MGO Global Inc 10-Q for FY2023 Q1
MGO Global Inc. (MGOL)
About this 10-Q
MGO Global Inc filed this 10-Q on May 15, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).
Headline figures
Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $334.7K
- up 237.8% from $99.08K a year earlier
- Net loss
- $1.16M
- compared with a net loss of $511.07K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For the quarterly period ended
OR
For the transition period from _______ to ________
Commission file number:
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
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.
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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,” “emerging growth company” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
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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 Act). Yes
As of May 12, 2023, there were
MGO GLOBAL INC.
TABLE OF CONTENTS
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| Table of Contents |
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. Statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements, and should be evaluated as such. Investors are cautioned that such forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management and involve risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations and intentions, which are subject to change at any time at our discretion. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. Forward-looking statements include our assessment, from time to time of our competitive position, the industry environment, potential growth opportunities, the effects and events outside of our control, such as natural disasters, wars, epidemics or pandemics. Forward-looking statements often include words such as “anticipates,” “believes,” “could,” “forecast,” “estimates,” “expects,” “suggest,” “hopes,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” “targets,” “projects,” “projections,” “should,” “could,” “will,” “would” or the negative of these terms or other similar expressions.
Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that the expectation or belief will result or will be achieved or accomplished. The following include some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated:
| · | current economic conditions, including consumer spending levels and the price elasticity of our products; |
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| · | the highly competitive and evolving nature of the industry in which we compete; |
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| · | our ability to successfully manage social, political, economic legal and other conditions affecting our operations and our supply chain sources, such as political instability and acts of war or terrorism, natural disasters, disruption of markets, operational disruptions, changes in import or export laws, currency restrictions and currency exchange rate fluctuations; |
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| · | the impact of the loss of one or more of our suppliers of finished goods or raw materials; |
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| · | our ability to manage our inventory effectively and reduce inventory reserves; |
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| · | our ability to optimize our global supply chain; |
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| · | our ability to distribute our products effectively through our ecommerce store and through our growing wholesale distribution channel; |
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| · | our ability to keep pace with changing consumer preferences; |
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| · | the impact of any inadequacy, interruption or failure with respect to our information technology or any data security breach; |
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| · | our ability to protect our reputation and the reputation and images of our licensed and any future proprietary brand(s); |
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| · | unanticipated changes in our tax rates or exposure to additional income tax liabilities or a change in our ability to realize deferred tax benefits; |
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| · | our ability to comply with environmental and other laws and regulations; |
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| · | changes in our relationship with our employees and costs and adverse publicity from violations of labor or environmental laws by us or our suppliers; |
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| · | our ability to attract and retain key personnel; and |
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| · | our ability to integrate and grow potential acquisitions successfully. |
Set forth below in Item 1A, “Risk Factors” of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 31, 2023 are additional significant uncertainties and other factors affecting forward-looking statements. The reader should understand that the uncertainties and other factors listed above or identified elsewhere in this Quarterly Report and in our Annual Report are not a comprehensive list of all the uncertainties and other factors that may affect forward-looking statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. We do not undertake any obligation to update or revise any forward-looking statements or the list of uncertainties and other factors that could affect those statements. You should, however, consult further disclosures and risk factors we include in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports filed on Form 8-K.
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| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
MGO GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable |
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Related party receivable, net |
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Other current assets |
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Prepaid royalty expense |
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Prepaid expenses |
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Inventories |
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Total current assets |
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Property and equipment, net |
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Total assets |
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Liabilities and stockholders’ equity (deficit) |
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Current liabilities: |
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Accounts payable |
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Accounts payable - related party |
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Accrued liabilities |
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Accrued payroll |
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Other current liabilities |
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Current portion of loan payable |
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Loan payable – related parties |
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Total current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity (deficit): |
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Common stock, par value $ |
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Additional paid in capital |
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Accumulated deficit |
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Total MGO stockholders’ equity (deficit) |
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Non-controlling interest |
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Total stockholder’s deficit |
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Total liabilities and stockholders’ equity (deficit) |
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See accompanying notes to these unaudited condensed consolidated financial statements.
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| Table of Contents |
MGO GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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| For the Three Months Ended March 31, 2023 |
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Sales, net |
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Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Royalty expenses |
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Selling, general and administrative expenses |
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Total operating expenses |
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Operating loss |
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Other (income) expenses: |
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Finance charges |
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Gain on settlement of debt |
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Other (Income) expense, net |
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Total other (income) expenses |
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Loss before income taxes |
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Income tax (benefit) expense |
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Net loss |
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Less: net loss attributable to noncontrolling interest |
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Net loss attributable to MGO stockholders |
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Basic and diluted weighted average shares outstanding |
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Basic and diluted net loss per share to MGO stockholders |
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See accompanying notes to these unaudited condensed consolidated financial statements.
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| Table of Contents |
MGO GLOBAL INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
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| Total MGO |
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| Additional |
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Balance at December 31, 2021 |
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Share issuance for cash |
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Net loss |
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Balance at March 31, 2022 |
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Balance at December 31, 2022 |
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Share issuance for cash |
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Cashless exercise of warrants |
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Cash received from exercise of warrants |
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Net loss |
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Balance at March 31, 2023 |
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See accompanying notes to these unaudited condensed consolidated financial statements.
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| Table of Contents |
MGO GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Cash flows from operating activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation expense |
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Net changes in operating assets & liabilities: |
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Accounts receivable |
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Inventory |
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Prepaid expenses |
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Prepaid royalty expense |
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Other current assets |
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Accounts payable - related party |
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Accrued payroll - related party |
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Accounts payable and accrued liabilities |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchases of property, plant and equipment |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Shares issued for cash |
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Cash received from exercise of warrants |
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Payments to note payable |
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Repayment to loans payable |
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Repayment to loans payable – related parties |
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Borrowings from loans payable – related parties |
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Borrowings from loans payable |
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Net cash provided by financing activities |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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Supplemental disclosure of cash flow information |
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Cash paid during the period for: |
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Interest |
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Income taxes |
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See accompanying notes to these unaudited condensed consolidated financial statements.
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| Table of Contents |
MGO GLOBAL INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
NOTE 1 - ORGANIZATION AND OPERATIONS
The Messi Store
MGO Global, Inc. (“MGO”, “we”, “us”, “our”, or the “Company”) was formed on December 6, 2021, which operates through its subsidiary, MGOTEAM 1 LLC, which designs, manufactures, licenses, distributes, advertises and sells a range of products under the soccer legend Lionel (‘Leo”) Messi brand, “The Messi Brand”. The Messi Brand is a premium lifestyle brand with a sporty edge; products are primarily marketed and sold on the Company’s ecommerce site, The Messi Store, found at www.themessistore.com.
On October 29, 2018, the Company entered into a Trademark License Agreement with Leo Messi Management SL (“LMM”). LMM granted the Company a worldwide non-exclusive license in order to use Leo Messi’s Trademarks with the purpose of developing, manufacturing, trading and promoting The Messi Brand products.
