the Chief Executive Officer and sole director of Branded Legacy. The parties desired to enter into the Membership Interest Purchase
Agreement because we did not have adequate capital to fund the development of Elev8 Hemp's business, as well as our own.
Until July 2018, Mr. Medico also continued to serve as our Chief Financial Officer.
On April 14, 2017, our Board declared
a dividend to our stockholders of an aggregate of 53,196,608 shares of common stock of Branded Legacy. Our stockholders received
one share of common stock of Branded Legacy for every 10 shares of our Common Stock held on the record date. On the record date,
we had approximately 104 stockholders, all of whom received this dividend. After the payment of the dividend, we held 146,803,392
shares of common stock of Branded Legacy.
On March 6, 2018, we entered into a
Securities Exchange and Settlement Agreement (the "First Exchange Agreement") with Branded Legacy. Pursuant to the
First Exchange Agreement, we exchanged with Branded Legacy the remaining 146,803,392 shares of its common stock held by us for
2,746,723 shares of Branded Legacy's Series D preferred stock. The shares of Series D preferred stock were initially convertible
into 164,803,380 shares of Branded Legacy's common stock.
On November 26, 2019, we entered into
a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the 2,746,723 shares of Branded Legacy's
Series D preferred stock for its 10-year Promissory Note in our favor in the original principal amount of $1,500,000 (the "Branded
Legacy Note"). The Branded Legacy Note is unsecured, non-convertible, and all principal and accrued and unpaid interest thereon
is due and payable on November 27, 2029.
53
In more recent discussions with our
independent registered public accounting firm, we determined that the Branded Legacy Note should be classified as a note receivable
on our balance sheets as of September 30, 2021 and December 31, 2020, with a full reservation due to current doubts about collectability
due to the dollar amount and duration of the term of the Branded Legacy Note, rather than disclosing the note receivable as an
"investment" but not recording it on the balance sheets. Because of this re-classification, the Banded Legacy Note
is no longer an off-balance sheet arrangement.
Paycheck Protection Promissory Note
and Economic Injury Disaster Loan
On May 4, 2020, we entered into a Paycheck
Protection Promissory Note in the original principal amount of $95,161 (the "PPP Loan") with Wells Fargo Bank, N.A.
The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck Protection Program (the "PPP"),
which was established as part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") and is administered
by the U.S. Small Business Administration. The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the
average monthly payroll expenses of the qualifying business. The current term of the PPP Loan is two years, with a maturity date
of May 6, 2022 and it contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan
are deferred for the first six months of the term of the PPP Loan, or November 2020. Thereafter, principal and interest are payable
monthly and may be prepaid by us at any time prior to maturity with no prepayment penalties.
In January
2021, the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $117,487 (the "PPP
Loan 2") with Wells Fargo Bank, N.A. The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck
Protection Program (the "PPP"), which was established as part of the Coronavirus Aid, Relief and Economic Security
Act the ("CARES Act") and is administered by the U.S. Small Business Administration. The PPP provides for loans to
qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The current
term of the PPP Loan is five years, with a maturity date of January 2026 and it contains a favorable fixed annual interest rate
of 1.00%. Payments of principal and interest on the PPP Loan are deferred for the first six months of the term of the PPP Loan,
or November 2020. Thereafter, principal and interest are payable monthly and may be prepaid by us at any time prior to maturity
with no prepayment penalties.
Under the terms of the CARES Act, recipients
can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such forgiveness will be determined,
subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including,
but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, "Qualifying Expenses"),
and on the maintenance of employee and compensation levels during a certain time period following the funding of the PPP Loan.
The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period.
We have used the proceeds of the PPP Loan for salaries and wages, building lease expense, and utilities. However, no assurance
is provided that we will be able to obtain forgiveness of the PPP Loan in whole or in part.
On April 27,
2021, the Paycheck Protection Promissory Note, dated May 4, 2020, in the original principal amount of $95,161 (the "PPP Loan")
with Wells Fargo Bank, N.A was forgiven for the full amount. The PPP Loan was made under, and is subject to, the terms and conditions
of the Paycheck Protection Program (the "PPP"), which was established as part of the Coronavirus Aid, Relief and Economic
Security Act the ("CARES Act") and is administered by the U.S. Small Business Administration.
In May 2020, we also received an advance
in the amount of $7,000 as part of the Economic Injury Disaster Loan program offered by the U.S. Small Business Administration.
This advance was received after we filed our application with regarding to the PPP. The advance was not included in any of the
documentation related to the PPP Loan. We are in the process of determining how this advance will be included as part of the PPP
Loan forgiveness.
2020 Securities Purchase Agreement
54
In May 2020, the Company completed the
2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the First
2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second 2020
Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third 2020
Debenture promptly after the SEC declared the Registration Statement effective. The 2020 Debentures are due 12 months from their
respective issuance dates and are secured by all of the Company's assets and the assets of each of its subsidiaries pursuant
to that certain Security Agreement by and among the Selling Stockholder, the Company's subsidiaries, and the Company. Initially,
the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.05 per share, subject to adjustment
(the "2020 Fixed Conversion Price"), or (ii) 80% of the lowest daily volume weighted average price ("VWAP")
of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the "2020
Market Conversion Price"). The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces
the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current
conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset
sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. The
2020 Debentures are subject to a "conversion blocker" such that the Selling Stockholder cannot convert any portion
of the 2020 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued
and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of
the Common Stock issuable upon conversion of the 2020 Debentures or exercise of the 2020 Warrant that had not then been converted
or exercised, respectively). The Selling Stockholder can increase that 4.99% "conversion blocker" to 9.99% upon at
least 65 days' prior written notice to the Company. The 2020 Debentures accrue interest at an annual rate equal to 8% and
are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2020 Debentures or otherwise
accelerates the maturity date, as provided for in the 2020 Debentures). Interest is payable either in cash or, if certain Equity
Conditions (as defined in the 2020 Debentures) are then satisfied, in shares of the Common Stock at the 2020 Market Conversion
Price on the trading day immediately prior to the date paid.