On November 20, 2021, the Company entered into a Trademark License Agreement with LMM to have the worldwide license to use Leo Messi’s Trademarks for the purpose of developing, manufacturing, marketing, and promoting The Messi Brand products. The Company is to pay LMM an amount of minimum guaranteed royalties totaling Four Million Euros (
Stand Flagpoles
On March 13, 2023, we obtained a royalty-free, worldwide and exclusive license (the “License”) to the use of certain assets of Stand Co., LLC (“Stand”) for all purposes in exchange for payment of $1.00 by the Company. The License was entered into in connection with a potential acquisition by the Company of the assets related to the License. The term of the License commenced on March 15, 2023 and shall expire on the earlier of: 1) May 12, 2023, or 2) the date when the Company and Stand sign the definitive agreement for the acquisition of the assets. Licensed assets include all rights to all stock keeping units (“SKU”) of Stand sold under the names: “Roosevelt Premium 25 foot Telescoping Flag Pole Kit,” “20 Foot Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light;” any intellectual property and other intangible property related to SKUs, including but not limited to all rights to a brand name “Stand Flagpoles,” domain and website standflagpoles.com, the Meta pages associated with “Stand Flagpoles” brand name (in Facebook and Instagram); all manufacturer, distributor and customer contracts and relationships for SKUs; marketing materials; any commercialization rights; domain and administrative access to Stand’s Shopify account, Facebook Assets & Accounts; all historical digital and non-digital assets; and customer database since inception.
In support of our new flagpole business, we formed a wholly-owned subsidiary, Americana Liberty, LLC (“Americana Liberty”), on March 13, 2023, which was created to advertise and sell the licensed line of Stand Flagpoles and other related products, along with an expanding line of patriotic-themed products to be developed and marketed to consumers under our new Americana Liberty brand.
On May 11, 2023, we extended the License to December 31, 2023 in exchange for a 12-month consulting agreement with Jason Harward, the owner of Stand Co and nephew of Matt Harward, Chief Marketing Officer of the Company. The consultant shall furnish the Company with business continuity and consulting services. The services to be performed by the consultant under this agreement shall be requested in writing and agreed upon by both parties and shall be substantially similar to the following: providing general advice and counsel regarding establishment of systems and processes for direct-to-consumer (“DTC”) and ecommerce sales and operations; provide subject matter and product-level expertise in the area of flag-poles, flags, and related products; provide consultation regarding product sourcing and distribution; and assist with the establishment, operation, optimization, and maintenance of DTC and ecommerce platforms on behalf of the Company. Consultant will be compensated for services through a combination of cash or immediately available funds and restricted stock units or shares of the Company’s stock as follows: (1) cash or immediately available funds in the amount of $150,000 payable on September 30, 2023; (2) cash or immediately available funds in the amount of $200,000 payable no later than January 10, 2024, upon satisfactory performance of the consultant’s obligations under the agreement; (3) 150,000 restricted stock units of the Company issuable on May 11, 2023 and subject to vesting in equal quarterly installments throughout the term of the agreement commencing on January 31, 2024.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.
The unaudited condensed consolidated balance sheet as of March 31, 2023 was derived from the Company’s audited consolidated financial statements at that date. The accompanying unaudited, condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission, or the SEC on March 31, 2023, or the Annual Report. Interim results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.
MGOTEAM 1, LLC (“MGO LLC”) was formed on October 11, 2018, and the Company entered into a Rollover Agreement by and among MGO LLC and members of MGO LLC on December 6, 2021.
We account for that remaining minority interest in MGO LLC as non-controlling interest. Both the Company and MGO LLC were under common control, the series of contractual arrangements between the Company and MGO LLC on December 6, 2021 constituted a reorganization under common control and are required to be retrospectively applied to the consolidated financial statements at their historical amounts. The consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods. This includes a retrospective presentation for all equity related disclosures, including issued shares and earnings per share, which have been revised to reflect the effects of the reorganization in accordance with ASC 250 as of December 31, 2021 and 2020. ASC 250 requires that a change in the reporting entity from reorganization entities under common control, be retrospectively applied to the financials statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity of the transaction occurred.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The equity method of accounting is used for joint ventures and investments in Shanghai Celebrity International Trading Co., Ltd (SCIT) which the Company has significant influence but does not have effective control.
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Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash with high credit quality financial institutions; at times, such balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. Cash equivalents are recorded at cost, which approximates market value. As of March 31, 2023 and December 31,2022, the Company had a $
Accounts Receivable
Accounts receivables are carried at their estimated collectible amounts, net of any estimated allowances for doubtful accounts. We grant unsecured credit to our customer’s deemed credit worthy. Ongoing credit evaluations are performed and potential credit losses estimated by management are charged to operations on a regular basis. At the time any particular account receivable is deemed uncollectible, the balance is charged to the allowance for doubtful accounts. As of March 31, 2023 and December 31, 2022, the Company had no allowance for accounts receivable.
Inventory
Inventory consists of finished goods ready for sale and is stated at the lower of cost or net realizable value. We value inventories using the weighted average costing method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence. If the estimated realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated net realizable value.
Prepaid Royalty Expense
The Company pays
Property and equipment, net
Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of property, plant and equipment and are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:
Classification | Useful Life |
Computer | |
Equipment | |
Internal use software |
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Revenue Recognition
The Messi Store
The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
Revenue transactions associated with the sale of the Leo Messi Brand products, comprise a single performance obligation, which consists of the sale of products to customers either through direct wholesale or online sales through our website www.themessistore.com. We satisfy the performance obligation and record revenues when transfer of control to the customer has occurred, based on the terms of sale. A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product. Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control transfers to online customers at the time upon shipment. The transactions price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment terms for wholesale transactions depend on the country of sale or agreement with the customer and payment is generally required within 30 days or less of shipment to or receipt by the wholesale customer. Payment is due at the time of sale for direct wholesale and online transactions.
We sold our products directly to consumers via The Messi Store ecommerce site we operate and The Messi Store mobile app and to wholesale customers.
| · | For the three months ended March 31, 2023, the Company sold $ |
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|
|
| · | For the three months ended March 31, 2022, the Company sold $ |
Stand Flagpoles
Revenue transactions associated with the sale of Stand Flagpoles products, comprise a single performance obligation, which consists of the sale of products to customers through online sales through our website www.standflagpoles.com. We satisfy the performance obligation and record revenues when transfer of control to the customer has occurred. A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product. Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control transfers to online customers at the time upon shipment. The transactions price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment is due at the time of sale for online transactions.
Non-controlling interest
One member did not rollover his
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Foreign Currency
For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in the statements of operations as finance charges.
Segment Reporting
The Company has two reportable segments: 1) The Messi Store, which sells a range of products under the soccer legend Lionel (‘Leo”) Messi brand, “The Messi Brand;” and 2) Stand Flagpoles, which sells a range of residential flagpoles and related products direct to consumers. The chief operating decision maker is responsible for allocating resources and assessing performance and obtains financial information, being the consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flow, about the Company as a whole.
Income Taxes
The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized.
The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold is recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold is derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as income tax expense.
New Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU No. 2016-13 and did have a material impact on its financial position and results of operations.
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In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company after December 15, 2023. The Company does not expect the adoption will have any significant impact on the Company’s consolidated financial statements.