At the Company's option, it has
the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their respective
maturity dates;
provided
,
that
, as of the date of the holder's receipt of the redemption notice, (i) the VWAP
of the Common Stock is less than the 2020 Fixed Conversion Price, initially $0.05 per share, and (ii) there is no Equity Conditions
failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon,
as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium").
The Company must provide the holder 15 business days' advance notice of its intent to make a redemption, setting forth the
amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.
The 2020 Debentures contain an adjustment
provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common Stock or
common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits, reverse
stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in
an adjustment of the conversion price of the 2020 Debentures.
Pursuant to the terms of the Registration
Rights Agreement, the Company agreed to file the Registration Statement with the SEC registering for resale the Conversion Shares
and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company also agreed, among
other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company
in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling Stockholder.
55
Pursuant to the 2020 SPA, the purchase
price for the First 2020 Debenture was $250,000, less $15,000 for origination fees, which consisted of the "original issue
discount" of $10,000 and $5,000 as a structuring fee. On December 23, 2020, the Company converted $100,000 of the principal
of, and $12,274 of accrued interest on, the First 2020 Debenture into 8,255,438 shares of the Company's common stock. On
January 25, 2021, the Company converted $150,000 of the principal of, and $1,118 of accrued interest on, the First 2020 Debenture
into 7,094,732 shares of the Company's common stock, see Note 11,
equity transactions
. At September 30, 2021, no balance
remains on the principal balance of the First 2020 Debenture.
Pursuant to the 2020 SPA, the purchase
price for the Second 2020 Debenture was $250,000, less $10,000 for origination fees, which consisted of the "original issue
discount" of $10,000 fee. On January 25, 2021, the Company converted $100,000 of the principal of, and $10,410 of accrued
interest on, the Second 2020 Debenture into 5,183,613 shares of the Company's common stock. On February 19, 2021, the Company
converted $150,000 of the principal of, and $855 of accrued interest on, the Second 2020 Debenture into 7,252,634 shares of the
Company's common stock see Note 11,
equity transactions
. At September 30, 2021, no balance remains on the principal
balance of the Second 2020 Debenture.
Pursuant to the 2020 SPA, the purchase
price for the Third 2020 Debenture was $500,000, less $10,000 for origination fees, which consisted of the "original issue
discount" of $10,000 fee. On January 12, 2021, the Company converted $200,000 of the principal of, and $1,425 of accrued
interest on, the First 2020 Debenture into 10.887,819 shares of the Company's common stock, see Note 11,
equity transactions
.
On May 5, 2021, the Company converted $300,000 of the principal of, and $7,496 of accrued interest on, the First 2020 Debenture
into issued an aggregate of 14,436,426 shares of common stock, see Note 11,
equity transactions
. At September 30, 2021,
no balance remains on the principal balance of the Third 2020 Debenture.
February 2021 Securities Purchase
Agreement
In February 2021, the Company completed
a private placement transaction (the "February 2021 Private Placement") of two secured convertible debentures (the
"February 2021 Debentures"), convertible for up to 154,958,678 shares (the "February 2021 Conversion Shares")
of Common Stock and granted a Warrant to purchase Common Stock (the "February 2021 Warrant"), exercisable for up to
50,000,000 shares of Common Stock (the "February 2021 Warrant Shares"), pursuant to that certain Securities Purchase
Agreement between the Selling stockholder and the Company, dated as of February 10, February 2021 (the "February 2021 SPA").
The Company sold and issued the initial February 2021 Debenture (the "First February 2021 Debenture") and granted the
February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue the second February 2021
Debenture (the "Second February 2021 Debenture") promptly after the SEC declares effective the February 2021 Registration
Statement (as defined below).
The February 2021 Debentures are due
12 months from their respective issuance dates and are secured by all of the Company's assets and the assets of each of its
subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company's subsidiaries,
and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which
is $0.03 per share, subject to adjustment (the "February 2021 Fixed Conversion Price"), or (ii) 80% of the lowest daily
volume weighted average price ("VWAP") of our Common Stock during the 15 trading days immediately preceding the conversion
date, subject to adjustment (the "February 2021 Market Conversion Price"). The February 2021 Debentures contain an
adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common
Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any
stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events
will also result in an adjustment of the conversion price of the February 2021 Debentures. The February 2021 Debentures are subject
to a "conversion blocker" such that the Selling Stockholder cannot convert any portion of the February 2021 Debentures
that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares
of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable
upon conversion of the February 2021 Debentures or exercise of the February 2021 Warrant that had not then been converted or exercised,
respectively). The Selling Stockholder can increase that 4.99% "conversion blocker" to 9.99% upon at least 65 days'
prior written notice to the Company. The February 2021 Debentures accrue interest at an annual rate equal to 8% and are due and
payable on their respective maturity dates (or sooner if the Selling Stockholder converts the February 2021 Debentures or otherwise
accelerates the maturity date, as provided for in the February 2021 Debentures). Interest is payable either in cash or, if certain
Equity Conditions (as defined in the February 2021 Debentures) are then satisfied, in shares of the Common Stock at the February
2021 Market Conversion Price on the trading day immediately prior to the date paid.
56
At the Company's option, it has
the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their
respective maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP
of the Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity
Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest
thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption
Premium"). The Company must provide the holder 15 business days' advance notice of its intent to make a redemption,
setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.
The February 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price
if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the February 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the February 2021 Debentures.
Pursuant to the February 2021 SPA, the purchase price for the First February 2021 Debenture was $900,000, less $41,000 for origination
fees, which consisted of the "original issue discount" of $36,000 and $5,000 as a structuring fee. Pursuant to the
February 2021 SPA, the purchase price for the Second February 2021 Debenture will be $600,000, less $24,000 as an "original
issue discount."