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
NOTE 4 - LIQUIDITY
The accompanying financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On March 31, 2023, the Company had cash and cash equivalents of $
Until such time that the Company implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. The Company believes that its existing working capital and its future cash flows from operating activities will provide sufficient cash to enable the Company to meet its operating needs and debt requirements for the next twelve months from the issuance date of this report.
If the Company is unable to generate significant sales growth in the near term and raise additional capital, there is a risk that the Company could default on additional obligations; and could be required to discontinue or significantly reduce the scope of its operations if no other means of financing operations are available. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or any other adjustment that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – INVENTORY
As of March 31, 2023 and December 31, 2022, inventory amounted to $
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| March 31, 2023 |
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| December 31, 2022 |
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Finished goods |
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NOTE 5 – PREPAID EXPENSES
As of March 31, 2023 and December 31, 2022, prepaid expenses amounted to $
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| December 31, 2022 |
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NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES)
Accounts payable and accrued liabilities were $
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| March 31, 2023 |
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Accounts payable |
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Total accounts payable and accrued liabilities: |
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In January 2023, the Company entered into a financing agreement for D&O insurance with BankDirect at an interest rate of
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NOTE 7 – LOAN PAYABLE
On May 25, 2022, the Company entered into a loan with PayPal with an interest rate of
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| March 31, 2023 |
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| December 31, 2022 |
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Current portion of loans payable |
| $ |
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| $ |
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NOTE 8 – RELATED PARTY TRANSACTIONS
The Company borrowed $
The accounts receivable/(payable) owed to a related party as of March 31, 2023 and December 31, 2022 was $
NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock
For the quarter ended March 31, 2022, the Company issued
On January 12, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, as representative of the underwriters, relating to the Company’s initial public offering (the “Offering”) of
The Shares were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-268484), as amended (the “Registration Statement”), and filed with the Securities and Exchange Commission (the “Commission”) and the final prospectus filed with the Commission pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement was declared effective by the Commission on January 12, 2023. The closing of the Offering for the Shares took place on January 18, 2023, raising net proceeds of $
In January 2023, the Company issued
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In January 2023, the Company issued
On January 13, 2023, in connection with the Offering, the Company commenced trading on The Nasdaq Capital Market under ticker symbol “MGOL.”
Warrants
For the year ended December 31, 2022, the Company issued five-year warrants to purchase
In January 2023, the Company issued
In January 2023, the Company issued
The following is a summary of warrant activity.
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| Number of Warrants |
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| Weighted Average Exercise Price |
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| Aggregate Intrinsic Value |
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The Company utilizes the Black-Scholes model to value its warrants. The Company utilized the following assumptions:
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| March 31, 2023 |
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Expected term |
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NOTE 10 – PREPAID ROYALTY EXPENSE
On October 29, 2018, the Company entered into a Trademark License Agreement with Leo Messi Management SL (LMM) to have the right to license the Licensed Mark. Both parties agreed to cancel the original Trademark License Agreement due to COVID-19 in 2021 and both parties were released from the obligations and responsibilities under the original Trademark License Agreement. The Company recorded the actual royalty expense paid on or before the new agreement in November 2021 since both parties agreed to waive the original payment schedule in the 2018 Trademark License agreement.
On November 20, 2021, the Company entered into a Trademark License Agreement with Leo Messi Management SL (LMM) to have the worldwide license to use Leo Messi’s Trademarks for the purpose of developing, manufacturing, marketing, and promoting products under the Company’s “The Messi Brand.” The Company is to pay LMM a minimum guaranteed amount of royalties in installments, amounting to Four Million Euros (
The Company recorded $
The following table presents the future royalty payments of the Trademark License Agreement based on exchange rate as of March 31, 2023:
Fiscal year ending December 31, |
| Amount | ||
2023 |
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| (500,000€) | |
2024 |
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| (1,500,000€) | |
Total |
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| (2,000,000€) | |
NOTE 10 – LEASES
On February 20, 2023, we signed a renewable one-year lease for a building located at 813 NE 17th Terrace, Fort Lauderdale, Florida 33304, providing for approximately
NOTE 11 – RISKS AND UNCERTAINTIES
The Company is subject to credit, liquidity, and market risks, as well as other payment-related risks such as risks associated with the fraudulent use of credit or debit cards and customer banking information, which could have adverse effects on our business and revenues due to chargebacks from customers.
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NOTE 12 – SEGMENT INFORMATION
Non-allocated administrative and other expenses are reflected in Corporate. Corporate assets include cash, prepaid expenses, notes receivable and other assets.
As of March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023 and 2022, respectively, information about the Company’s reportable segments consisted of the following:
Assets
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As of March 31, 2023 |
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Net (Loss) Income
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Three Months Ended March 31, 2022 |
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Loss from operations |
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Net income (loss) |
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NOTE 13 – SUBSEQUENT EVENTS
Stand Flagpoles License
On May 11, 2023, we extended the License with Stand Co, LLC to December 31, 2023 in exchange for a 12-month consulting agreement with Jason Harward (“Consultant”) the owner of Stand Co and nephew of Matt Harward, Chief Marketing Officer of the Company. The Consultant shall furnish the Company with business continuity and consulting services. The services to be performed by the Consultant under this agreement shall be requested in writing and agreed upon by both parties and shall be substantially similar to the following: providing general advice and counsel regarding establishment of systems and processes for direct-to-consumer (“DTC”) and ecommerce sales and operations; provide subject matter and product-level expertise in the area of flag-poles, flags, and related products; provide consultation regarding product sourcing and distribution; and assist with the establishment, operation, optimization, and maintenance of DTC and ecommerce platforms on behalf of the Company. Consultant will be compensated for services through a combination of cash or immediately available funds and restricted stock units or shares of the Company’s stock as follows: (1) cash or immediately available funds in the amount of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion should be read in conjunction with our consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our 2022 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 31, 2023. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.
Overview
Founded in October 2018 and headquartered in Florida with remote employees and specialty contractors in London, New York and Latin America, MGO Global Inc. (“MGO,”, “MGO Global”, the “Company,” “we,” “our,” and “us”) is a performance-driven lifestyle brand portfolio company focused on direct-to-consumer (“DTC”) digital commerce.
Not new to building successful global lifestyle brands, MGO’s accomplished leadership team encompasses decades of experience in fashion design, marketing, technology, corporate finance and branding. Our design team continues to push innovation and evolution of the product cycle without compromising quality and design integrity. We believe that our management’s executive-level expertise in marketing technology will empower MGO to play an important role in defining the next generation of DTC digital commerce. Our finance and accounting team is tasked with ensuring that responsible decision making is informed by our commitment to maintaining economic stability and focus on strategic growth.
With a deep understanding of analytics, personality-driven trust and algorithm-driven distribution, our marketing team is uniquely equipped to leverage emerging technologies, such as machine learning and Artificial Intelligence (“AI”), to build brands efficiently and cost-effectively with a small core team of specialists. Through our end-to-end, scalable brand-building platform, backed by robust consumer behavioral data, we are intent on building digitally native brands that thrive in the modern DTC economy.