In connection with the February 2021
Private Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the
Common Stock. The February 2021 Warrant has a six-year term and is immediately exercisable at an exercise price of $0.03 per share,
subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of
the February 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder
may exercise the February 2021 Warrant on a "cashless" basis. "Event of Default" means an event of default
under the February 2021 SPA or the February 2021 Debentures.
The February 2021 Warrant contains an
adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common
Stock or common stock equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock
splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will
also result in an adjustment of the exercise price of the February 2021 Warrant.
The February 2021 Warrant is subject
to an "exercise blocker" such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant
that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares
of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable
upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised or converted,
respectively). The Selling Stockholder can increase that 4.99% "exercise blocker" to 9.99% upon at least 65 days'
prior written notice to the Company.
57
Pursuant to the terms of the February
2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1
(the "February 2021 Registration Statement") with the SEC registering for resale the February 2021 Conversion Shares
and the February 2021 Warrant Shares within 30 calendar days following the closing of the February 2021 Private Placement. The
Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to
file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the February 2021
Registration Statement. Further, the Company agreed to use its best efforts to have the February 2021 Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following
the date on which the Company is notified that the February 2021 Registration Statement will not be reviewed or is no longer subject
to further review and comments. Pursuant to the February 2021 Registration Rights Agreement, the Company is subject to partial
liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the February 2021 SPA for either
of the February 2021 Debentures then held by the holder for failure to file the February 2021 Registration Statement timely, failure
to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading
days after the date the Company is notified that the February 2021 Registration Statement will not be reviewed or is not subject
to further review, the February 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness,
the February 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are
not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate
of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights
Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed
that the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration
Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also
agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred
by the Company in connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares
held by the Selling Stockholder.
Pursuant to the February 2021 SPA, the
purchase price for the First February 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the "original
issue discount" of $36,000 and $5,000 as a structuring fee. At September 30, 2021, the principal balance of the First 2021
Debenture is $900,000.
On May 5, 2021, the Company and YA II
PN, LTD entered into a Limited Amendment Agreement dated as of May 5, 2021, by and between Kona Gold Beverage, Inc., a Delaware
corporation (the "Company"), and YA II PN, LTD., a Cayman Islands exempt company ("Investor"). The Company
and the Investor agree to a partial Second Closing, whereby the Investor will purchase a portion of the intended Second Convertible
Debenture (the "Partial Second Convertible Debenture") in the face amount of $200,000 for a purchase price of $192,000
(the "Partial Second Convertible Debenture Purchase Price") within 1 business day following the date hereof. The Investor
and the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement"), Registration Rights
Agreement (the "Registration Rights Agreement") and related Transaction Documents (as this term is defined in the Securities
Purchase Agreement) dated February 10, 2021, the date thereof, pursuant to which the Investor agreed to purchase secured Convertible
Debentures (individually referred to as the "First Convertible Debenture" and the "Second Convertible Debenture")
upon various conditions precedent as articulated in Section 8(a) and (b) of the Securities Purchase Agreement and in the Transaction
Documents, see above Note 9 – Securities Purchase Agreement, Derivative Liabilities, And Warrant.
Pursuant to the February 2021 SPA, the
purchase price for the Second February 2021 Debenture was $600,000, less $200,000 for the "Partial Second Convertible Debenture",
dated May 5, 2021, less for origination fees, which consisted of the "original issue discount" of $16,000. On June
9, 2021, the Company converted $200,000 of the principal of, and $1,578 of accrued interest on the Second 2021 Debenture into 6,719,269
shares of the Company's common stock see Note 11,
equity transactions
. At September 30, 2021, no balance remains on
the principal balance of the Second February 2021 Debenture.
August 2021 Securities Purchase Agreement
In August 2021, the Company completed a private
placement transaction (the "August 2021 Private Placement") of two secured convertible debentures (the "August
2021 Debentures"), convertible for up to 1,111,111,110 shares (the "August 2021 Conversion Shares") of Common
Stock and granted a Warrant to purchase Common Stock (the "August 2021 Warrant"), exercisable for up to 100,000,000
shares of Common Stock (the "August 2021 Warrant Shares"), pursuant to that certain Securities Purchase Agreement between
the Selling stockholder and the Company, dated as of August 10, 2021 (the "August 2021 SPA"). The Company sold and
issued the initial August 2021 Debenture (the "First August 2021 Debenture") and granted the August 2021 Warrant promptly
after entering in the August 2021 SPA. The Company will sell and issue the second August 2021 Debenture (the "Second August
2021 Debenture") promptly after the SEC declares effective the August 2021 Registration Statement (as defined below).
58
The August 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company's
assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder,
the Company's subsidiaries, and the Company. Initially, the August 2021 Debentures are convertible at the lower of (i) the
fixed conversion price, which is $0.03 per share, subject to adjustment (the "August 2021 Fixed Conversion Price"),
or (ii) 75% of the lowest daily volume weighted average price ("VWAP") of our Common Stock during the 15 trading days
immediately preceding the conversion date, subject to adjustment (the "August 2021 Market Conversion Price"). The
August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the
Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The
August 2021 Debentures are subject to a "conversion blocker" such that the Selling Stockholder cannot convert any
portion of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99%
of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination,
shares of the Common Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that
had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% "conversion blocker"
to 9.99% upon at least 65 days' prior written notice to the Company. The August 2021 Debentures accrue interest at an annual
rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the
August 2021 Debentures or otherwise accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is
payable either in cash or, if certain Equity Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares
of the Common Stock at the August 2021 Market Conversion Price on the trading day immediately prior to the date paid.
At the Company's option, it has the right
to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective
maturity dates; provided, that, as of the date of the holder's receipt of the redemption notice, (i) the VWAP of the Common
Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure.
The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well
as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the "Redemption Premium").
The Company must provide the holder 15 business days' advance notice of its intent to make a redemption, setting forth the
amount of principal and interest we desire then to redeem plus the applicable Redemption Premium.
The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if
the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price
of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales,
stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures.
Pursuant to the August 2021 SPA, the purchase
price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination fees, which consisted of the "original
issue discount" of $60,000 and $10,000 as a structuring fee. Pursuant to the August 2021 SPA, the purchase price for the
Second August 2021 Debenture will be $1,500,000, less $10,000 as an "original issue discount."
In connection with the August 2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate
of 100 million shares of the Common Stock. The August 2021 Warrant has a three-year term and is immediately exercisable at an
exercise price of $0.03 per share, subject to adjustment. If the Company fails to maintain an effective registration statement
with the SEC covering the resale of the August 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred
and is continuing, then the holder may exercise the August 2021 Warrant on a "cashless" basis. "Event of Default"
means an event of default under the August 2021 SPA or the August 2021 Debentures.
59
The August 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the
Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of
the August 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock
dividends, and similar events will also result in an adjustment of the exercise price of the August 2021 Warrant.
The August 2021 Warrant is subject to an "exercise blocker" such that the Selling Stockholder cannot exercise any
portion of the August 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of
the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination,
shares of the Common Stock issuable upon exercise of the August 2021 Warrant or conversion of the August 2021 Debentures that
had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% "exercise blocker"
to 9.99% upon at least 65 days' prior written notice to the Company.
Pursuant to the terms of the August 2021 Registration
Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the "August
2021 Registration Statement") with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant
Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to
waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K
for its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the
Company agreed to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company
is notified that the August 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments.
Pursuant to the August 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of
the aggregate purchase price paid by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held
by the holder for failure to file the August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration
in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified
that the August 2021 Registration Statement will not be reviewed or is not subject to further review, the August 2021 Registration
Statement is not declared effective by the effectiveness deadline, if after effectiveness, the August 2021 Registration Statement
ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus
therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month
period, or if after the six-month anniversary of the August 2021 Registration Rights Agreement, the Company does not have available
adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages
payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights Agreement is 24% of the aggregate purchase
price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among other things, to indemnify the Selling
Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration
of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder.
Pursuant to the August 2021 SPA, the purchase
price for the First August 2021 Debenture was $1,500,000, less $70,000 for origination fees, which consisted of the "original
issue discount" of $60,000 and $10,000 as a structuring fee. At September 30, 2021, the principal balance of the First August
2021 Debenture is $1,500,000.
Derivative Liability
The 2020, 2021 Debentures, and 2021-2
Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of the
First 2020 Debenture. The estimated fair value of the 2020 Debentures has been calculated using the Black-Scholes fair value option-pricing
model with key input variables provided by management, as of the date of issuance, with the valuation offset against additional
paid in capital, and at each reporting date, with changes in fair value recorded as gains or losses on revaluation in other income
(expense). The Company identified embedded features in the 2020, 2021 and 2021-2 Debentures, which caused the 2020, 2021 and 2021-2
Debentures to be classified as a liability. These embedded features included the right for the holder to request for the Company
to settle the amounts owed pursuant to the 2020, 2021 and 2021-2 Debentures to the holder by paying an amount of cash equal to
the Black-Scholes value of the remaining unexercised portion of the 2020, 2021 and 2021-2 Debentures on the date of the consummation
of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the
whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument
and to adjust the fair value of the instrument as of each subsequent balance sheet date.
60
The derivative liabilities were valued
using Black-Scholes pricing model with the following average assumptions:
September 30, 2021
Stock Price
$
0.0166
Exercise Price
$
0.0124
Expected Life
1
Volatility
87.69
%
Dividend Yield
0
%
Risk-Free Interest Rate
.08
%
Fair Value
$
1,225,741
The following table summarizes the changes
in the Company's assets and liabilities measured at fair value as of September 30, 2021:
September 30, 2021
Quoted prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs
(Level 3)
Convertible promissory notes with embedded conversion option
$
1,225,741
$
1,225,741
Total
$
1,225,741
$
1,225,741
The following table sets forth a summary
of change in fair value of the Company's derivative liabilities for the year ended June 30, 2021:
Fair value, January 1, 2020
$
—
Change in fair value of embedded conversion features of debenture included in earnings
—
Embedded conversion option liability recorded in connection with the issuance of 2020 debenture
148,628
Fair value, June 30, 2020
$
148,628
Change in fair value of embedded conversion features of debenture included in earnings
(39,725
Embedded conversion option liability recorded in connection with the issuance of 2020 debentures
108,903
Fair value, September 30, 2020
$
217,806
Change in fair value of embedded conversion features of debenture included in earnings
(69,051
Embedded conversion option liability recorded in connection with the issuance of 2020 debentures
212,397
Fair value, December 31, 2020
$
361,152
Change in fair value of embedded conversion features of debenture included in earnings
(202,443
Embedded conversion option liability recorded in connection with the issuance of 2021 debentures
468,309
Fair value, March 31, 2021
$
627,018
Change in fair value of embedded conversion features of debenture included in earnings
(307,585
Embedded conversion option liability recorded in connection with the issuance of 2021 debentures
166,088
Fair value, June 30, 2021
$
485,521
Change in fair value of embedded conversion features of debenture included in earnings
(120,306
)
Embedded conversion option liability recorded in connection with the issuance of 2021-2 debentures
860,526
Fair value, September 30, 2021
$
1,225,741
61
Warrant
The Company also granted the 2020 Warrant,
2021 Warrant and the 2021-2 Warrant to purchase up to an aggregate of 20 million shares, 50,000,000, and 100,000,000 of the Common
Stock, respectively. The 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively, has a three-year term and is immediately
exercisable at an exercise price of $0.05 per share, subject to adjustment. If the Company fails to maintain an effective registration
statement with the SEC covering the resale of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant Shares, or if an Event of Default
(as defined below) has occurred and is continuing, then the holder may exercise, respectively, the 2020 Warrant and the 2021 Warrant
on a "cashless" basis. "Event of Default" means an event of default under the 2020 SPA, 2021 SPA and the
2021-2 SPA or the 2020 Debentures, 2021 Debentures and the 2021-2 Debentures, respectively.