In 2018, MGO signed a global licensing agreement with soccer player Lionel Messi and created “The Messi Brand” - a line of casual wear and accessories inspired by his trend-setting style and offered on The Messi Store. The brand’s designs focus is on accessibility and ease, much like Messi’s personal style. While this has been the only asset in our portfolio through 2022, our business model is centered on strategic expansion through collaborations, licensing, acquisitions, and organic development. We intend to drive the commercial value of each brand within our portfolio through our own DTC platform methodologies, ensuring that each brand maintains its own unique identity while remaining thoughtfully aligned with the values of its customers.
In March 2023, MGO obtained a royalty-free, worldwide and exclusive license to the assets of Stand CO, LLC, a direct-to-consumer (“DTC”), digitally-native brand which offers a line of high quality, residential flagpoles, American flags, solar flagpole light kits, flagpole finials, patriotic-themed apparel and other products. The Company’s management believes that the addition of the Stand Flagpole brand to MGO’s brand portfolio brings the Company immediate revenue generation and the opportunity to further demonstrate the benefits of its end-to-end, data-driven brand-building platform to help accelerate and optimize long-term growth. In late March 2023, the Company formed Americana Liberty, LLC, a wholly owned subsidiary focused exclusively on supporting the new DTC flagpole and related product line.
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Guided by the Company’s expertise and fueled by our team’s passion to ultimately grow MGO into a major lifestyle brand portfolio company and its brands into universally recognized symbols of excellence, MGO is committed to exceeding its partners’ and customers’ expectations by creating and delivering innovative, premium lifestyle clothing and consumer products and earning lifetime fidelity to our DTC brands through high-touch customer engagement, service and attention.
Three Months Ended March 31, 2023 as Compared to Three Months Ended March 31, 2022
Revenues
For the three-month period ended March 31, 2023, revenues climbed 238% to $334,701, up from $99,077 for the comparable three-month period in 2022. Revenue generated from sales of Messi Brand apparel, accessories and homewares totaled $289,553, representing 87% of total revenues for the three months ended March 31, 2023; and revenue contributed from the new Americana Liberty brand totaled $45,147, or 13% of overall sales for the first quarter of 2023. Newly formed following the licensing of Stand Flagpoles in early March 2023, Americana Liberty had $0 sales in the prior year’s first quarter period.
Cost of Sales
Cost of goods sold for the three months ended March 31, 2023 and 2022 were $134,012 and $31,673, respectively. This resulted in a gross profit of $200,689 for the first quarter period in 2023 compared to $67,404 for the same three-month period in 2022. The 198% increase in profit margin was attributable to the aforementioned revenue growth in the three months ended March 31, 2023, coupled with the expansion and diversity of products sold in the first quarter of 2023, including the addition of the new flagpole and related products licensed from Stand in March 2023.
Operating Expenses
For the three months ended March 31, 2023, total operating expenses climbed 211% to $1,403,045 as compared to total operating expenses of $639,577 for the three months ended March 31, 2022. The increase was largely attributable to higher selling, general and administrative expenses associated with the Company’s workforce expansion, amounting to $325,978 in the first quarter of 2023 compared to $89,450 in the first quarter of 2022; as well as increased sales and marketing expenses amounting to $387,576 in the first quarter of 2023 compared to $100,943 for the first quarter of 2022. The Company also incurred costs associated with becoming a publicly traded company in January 2023, which totaled $203,355 for the three months ended March 31, 2023.
Other Expense, net
Total other expenses for the three months ended March 31, 2023 and 2022 were $17,769 and $4,553, respectively. The 290% increase was primarily due to the remeasurement of foreign currency transactions into U.S. dollars and recorded as finance charges. In addition, other expenses included accounting for imputed interest in connection with personal loans made to the Company by related parties, offset by a gain on settlement of debt with related parties.
Net Loss
After factoring the net loss attributable to noncontrolling interest of $62,069 for the three months ended March 31, 2023, net loss increased 258% to $1,158,056, or $0.09 loss per share; as compared to a net loss after factoring the net loss attributable to noncontrolling interest of $65,655, of $511,071, or $0.05 loss per share, for the three months ended March 31, 2022.
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Cash Flows
As of March 31, 2023, cash on hand was $5,397,340, as compared to $113,952 as of December 31, 2022, an increase of 4537%. The increase was attributable to completion of the Company’s Initial Public Offering, completed on January 18, 2023 and resulting in net proceeds of $7,239,855, which is net of offering expenses of $1,385,145. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, primarily due to higher corporate overhead, higher marketing and inventory expenses and the costs of being a public company.
For the three months ended March 31, 2023, cash used in operations was $2,702,386, an increase of 1287%, as compared to cash used of $194,747 for the three months ended March 31, 2022. The increase in cash used in operations was principally due to higher prepaid royalty expense relating to the license with Leo Messi Management, as well as costs associated with accrued payroll – related party, accounts payable and accrued liabilities, and accounts payable – related party.
For the three months ended March 31, 2023, cash used in investing activities was $137,614, which compared to $0 for the three months ended March 31, 2022. The 100% increase was due to purchases of office equipment, furniture and other necessities to equip the Company’s corporate office.
For the three months ended March 31, 2023, cash provided by financing activities was $8,123,388, an increase of 2902% as compared to cash provided by financing activities of $270,569 recorded for the three months ended March 31, 2022. The increase was directly related to the completion of the Company’s IPO in January 2023.
Liquidity and Capital Resources
As of March 31, 2023, we had working capital of $5,750,403. For the three months ended March 31, 2023, we incurred a loss from operations of $1,220,125, inclusive of $307,883 for royalty expenses and $1,073,555 for selling, general and administrative expenses, including higher selling and digital marketing costs, payroll expenses, third-party logistics services, professional fees and rent expense for office space. This compared to a loss from operations of $576,725, inclusive of $343,997 for royalty payments and $295,580 for selling, general and administrative expenses, including payroll expenses, third-party logistics services and general corporate overhead. In consideration of completing our IPO in January 2023, from which we raised gross proceeds of $8,625,000, prior to deducting underwriting discounts, commissions and offering expenses, we believe the cash on hand, in connection with cash generated from revenue, will be sufficient to fund the next 12 months of operations, though there can be no guarantee. In addition, we intend to pursue other opportunities for raising capital with outside investors.
The Company has continued to realize losses from operations. However, because of our capital raise efforts, including completing our IPO in January 2023, we believe that we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements through December 2023. Our primary need for liquidity is to fund working capital requirements of our business, capital expenditures and for general corporate purposes. Our ability to fund our operations, to make planned capital expenditures, and to repay or refinance indebtedness depends on our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control.
If the Company is unable to generate significant sales growth in the near term and raise additional capital, there is a risk that the Company could default on additional obligations; and could be required to discontinue or significantly reduce the scope of its operations if no other means of financing operations are available. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or any other adjustment that might be necessary should the Company be unable to continue as a going concern.
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Off-Balance Sheet Arrangements
On March 31, 2023, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. Since our inception, except for standard operating leases, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities. We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Inflation
Over the past 18 months, inflation has adversely affected our business, financial condition, and results of operations by increasing our overall cost structure, and such affects will be further exacerbated if we are unable to achieve commensurate increases in the prices we charge our customers. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates, and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases. In addition, poor economic and market conditions, including a potential recession, may negatively impact market sentiment, decreasing the demand for sportswear and outerwear, which would adversely affect our operating income and results of operations. If we are unable to take effective measures in a timely manner to mitigate the impact of inflation, as well as a potential recession, our business, financial condition and results of operations could be adversely affected.
Climate Change
Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.
New Accounting Pronouncements
There were certain updates recently issued by the Financial Accounting Standards Board (“FASB”), most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure and Control Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the three months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Legal Proceedings
None.
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. RECENT SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
* Incorporated by reference to the Company’s Registration Statement on Form S-1 (No. 333-268484), filed with the SEC on December 30, 2022.
† | Executive compensation plan or arrangement. |
†† | portions were redacted. |
** Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 17, 2023.
*** Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MGO GLOBAL INC. |
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Dated: May 15, 2023 | By: | /s/ Maximiliano Ojeda |
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| Maximiliano Ojeda |
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| Chief Executive Officer and Chairman of the Board |
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Dated: May 15, 2023 | By: | /s/ Vincent Ottomanelli |
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| Vincent Ottomanelli |
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| Chief Financial Officer |
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EXHIBIT 10.14
COMMERCIAL LICENSE AGREEMENT
THIS COMMERCIAL LICENSE AGREEMENT ("Agreement"), dated and effective as of May 11, 2023 (the "Effective Date"), is made by and between MGO Global Inc. (“Licensee”), a Delaware corporation with its principal place of business at 1515 SE 17th Street, Suite 121, Fort Lauderdale, FL 33346 and Stand CO LLC (“Licensor” or “Stand”) a Utah limited liability company 11493 S Andover Road, South Jordan, UT 84095. The Licensee and Licensor may be referred to herein each, individually, as a “Party” and, collectively as the “Parties.”
WHEREAS, Licensor has developed a business and owns or controls certain know-how, systems, and other intellectual property rights relating to the marketing and sale of certain products;
WHEREAS, Licensee has generalized experience and expertise in product marketing, sales and commercialization in the Territory; and
WHEREAS, the Parties formed a collaboration on or about March 13, 2023 (the “Prior Arrangement”) under which Licensee licenses from Licensor the exclusive rights to operate, expand, and commercialize the know-how, systems, and other intellectual property belonging to the Licensor; and
WHEREAS, the Parties wish to formalize and extend the Prior Arrangement and license permitting Licensor the exclusive rights to operate, expand, and commercialize the know-how, systems, and other intellectual property belonging to the Licensor within the Territory on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the sum of One and ZERO/100 U.S. Dollars ($1.00) the mutual covenants and terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. License.
1.1 License Grant. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, a perpetual, fully-paid, royalty-free, worldwide, and exclusive (even as to Licensor) license, with the right to grant sublicenses, to operate and otherwise commercialize the Licensed Assets in the Territory during the Term;
1.2 Licensed Assets. For the purposes of this Agreement, “Licensed Assets” means all of the following assets of the Licensor:
(a) all rights to all stock keeping units (“SKU”) of the Licensor and sold under the names: “Roosevelt Premium 25ft Telescoping Flag Pole Kit”, “20FT Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light”, including all SKU fixed and current assets, including accounts receivable (other than Shopify and merchant account balance transfers that are pending as of the date of the commencement of the license period), existing inventory, point of sale equipment and software, files, records, displays and fixtures;
(b) any intellectual property and other intangible property related to SKUs, including but not limited to all rights to a brand name “Stand Flagpoles”, domain and website standflagpoles.com, the Meta pages associated with “Stand Flagpoles” brand name (in Facebook and Instagram);
(c) all manufacturer, distributor and customer contracts and relationships for SKUs and any commercialization rights relating to the same;
(d) (iv) all marketing materials of Stand including, without limitation, those relating to the SKUs;
(e) domain and administrative access to Stand’s Shopify account,
(f) all social media assets and accounts including, without limitation, Facebook, Twitter, Instagram and all others;
(g) all historical digital and non-digital assets including, without limitation, all of Licensor’s database information since inception.
1.3 Effect of Licensor Bankruptcy. All rights and licenses granted by Licensor hereunder are and will be deemed to be rights and licenses to "intellectual property," and any Materials to which Licensee is granted access hereunder are and will be deemed to be an "embodiment" of "intellectual property," in each case, as such term are used in and interpreted under section 365(n) of the United States Bankruptcy Code (the "Code") [11 U.S.C. § 365(n)]. Licensee has all rights, elections, and protections under the Code and all other applicable bankruptcy, insolvency, and similar Laws with respect to this Agreement and the subject matter hereof. Without limiting the generality of the foregoing, Licensor acknowledges and agrees that, if Licensor or its estate becomes subject to any bankruptcy or similar proceeding: (a) subject to Licensee's rights of election under section 365(n), all rights, licenses, and privileges granted to Licensee under the Licensed Technology will continue subject to the respective terms and conditions hereof, and will not be affected, even by Licensor's rejection of this Agreement; and (b) Licensee will be entitled to a complete duplicate of, or complete access to, as appropriate, all such intellectual property and embodiments of intellectual property, which, if not already in Licensee's possession, must be promptly delivered to Licensee or its designee, unless Licensor elects to and does in fact continue to perform all of its obligations under this Agreement.
2. Confidentiality; Publicity.
2.1 Confidentiality Obligations. Each Party acknowledges that it may receive or gain access to the other Party's Confidential Information during the Collaboration. Except as provided in Section 2.2 or otherwise agreed in writing by the Parties, each Party, as the receiving Party of the other Party's Confidential Information, shall, during the Term and for a period of thirty-six (36) months thereafter:
(a) use at least the same standard of care to protect and safeguard the confidentiality of the disclosing Party's Confidential Information as the receiving Party uses to protect its own Confidential Information (but no less than reasonable care); and
(b) not use or disclose, nor permit to be used or accessed, the disclosing Party's Confidential Information for any purpose other than to exercise the receiving Party's rights or perform its obligations under this Agreement.
2.2 Exceptions. Notwithstanding the foregoing obligations of confidentiality and restrictions on use, the receiving Party may disclose the disclosing Party's Confidential Information:
(a) to the receiving Party's employees, agents, or independent contractors who (i) have a need to know such Confidential Information to assist the receiving Party or act on its behalf in accordance with Section 2.1(b); and (ii) are bound by written agreements containing confidentiality and non-disclosure obligations at least as restrictive as those set forth in Section 2.1; provided that the receiving Party shall ensure compliance with, and be liable for any breach of, Section 2.1 by any such employees, agents, or independent contractors; and
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(b) to the extent necessary to comply with a court order or other applicable Law, including regulations promulgated by security exchanges; provided that the receiving Party shall provide prompt notice of such required disclosure to the disclosing Party and cooperate with the disclosing Party's efforts to obtain a protective order, confidential treatment, or other limitation on such required disclosure ; and
(c) to actual or prospective acquirers, licensees (including sublicensees), investors, lenders, and other financial or commercial partners (and to their respective advisors, agents, and representatives) to the extent reasonably necessary for evaluating or carrying out a transaction with such Persons, in each case under written obligations of confidentiality and non-disclosure at least as restrictive as those set forth in Section 2.1.