The 2020 Warrant, 2021 Warrant and the
2021-2 Warrant, respectively, contains an adjustment provision that, subject to certain exceptions, reduces the exercise price
if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price
of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively. Any stock splits, reverse stock splits, recapitalizations,
mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price
of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively.
The 2020 Warrant, 2021 Warrant and the
2021-2 Warrant, respectively, is subject to an "exercise blocker" such that the Selling Stockholder cannot exercise
any portion, respectively, of the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant would result in the Selling Stockholder and
its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding,
for purposes of such determination, shares of the Common Stock issuable, respectively, upon exercise of the 2020 Warrant, 2021
Warrant and the 2021-2 Warrant or conversion of the 2020 Debentures, 2021 Debentures and the 2021-2 Debentures, respectively, that
had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% "exercise blocker"
to 9.99% upon at least 65 days' prior written notice to the Company.
During the year ended December 31, 2020,
the Company granted the 2020 Warrant that was immediately exercisable for up to 20,000,000 shares of Common Stock. During the three
months ended June 30, 2021, the Company granted the 2021 Warrant that was immediately exercisable for up to 50,000,000 shares of
Common Stock. During the three months ended September 30, 2021, the Company granted the 2021-2 Warrant that was immediately exercisable
for up to 100,000,000 shares of Common Stock. The 2020 Warrant, 2021 Warrant and the 2021-2 Warrant, respectively, was fully expensed
as an interest expense related to the 2020 Warrant, 2021 Warrant and the 2021-2 Warrant issued in connection with the consummation
of the transactions contemplated by the 2020 SPA, 2021 SPA and 2021-2 SPA, respectively, and no liability was recorded as of September
30, 2021 and December 31, 2020, respectively.
62
Cash Flows
In summary, our use of cash has been
as follows:
For the Nine Months Ended September 30, 2021
Net cash used in operating activities
$
1,586,677
)
Net cash used in investing activities
$
(1,427,106
)
Net cash provided by financing activities
$
3,447.143
Operating Activities
Cash provided by or used in operating
activities primarily consists of net income adjusted for certain non-cash items, including depreciation, amortization, stock-based
payments, interest expense related to the Warrant issued in the Private Placement, and the effect of changes in working capital
and other activities. Cash used in operating activities for the nine months ended September 30, 2021 was approximately $1.6 million
and consisted of a net loss of approximately $4.4 million, adjustments for non-cash items, including adjustments related to the
issuance of shares of our Common Stock for an acquisition, Common Stock issued for compensation, interest expense related to the
Warrant, and depreciation of approximately $2.1 million, and approximately $731,100 used in working capital and other activities.
Investing Activities
Cash used in investing activities for
the nine months ended September 30, 2021 was approximately $1.4 million and was attributable to capital expenditures of approximately,
$145,900, and goodwill of approximately $1.28 million, which was attributed to an acquisition.
Financing Activities
Cash provided by financing activities
for nine months ended September 30, 2021 was approximately $3.5 million and was due to proceeds from convertible debt of approximately
$3.0 million, proceeds from note payable for an acquisition of approximately $590,400, proceeds from note payable for approximately
$34,800, changes from the PPP Loan of approximately $22,300, $217,000 was used to pay principal on a line of credit, and $13,000
was used to pay principal on a note payable.
Non-Cash Investing and Financing
Activities
For the nine months ended September
30, 2021, there were no non-cash investing and financing activities.
Off-Balance Sheet Arrangements
None.
Critical Accounting Policies
Our discussion and analysis of results
of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and
related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related
to provisions for uncollectible accounts receivable, inventories, valuation of intangible assets, and contingencies and litigation.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The accounting policies that we follow
are set forth in Note 2,
Summary of Significant Accounting Policies
, of our consolidated financial statements for the three
months ended September 30, 2021. These accounting policies conform to accounting principles generally accepted in the United States,
and have been consistently applied in the preparation of the consolidated financial statements.
63
Leases
On January 1, 2019, we adopted the Financial
Accounting Standards Board's ("FASB") Accounting Standards Update 2016-02,
Leases (Topic 842)
("ASC
Topic 842"), which requires an entity to recognize a liability and corresponding asset for leases that meet certain criteria.
We applied ASC Topic 842 using the modified retrospective approach. Under this approach, we applied the new standards to all new
leases, and leases which have remaining obligations for financial statements issued for fiscal years beginning after December 15,
2018. We elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward
historical lease classification, and not reassess (i) whether a contract was or contained a lease, and (ii) initial direct costs
for any leases that existed prior to January 1, 2019. Under this method, we did not restate comparative periods in our financial
statements. We present right-of-use assets resulting from leases separately from other assets as noncurrent, and amortized accordingly.
The corresponding lease liabilities are presented separately from other liabilities on the accompanying balance sheets.
We recognize a right-of-use asset and
a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial
amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end
of the lease term or the end of the useful life of the asset.
The lease liability is initially measured
at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election
of the practical expedient. We have elected to use the risk-free rate.
Please refer to Note 15,
Lease Liabilities,
to our consolidated financial statements for the nine months ended September 30, 2021 for additional information related to
our right-of-use assets and lease liabilities.
Revenue Recognition and Deferred Revenue
We sell our
products, which includes our hemp energy drink, CBD energy water, CBD water, and logo apparel, to online customers or through resellers
and distributors. In evaluating the timing of the transfer of control of products to customers, we consider several indicators,
including significant risks and rewards of products, our right to payment, and the legal title of the products. We recognize revenue
from product sales to customers, distributors, and resellers when products that do not require further services by us are shipped,
when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made
to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to
shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling
are included in cost of products sold.
We also sell our products, and beverages
purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores, and smoke and gift shops.
In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant
risks and rewards of products, our right to payment, and the legal title of the products. We recognize revenue from product sales
to resellers when products that do not require further services by us are shipped or delivered, when there are no uncertainties
surrounding customer acceptance and when collectability is reasonably assured. Cash received by us prior to shipment is recorded
as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers
in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net
sales. Costs of shipping and handling are included in cost of products sold.
On January 1, 2019, we adopted ASU No.
2014-09,
Revenue from Contracts with Customers (Topic 606)
("ASC Topic 606"). The underlying principle of ASC
Topic 606 is to recognize revenue to depict the transfer of goods or services to a customer at the amount expected to be collected.
The implementation of Topic ASC 606 had no impact on the prior period financial statements and no cumulative effect adjustment
was recognized.
64
To apply these principles, ASC Topic
606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes:
1.
Identifying
the contract(s) or agreement(s) with a customer;
2.
Identifying
the separate performance obligations in the contract or agreement;
3.
Determining
the transaction price;
4.
Allocating
the transaction price to the separate performance obligations in the contract or agreement; and
5.
Recognizing
revenue as each performance obligation is satisfied.
Pursuant to ASC Topic 606, we recognize
revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control,
including the risks and rewards of ownership. With respect to us, performance is deemed to occur upon shipment or delivery of products
to our customers based on the written contract terms, which is also when control is transferred.
We evaluated the guidance in ASC 606-10-50-5
and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of our revenue
earned from our Beverages Segment and our Distribution Segment is recognized when we satisfy a single performance obligation by
transferring control of our products to a customer. We do not have significant financing components or payment terms, and we do
not have any material unsatisfied performance obligations. Our revenues are obtained in similar geographical locations within the
United States. Furthermore, the operations in each of our reporting segments are expected to have essentially the same future prospects,
similar gross margins, sales trends, and the nature of our products and customers are essentially the same. The sales from our
beverage product types are organized as one reportable segment, which we refer to as the Beverages Segment, and the sales of our
products and products that are purchased from resellers that are distributed by Gold Leaf is organized as our second reportable
segment, which we refer to as the Distribution Segment. We have also determined that disaggregated revenue by net sales by revenue
source would be meaningful and allow investors to understand our business activities, historical performance, or future prospects.
Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf
distribution sales. This is the same information used by our Chief Operating Decision Maker for evaluating the financial performance
of our operations and making resource decisions. We also sell merchandise and apparel that comprises approximately 1% of our gross
annual sales, and solely exists to promote our beverages. Therefore, our merchandise and apparel products are not a reportable
segment. Merchandise and apparel sales are included with the gross sales for our Beverages Segment.
Accounts Receivable and Allowance for Doubtful Account
Receivable
Accounts receivable are recorded at
net realizable value. We determine provisions for uncollectible accounts, sales returns, and claims based upon factors including
the credit risk and activity of specific distributors and resellers, historical trends, and other information. If we become aware
of a specific distributor's or reseller's inability to meet its financial obligations, bad debt charges are recorded
based on an overall assessment of past due accounts receivable outstanding. In the opinion of management, a provision was deemed
necessary for uncollectible accounts.
Inventory
The cost of inventory using the standard
cost method, which approximates actual cost based on a first-in, first-out method. Our inventories are valued at the lower of cost
or net realizable value. Our inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD
energy waters, CBD waters, hemp energy drinks, cans for production, and merchandise and apparel. We periodically evaluate and adjust
inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of
all beverage inventory is two years, and as of September 30, 2021, we had approximately $866,600 of product in inventory, which
was an increase of approximately $206,100, compared to approximately $660,500 at December 31, 2020. We expect the balance of inventory
to increase in direct relation to the increase in sales that we expect. See Note 2,
Summary of Significant Accounting Policies
,
Subsection F
,
Inventories,
of our consolidated financial statements for the nine months ended September 30, 2021,
for an additional description of our inventory that had a material effect on our consolidated financial statements.
65
Goodwill and Intangible Assets
Goodwill arises from business combinations
and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling
interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill
acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for
impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test
should be performed. We have selected December 31 as the date to perform the annual impairment test.
Intangible assets represent both indefinite
lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested
annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization. We have
selected December 31 as the date to perform the annual impairment test. See Note 2,
Summary of Significant Accounting Policies,
Subsection H, Goodwill and Intangible Assets,
of our consolidated financial statements for the nine months ended September
30, 2021, for an additional description of intangible assets that had a material effect on our consolidated financial statements.
Stock-Based Compensation
FASB's ASC Topic 718, Stock Compensation
(formerly, FASB Statement 123R), prescribes accounting and reporting standards for all stock-based payment transactions in which
employee and non-employee services are acquired. We measure the cost of employee and non-employee services received in exchange
for an award of equity instruments based on the grant-date fair value of the award. Fair value for restricted stock awards is valued
using the closing price of our Common Stock on the date of grant. For our nine months ended September 30, 2021, and 2020, we recognized
stock-based compensation expense of approximately $326,700, and $478,600, respectively. We had a balance in accrued stock-based
compensation at September 30, 2021 and December 31, 2020 of approximately $1.4 million, respectively. See Note 6,
Stock-Based
Compensation,
of our consolidated financial statements for the nine months ended September 30, 2021 for an additional description
of our stock-based compensation that had a material effect on our consolidated financial statements.
Related Party Transactions
See Note 8,
Related Party Transactions,
to our consolidated financial statements for the nine months ended September 30, 2021 for an additional description of related
party transactions that had a material effect on our consolidated financial statements.
Emerging Growth Company Status
On April 5, 2012, the JOBS Act, was
enacted. The JOBS Act provides that, among other things, an "emerging growth company" can take advantage of an extended
transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay
the adoption of some accounting standards until those standards would otherwise apply to private companies. As an emerging growth
company, we have irrevocably elected to take "opt out" of taking advantage of the extended transition period afforded
by the JOBS Act for the implementation of new or revised accounting standards and, as a result, we will comply with new or revised
accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies
on a case-by-case basis.