2.3 Equitable Relief. Given the nature of the Confidential Information and the competitive damage that a Party would suffer upon unauthorized disclosure, use, or transfer of its Confidential Information, monetary damages may not be a sufficient remedy for any breach of this Section 2. Therefore, in addition to all other remedies available at Law, a Party is entitled to specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Section 2 in accordance with Section 6.
3. Term and Termination.
3.1 Term.
(a) This Agreement is effective as of the Effective Date and shall continue through December 31, 2023, unless earlier terminated in accordance with this Section 3 or as expressly provided elsewhere in this Agreement (the "Term").
(b) Upon expiration of the Term (but not earlier termination of this Agreement):
(i) the licenses granted under Section 1.1 for the Licensed Technology will be deemed fully paid up and royalty-free; and
(ii) all other rights and obligations of the Parties under this Agreement will terminate, unless the continuation or survival thereof is expressly provided elsewhere herein.
3.2 Licensee's Termination for Convenience. At any time, Licensee may terminate this Agreement in whole, or in part, without cause by providing ten (10) written days' notice to Licensor of such termination.
3.3 Termination for Insolvency. Either Party may terminate this Agreement in its entirety immediately upon notice to the other Party if such other Party:
(a) is dissolved or liquidated or takes any corporate action for such purpose;
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(b) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due;
(c) files or has filed against it a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law;
(d) makes or seeks to make a general assignment for the benefit of creditors; or
(e) applies for or has a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
4. Representations and Warranties; Covenants.
4.1 Mutual Representations and Warranties. Each Party represents and warrants to the other that:
(a) it is duly organized, validly existing, and in good standing under the Laws of its jurisdiction of incorporation, organization, or chartering, and has the full power and authority to enter into this Agreement and to perform its obligations;
(b) the execution of this Agreement by such Party’s representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate or organizational action of such Party;
(c) when executed and delivered by such Party, this Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms; and
(d) the execution, delivery, and performance of this Agreement by such Party does not violate, conflict with, require consent under, or result in any breach of or default under (i) any applicable Law or (ii) the provisions of any contract, instrument, or understanding to which it is a party or by which it is bound.
4.2 Additional Representations and Warranties of Licensor. Licensor represents and warrants to the Licensee that, as of the Effective Date:
(a) it has the all rights and authority to grant the rights and licenses granted to Licensee hereunder, and it has not granted, and is not under any obligation to grant, to any third-party any license, lien, option, encumbrance, or other contingent or non-contingent right, title, or interest in or to the Licensed Assets that conflicts with the rights and licenses granted to Licensee hereunder;
(b) to Licensor's knowledge, there are no trademark rights in any word mark owned or possessed by any third-parties that would be infringed by the operation, use, or other commercialization of the Licensed Assets;
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(c) there is no settled, pending or threatened litigation, claim, or proceeding alleging (i) that any Licensed Asset is invalid or unenforceable; or (ii) that the use, operation, or other commercialization of any Licensed Asset does or would infringe, misappropriate, or otherwise violate any rights belonging to a third-party; or (iii) any product liability claims involving any Licensed Asset;
(d) it has no knowledge of any factual, legal, or other reasonable basis for any litigation, claim, or proceeding described in Section 4.2(c) above;
4.3 Compliance with Laws. Each Party shall comply and shall ensure that its employees, agents, and independent contractors (including subcontractors) comply with all applicable Laws in the exercise of its rights and performance of its obligations under this Agreement. Without limiting the foregoing, each Party shall, at its sole expense, obtain and maintain during the Term all certifications, credentials, authorizations, licenses, and permits necessary to conduct that portion of its business relating to the ownership, use, operation or other commercialization of the Licensed Assets.
5. Indemnification.
5.1 Indemnification by Licensee. Licensee shall indemnify, defend, and hold harmless Licensor and its Affiliates, and each of Licensor's and its Affiliates' respective officers, directors, employees, agents, successors, and assigns (each, a "LicensorIndemnified Party") from and against all Losses arising out of or resulting from any claim, suit, action, or proceeding by any third-party ("Indemnified Claim") relating to:
(a) any breach by Licensee of any representation, warranty, covenant, or obligation under this Agreement;
(b) the gross negligence or willful misconduct, or any failure to comply with applicable Law, of any employee, agent, or independent contractor of Licensee or any of its sublicensees or subcontractors in connection with this Agreement; or
except in each case to the extent any such Losses are covered by Licensor's indemnification obligations under Section 5.2 herein.
5.2 Indemnification by Licensor. Licensor shall indemnify, defend, and hold harmless Licensee and its Affiliates, and each of Licensee's and its Affiliates' respective officers, directors, employees, agents, successors, and assigns (each, a "Licensee Indemnified Party") from and against all Losses arising out of or resulting from any Indemnified Claim relating to:
(a) any breach by Licensor of any representation, warranty, covenant, or obligation under this Agreement;
(b) the gross negligence or willful misconduct, or any failure to comply with applicable Law, of any employee, agent, or independent contractor of Licensor or any of its subcontractors in connection with this Agreement;
(c) the infringement, misappropriation, or other violation of any intellectual property rights of any third-party by the use, operation, or other commercialization of the Licensed Assets by either Party.
(d) any product liability, personal injury, or property damage resulting from third-party use of any Licensed Asset.
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5.3 Indemnification Procedure. An Indemnified Party shall promptly notify the Party from whom it is seeking indemnification ("Indemnifying Party") upon becoming aware of an Indemnified Claim with respect to which the Indemnifying Party is obligated to provide indemnification under this Section 5. The Indemnifying Party shall promptly assume control of the defense and investigation of the Indemnified Claim, with counsel reasonably acceptable to the Indemnified Party, and the Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection therewith, in each case at the Indemnifying Party's sole cost and expense. The Indemnified Party may participate in the defense of such Indemnified Claim, with counsel of its own choosing and at its own cost and expense. The Indemnifying Party shall not settle any Indemnified Claim without the Indemnified Party's prior written consent (which consent may not be unreasonably withheld, conditioned, or delayed). If the Indemnifying Party fails or refuses to assume control of the defense of an Indemnified Claim, the Indemnified Party may, but is not obligated to, defend against such Indemnified Claim, including settling such Indemnified Claim after giving notice to the Indemnifying Party, in each case in such manner and on such terms as the Indemnified Party may deem appropriate. Neither the Indemnified Party's failure to perform any obligation under this Section 5.3 nor any act or omission of the Indemnified Party in the defense or settlement of any Indemnified Claim will relieve the Indemnifying Party of its obligations under this Section 5, except to the extent that the Indemnifying Party can demonstrate that it has been materially prejudiced as a result thereof.
5.4 Limitation of Liability. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, PUNITIVE, OR ENHANCED DAMAGES, OR FOR ANY LOSS OF ACTUAL OR ANTICIPATED PROFITS (REGARDLESS OF HOW THESE ARE CLASSIFIED AS DAMAGES), WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), STATUTE, OR OTHERWISE (INCLUDING THE ENTRY INTO, PERFORMANCE, OR BREACH OF THIS AGREEMENT), REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATIONS DO NOT APPLY TO A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER THIS SECTION 5; (B) LOSSES ARISING OUT OF OR RELATING TO A PARTY'S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 2 HEREOF.