We intend to rely on certain of the
other exemptions and reduced reporting requirements provided by the JOBS Act. As an emerging growth company, we are not required
to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting
pursuant to Section 404(b), and (ii) comply with any requirement that may be adopted by the Public Company Accounting Oversight
Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about
the audit and the financial statements (auditor discussion and analysis).
66
We will remain an emerging growth company
until the earlier to occur of (1) the last day of our fiscal year (a) following the fifth anniversary of the completion of the
December 31, 2020 offering, (b) in which we have total annual gross revenues of at least $1.07 billion, or (c) in which we are
deemed to be a "large accelerated filer" under the rules of the SEC, which means the market value of our common shares
that is held by non-affiliates exceeds $700 million as of the last day of our second quarter, and (2) the date on which we have
issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We are also a "smaller reporting
company" meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds
to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most
recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market
value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during
the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If
we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions
from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company
we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K
and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive
compensation.
Recently Issued Accounting Pronouncements
See Note 2,
Summary of Significant
Accounting Policies, Subsection S, Recently Issued Accounting Pronouncements,
to our consolidated financial statements for
the nine months ended September 30, 2021 for a discussion of recent accounting pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a Smaller Reporting Company, we are
not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure control
and Procedures
. We carried out an evaluation, under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal
financial officer concluded that, as of September 30, 2021, the period covered in this Report, our disclosure controls and procedures
were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934,
as amended, is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated
to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.
Changes in Internal Control Over
Financial Reporting
. There were no changes in the Company's internal control over financial reporting during the quarter
ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
Inherent Limitations on the Effectiveness
of Controls
Management does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of
the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective
control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due
to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can
also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the
controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections
of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because
of changes in conditions or deterioration in the degree of compliance with policies or procedures.
67
PART II – OTHER INFORMATION
ITEM 1.
Legal Proceedings
We know of no other material pending
legal proceedings to which we or any of our subsidiaries is a party or to which any of our assets or properties, or the assets
or properties of any of our subsidiaries, are subject and, to the best of our knowledge, no adverse legal activity is anticipated
or threatened. In addition, we do not know of any such proceedings contemplated by any governmental authorities.
We know of no material proceedings in
which any of our directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to us or any
of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
ITEM 1A.
Risk Factors
We are a smaller
reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
under this item.
ITEM 2.
Unregistered Sales
of Equity Securities and Use of funds
None
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4.
Mine Safety Disclosures
None.
ITEM 5.
Other Information
None.
68
ITEM 6. Exhibits
The following exhibits are filed with
or incorporated by reference into this Quarterly Report.
3.1
Amended and Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3.1 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
3.2
Amended and Restated By-Laws is incorporated herein by reference to Exhibit 3.2 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
3.3
Certificate of Designation of the Preferences, Rights, and Limitations of the Series B Preferred Stock is incorporated herein by reference to Exhibit 3.3 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
3.4
Certificate of Designation of the Preferences, Rights, and Limitations of the Series C Preferred Stock is incorporated herein by reference to Exhibit 3.4 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
3.5
Certificate of Designation of the Preferences, Rights, and Limitations of the Series D Preferred Stock is incorporated herein by reference to Exhibit 3.5 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
3.6
Certificate of Amendment to Amendment and Restated Certificate of Incorporation, is incorporated herein by reference to Exhibit 3.6 of Amendment No. 1 to the Company Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
4.1
Form of Debenture is incorporated herein by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
4.2
Warrant is incorporated herein by reference to Exhibit 4.2 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
4.3
Form of Stand-alone Debenture is incorporated herein by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-1 (File No.333-239883), filed with the SEC on December 14, 2020.
4.4
Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., on February 11, 2021 is incorporated herein by reference to Exhibit 4.4 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
4.4a*
Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., on February 11, 2021.
4.5
Form of Warrant of the registrant granted to YAII PN, Ltd., on February 11, 2021 is incorporated herein by reference to Exhibit 4.3 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
4.6
Form of Secured Convertible Debenture of the registrant sold and issued to YAII PN, Ltd., effective August 23, 2021 is incorporated herein by reference to Exhibit 4.6 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
4.7
Form of Warrant of the registrant granted to YAII PN, Ltd., effective August 23, 2021 is incorporated herein by reference to Exhibit 4.7 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.1
Securities Purchase Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.2
Registration Rights Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.2 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020
.
69
10.3
Independent Contractor Agreement by and between Kona Gold LLC and OPTN Companies Inc., dated April 15, 2020 is incorporated herein by reference to Exhibit 10.3 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020
.
10.4
Board of Directors Offer Letter between the Company and Matthew Crystal, dated July 24, 2018 is incorporated herein by reference to Exhibit 10.4 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020
.