6. Dispute Resolution.
6.1 Objective. The Parties recognize that disputes, controversies, or claims arising out of or in connection with this Agreement or its/their interpretation, breach, termination, or invalidity (each a "Dispute"), may from time to time occur during the Term. It is the Parties' objective to establish procedures to facilitate the resolution of Disputes in an expedient manner by mutual cooperation and without resorting to litigation. To accomplish this objective, subject to Section 6.4, the Parties shall follow the procedure set forth in this Section 6 to resolve any Dispute. Either Party may initiate the dispute resolution procedure of this Section 6 by giving the other Party notice ("Dispute Notice").
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6.2 Escalation to Executives. The Parties shall attempt in good faith to initially resolve any Dispute by good-faith discussion and negotiation between the Parties. Within ten (10) Business Days after a Dispute Notice provided to a Party in accordance with Section 6.1, representatives of each Party shall meet in person, or by teleconference, at a mutually agreeable time and place, and thereafter as often as they reasonably deem necessary, to attempt in good faith to resolve the Dispute. If the Parties are unable to resolve such Dispute within ten (10) Business Days after the Dispute Notice, then either Party may submit the Dispute for resolution by binding arbitration in accordance with Section 6.3.
6.3 Mediation. If the Parties are unable to resolve their Dispute through the procedure of 6.2 herein after good faith effort, the Dispute shall be submitted to mediation. The Parties agree to select a mutually agreeable mediator and to split the cost of mediation equally, except that each Party will pay their own attorney fees. Mediation shall take place at a mutually agreeable location, or alternatively, may be conducted remotely at the Parties’ election. If the Parties are unable to resolve their Dispute through mediation, either Party is free to pursue their claims in a court of competent jurisdiction.
6.4 Equitable Remedies; Court Proceedings. Notwithstanding the foregoing or anything to the contrary in this Agreement, either Party may initiate court proceedings in any court of competent jurisdiction without the need to follow the steps set forth in Sections 6.2 and 6.3 forany claim for injunctive or other equitable relief, including specific performance, in the event of an actual or threatened breach by the other Party of any of its obligations under this Agreement, notwithstanding any ongoing discussions between the Parties or any ongoing mediation under Section 6.3, and the Parties hereby agree that (i) any such actual or threatened breach would give rise to irreparable harm for which monetary damages would not be an adequate remedy; and (ii) a Party will be entitled to such injunctive or other equitable relief, in addition to any and all other rights and remedies that may be available to such Party at Law or in equity or otherwise in respect of such breach, without the posting of any bond or other security; or
6.5 Continued Performance. Each Party shall continue to perform its obligations under the Agreement pending final resolution of any Dispute unless continued performance would be impossible or impracticable under the circumstances. If either Party receives a Dispute Notice, then any associated time to cure will be stayed pending the resolution of the issue pursuant to this Section 6.
6.6 Attorneys' Fees. In any Dispute for which a Party is permitted to bring a court proceeding under Section 6.4, the substantially-prevailing Party will be entitled to recover its reasonable and documented attorneys' fees and court costs from the non-prevailing Party.
7. Force Majeure. Neither Party will be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement when and to the extent such failure or delay is caused by or results from events beyond the affected Party's reasonable control, including acts of God, pandemics, flood, fire, or explosion, war, terrorism, invasion, riot, or other civil unrest, embargoes, or blockades in effect on or after the Effective Date, national or regional emergency, strikes, labor stoppages or slowdowns, or other industrial disturbances, any passage of Law or governmental order, rule, regulation, or direction, or any action taken by a Governmental Authority, including imposing an embargo, export or import restriction, quota, or other restriction or prohibition, national or regional shortage of adequate power or telecommunications or transportation facilities (each, a "Force Majeure Event"). The affected Party shall give notice of the Force Majeure Event to the other Party at the earliest possible opportunity, stating the period of time the occurrence is expected to continue. The affected Party shall use Commercially Reasonable Efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The affected Party shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. If the affected Party's failure or delay remains uncured for a period of thirty (30) days following notice given by it under this Section 7, the other Party may terminate this Agreement immediately upon written notice.
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8. Assignment.
8.1 Except as otherwise expressly provided in this Agreement, neither Party may assign or otherwise transfer all or any of its rights, or delegate or otherwise transfer all or any of its obligations, hereunder without the prior written consent of the other Party (which consent may not be unreasonably withheld, conditioned, or delayed); provided, however, that Licensee may make such an assignment, delegation, or other transfer, in whole or in part, without the other Licensor's consent:
(a) to an Affiliate; provided that the assigning Party shall remain liable and responsible for the performance of all obligations and compliance with all other terms and conditions of this Agreement by such Affiliate; or
(b) in connection with the transfer or sale of all or substantially all of the business or assets of such Licensee to a third-party ("Acquirer"), whether by Change of Control, restructuring, sale of business unit or product line divestiture, or other transaction, and whether this Agreement is expressly assigned or is assumed by the Acquirer by operation of law.
8.2 No delegation or other transfer by a Party will relieve such Party of any of its obligations under this Agreement. Any purported assignment or other transfer in violation of this Section 8 is void. This Agreement is binding upon and inures to the benefit of the Parties and their respective permitted successors and assigns.
9. Miscellaneous.
9.1 Further Assurances. Each Party shall, upon the reasonable request of the other Party, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement.
9.2 Notices. Each Party shall deliver all notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a "Notice") in writing and addressed to the other Party at its address set out below (or to any other address the receiving Party may designate from time to time in accordance with this Section). Each Party shall deliver all Notices by personal delivery, nationally recognized overnight courier (with all fees prepaid), facsimile [or email] (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) upon receipt by the receiving Party; and (b) if the Party giving the Notice has complied with the requirements of this Section.
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| If to Licensor: | 11493 S Andover Road South Jordan, UT 84095 Facsimile: N/A Email: Jason@harwardmedia.com Attention: Jason Harward / Legal Copy to: jordan@cameronringwood.com |
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| If to Licensee: | 1515 SE 17th Street, Suite 121 Fort Lauderdale, FL 33346 Facsimile: N/A Email: mgo@mgoteam.com Attention: CEO & Legal Copy to: jgroves@mgoteam.com |
9.3 Interpretation. For purposes of this Agreement, (a) the words "include," "includes," and "including" will be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Sections and Schedules refer to the Sections of and Schedules attached to this Agreement; (y) to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement is to be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
9.4 Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
9.5 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes each course of conduct previously pursued or acquiesced. No course of performance or other conduct subsequently pursued or acquiesced in, and no verbal agreement or representation subsequently made by the Parties hereto, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect any obligation pursuant to this Agreement or any rights and remedies pursuant to this Agreement. The recitals and any schedules, exhibits, or attachments hereto are expressly incorporated herein by reference, and shall be deemed, construed and interpreted as part hereof. In the event of any inconsistency between the statements in the body of this Agreement and any schedule, exhibit, or attachment hereto (other than an exception expressly set forth therein), the statements in the body of this Agreement will control.