10.5
Board of Directors Offer Letter between the Company and William Jeffrey Outlaw, dated September 3, 2019 is incorporated herein by reference to Exhibit 10.5 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.6
Form of Distribution Agreement is incorporated herein by reference to Exhibit 10.6 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.7
Membership Interest Purchase Agreement by and among Elev8 Hemp LLC, PLAD, Inc., and the Company, dated October 10, 2016, is incorporated herein by reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.8
Securities Exchange and Settlement Agreement by and between Elev8 Brands, Inc., and the Company, dated March 6, 2018, is incorporated herein by reference to Exhibit 10.8 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.9
Securities Exchange and Settlement Agreement by and between Elev8 Brands, Inc., and the Company, dated November 26, 2019 is incorporated herein by reference to Exhibit 10.9 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.10
Employment Agreement by and between Christopher Selinger and the Company, dated September 1, 2018 is incorporated herein by reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.11
Lease Agreement by and between Kona Gold, LLC and Hay Investment Properties, Inc., dated June 1, 2018 is incorporated herein by reference to Exhibit 10.11 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.12
Triple Net Lease Agreement by and between Gold Leaf Distribution, LLC and 3090 S. Hwy 14, LLC, dated May 22, 2019 is incorporated herein by reference to Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.13
Lease Modification Agreement by and between Gold Leaf Distribution, LLC and 3090 S. Hwy 14, LLC, dated April 21, 2020 is incorporated herein by reference to Exhibit 10.13 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.14
Line of Credit Agreement by and between Robert Clark and Gold Leaf Distribution, LLC, dated August 29, 2019 is incorporated herein by reference to Exhibit 10.14 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.15
Line of Credit Agreement by and between Robert Clark and Kona Gold, LLC, dated April 4, 2019 is incorporated herein by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.16
Line of Credit Agreement by and between Matthew Nicoletti and Kona Gold, LLC, dated May 5, 2018 is incorporated herein by reference to Exhibit 10.16 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.17
Standard Promissory Note issued by Gold Leaf Distribution in favor of Robert Clark, dated February 19, 2019 is incorporated herein by reference to Exhibit 10.17 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.18
Standard Promissory Note issued by Kona Gold, LLC in favor of Robert Clark, dated January 15, 2019 is incorporated herein by reference to Exhibit 10.18 of Amendment No. 1 to the Company Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
70
10.19
Employment Agreement by and between the Company and Robert Clark, dated August 12, 2015 is incorporated herein by reference to Exhibit 10.19 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.20
Employment Agreement by and between the Company and Lori Radcliffe, dated October 8, 2019 is incorporated herein by reference to Exhibit 10.20 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.20a
Employment Agreement Amendment by and between the Company and Lori Radcliffe, dated September 14, 2021, is incorporated herein by reference to Exhibit 10.20a of the Company's Registration Statement on Form S-1, filed with the SEC on September 22, 2021.
10.21
Amendment to Employment Agreement by and between the Company and Robert Clark, dated December 1, 2016 is incorporated herein by reference to Exhibit 10.21 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.22
Agreement by and between the Company and Ryan Dodd, dated May 1, 2019 is incorporated herein by reference to Exhibit 10.22 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.23
Amendment to Employment Agreement by and between Christopher Selinger and Kona Gold Solutions, Inc., dated May 1, 2020 is incorporated herein by reference to Exhibit 10.23of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.24
Amendment to Employment Agreement by and between Christopher Selinger and the Company, dated January 1, 2019 is incorporated herein by reference to Exhibit 10.24 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.25
Security Agreement by and between the Company and YAII PN, Ltd., dated May 14, 2020 is incorporated herein by reference to Exhibit 10.25 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.26
Line of Credit and Security Agreement Modification Agreement by and between Kona Gold LLC and Robert Clark, dated April 1, 2020 is incorporated herein by reference to Exhibit 10.26 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020
.
10.27
Line of Credit and Security Agreement Modification Agreement by and between Gold Leaf Distribution LLC and Robert Clark, dated April 1, 2020 is incorporated herein by reference to Exhibit 10.27 of the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on July 16, 2020.
10.28
Terms of Oral Agreement between the Company and Robert Clark is incorporated herein by reference to Exhibit 10.28 of Amendment No. 1 to the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
10.29
Waiver Agreement by and between the Company and YAII PN, Ltd., dated October 14, 2020, is incorporated herein by reference to Exhibit 10.29 of Amendment No. 1 to the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
10.30
Paycheck Protection Promissory Note issued in favor of Wells Fargo Bank, N.A. dated May 4, 2020, is incorporated herein by reference to Exhibit 10.30 of Amendment No. 1 to the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
71
10.31
Paycheck Protection Promissory Note issued in favor of Wells Fargo Bank, N.A. dated May 4, 2020, is incorporated herein by reference to Exhibit 10.31 of Amendment No. 1 to the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on October 26, 2020.
10.32
Securities Purchase Agreement by and between the Company and YAII PN, Ltd., dated November 30, 2020, is incorporated herein by reference to Exhibit 10.32 to the Company's Registration Statement on Form S-1 (File No.: 333-239883), filed with the SEC on December 14, 2020.
10.33
Form of Securities Purchase Agreement between the registrant and YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.28 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
10.34
Form of Registration Rights Agreement by and between the registrant and YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.29 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
10.35
Form of Amended and Restated Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.30 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
10.36
Form of Intellectual Property Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.31 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
10.37
Form of Amended and Restated Global Guaranty Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed on February 11, 2021 is incorporated herein by reference to Exhibit 10.32 of the Company's Current Report on Form 8-K, filed with the SEC on February 18, 2021.
10.38
Form of Securities Purchase Agreement between the registrant and YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.38 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.39
Form of Registration Rights Agreement by and between the registrant and YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.39 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.40
Form of Second Amended and Restated Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.40 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.41
Form of Intellectual Property Security Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.41 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.42
Form of Second Amended and Restated Global Guaranty Agreement of the registrant and its subsidiaries in favor of YAII PN, Ltd., for a transaction that closed and funded on August 23, 2021 is incorporated herein by reference to Exhibit 10.42 of the Company's Current Report on Form 8-K, filed with the SEC on August 23, 2021.
10.43
Agreement of Lease by and between Gold Leaf Distribution, LLC and RFMD-SC, LLC, dated August 30, 2021, is incorporated herein by reference to Exhibit 10.43 of the Company's Registration Statement on Form S-1, filed with the SEC on September 22, 2021.
31.1*
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2*
Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Rule 13a-14(a) of the Securities Act of 1934.
32.1*
Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.
32.2*
Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.
Ex. 101.INS*
XBRL Instance Document
Ex. 101.SCH*
XBRL Taxonomy Extension Schema Document
Ex. 101.CAL*
XBRL Taxonomy Extension Calculation Linkbase
Document
Ex. 101.DEF*
XBRL Taxonomy Extension Definition Linkbase
Document
*
Filed herewith
72
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Kona
Gold Beverage, Inc.
Dated:	November
15, 2021
/s/
Robert Clark
President and
Chief Executive Officer
(Principal Executive
Officer)
Dated:	November
15, 2021
/s/
Lori Radcliffe
Chief Financial
Officer
(Principal Financial
Officer)
73