9.6 Expenses. Except as otherwise expressly provided herein or in any Commercialization Plan [or the Supply Agreement], each Party is responsible for all of its own costs and expenses in performing its obligations under this Agreement and neither Party is obligated to reimburse the other Party for any costs or expenses a Party incurs in performing such obligations.
9.7 No Third-Party Beneficiaries. Except for any Indemnified Party under Section 5, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or will confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or because of this Agreement.
9.8 Amendment; Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each of the Parties. No waiver by any Party of any of the provisions hereof will be effective unless expressly set forth in writing and signed by the waiving Party. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
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9.9 Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive and are in addition to and not in substitution for any other rights or remedies that may now or subsequently be available at Law or in equity or otherwise.
9.10 Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or other provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
9.11 Governing Law; Submission to Jurisdiction.
(a) This Agreement and all related documents, and all matters arising out of or relating to this Agreement, are governed by, and construed in accordance with, the laws of the State of New York, United States of America without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Florida.
(b) Any Dispute for which a Party is permitted to bring a court proceeding shall be instituted exclusively in the federal courts of the United States or the courts of the state and county where the defending Party received Notice under Section 9.2, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding.
9.12 Waiver of Jury Trial. Each Party irrevocably and unconditionally waives any right it may have to a trial by jury for any court proceeding arising out of or relating to this Agreement or the transactions contemplated hereby for which a Party may bring such a court proceeding.
9.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy and all of which, when taken together, shall be deemed to constitute one and the same document. This Agreement may be executed and delivered by customary or other commercially acceptable electronic means (including DocuSign or similar service, or any other electronic signature complying with the U.S. federal ESIGN Act of 2000, as the same may be amended, from time to time); a manual or electronic signature so affixed to this Agreement whose image shall have been transmitted via facsimile, e-mail or other customary electronic means shall have the same force and effect as original ink signature for all purposes.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Commercial License Agreement effective as of the Effective Date.
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| LICENSOR: |
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| Stand CO LLC | |||
| By: | /s/ Jason Harward | ||
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| Name: | Jason Harward | |
| Title: | Owner / Sole Member | ||
| (Authorized Person) | |||
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| LICENSEE: |
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| MGO Global Inc. | |||
| By: | /s/ Maximiliano Ojeda | ||
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| Name: | Maximiliano Ojeda | |
| Title: | Chief Executive Officer | ||
| (Authorized Person) | |||
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EXHIBIT 10.15
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this “Agreement”) is entered as of May 11, 2023 (the “Effective Date”) by and between MGO GLOBAL INC. (the “Company”) a Delaware Corporation with a principal address at 1515 SE 17th Street, Suite 121, Fort Lauderdale, FL 33346, and Jason Harward (the “Consultant”) an individual natural person, with a principal address at 11493 S Andover Road, South Jordan, UT 84095. Company and Consultant may be referred to herein, individually, as a “Party” and, collectively, as the “Parties.”
WHEREAS, Consultant is the owner of Stand CO LLC (“Stand”) a Utah limited liability company having a principal address at 11493 S Andover Road, South Jordan, UT 84095; and
WHEREAS, in connection with the Company’s license of the assets of Stand, the Company requests the Consultant provide business continuity services and may request the Consultant perform other related services in the future;
WHEREAS, the Company and the Consultant desire to enter into an agreement, which will define respective rights and duties as to all services to be performed; and
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, together with other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1.0 Services and Term. Beginning on the Effective Date, and remaining in effect for a term of twelve (12) months thereafter (the “Term”), the Consultant shall, upon written request from Company, furnish the Company with business continuity and consulting services (as more fully set forth in Appendix A attached hereto and made a part hereof) similar to the following:
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| · | Providing general advice and counsel regarding establishment of systems and processes for direct-to-consumer (“DTC”) and e-Commerce sales and operations; |
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| · | Provide subject matter and product-level expertise in the area of flag-poles, flags, and related products; |
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| · | Provide consultation regarding product sourcing and distribution; |
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| · | Assist with the establishment, operation, optimization and maintenance of DTC and e-Commerce platforms on behalf of the Company |
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Written requests for consulting shall state with specificity the expectation of Company and shall provide Consultant the opportunity to request clarification and/or modification regarding the scope of services prior to creating any obligation of Consultant. For avoidance of doubt, for any written request for services, the Parties shall work together to establish an agreeable scope prior to creating any obligation to be performed.
2.0 Compensation. The work performed by the Consultant shall be compensated according to the compensation plan as set forth in Appendix A, and shall not exceed the total amount specified in Appendix A.
3.0 Consultant Representations and Warranties. Beginning on the Effective Date, and remaining in effect for the duration of this Agreement, the Consultant makes the following representations and warranties:
3.1 Consultant is fully authorized and empowered to enter into this Agreement, and that his or her performance of the obligations under this Agreement will not violate any agreement between the Consultant and any other person, firm, or organization or any law or governmental regulation.
3.2 Consultant will, in good faith, attempt to notify the Company of any change(s) to the Consultant’s schedule that could adversely affect the availability of the Consultant, whether known or unknown at the time of this Agreement, no later than two (2) weeks prior to such change(s). If the Consultant becomes aware of such change(s) within the two (2) week period, the Consultant shall promptly notify the Company of such change(s) within a reasonable amount of time.
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3.3 Consultant will bear all expenses incurred in the performance of this Agreement.
4.0 Company Representations and Warranties. Beginning on the Effective Date, and remaining in effect for the duration of this Agreement, the Company makes the following representations and warranties:
4.1 The Company is fully authorized and empowered to enter into this Agreement, and that its performance of the obligations under this Agreement will not violate any agreement between the Company and any other person, firm, or organization or any law or governmental regulation.
4.2 That the Company is in full compliance with any and all laws and/or statutes applicable to the services described hereunder.
5.0 Independent Contractor Status.
5.1 The Consultant shall be an Independent Contractor of the Company only. Nothing contained in this Agreement shall be construed to create the relationship of employer and employee, principal and agent, partnership or joint venture, or any other fiduciary relationship.
5.2 The Consultant shall have no authority to act as agent for, or on behalf of, the Company, or to represent the Company, or bind the Company in any manner.
5.3 The Consultant shall not be entitled to worker’s compensation, retirement, insurance, or other benefits afforded to employees of the Company.
5.4 Taxes. Consultant shall be responsible for all items of taxation associated with furnishing of the Services. The Company shall not be responsible for any taxes attributable to Consultant including, without limitation, any taxes payable for net income or receipts, or such other taxes based on the Consultant doing business in any particular jurisdiction.
6.0 Confidential Information, Restrictive Covenants.
6.1 Generally. The Consultant and his or her employees shall not, during the time of rendering services to the Company or thereafter, disclose to anyone other than authorized employees of the Company (or persons designated by such duly authorized employees of the Company) or use for the benefit of the Consultant and his or her employees or for any entity other than the Company, any information of a confidential nature, including, without limitation, information relating to: any such materials or Intellectual Property; any of the Company projects or programs; the technical, commercial, or any other affairs of the Company; or, any confidential information which the Company has received from a third party.
6.2 Return of Confidential Information. Consultant shall, upon request of Company and/or upon termination of this Agreement, immediately return such confidential information and all copies thereof in any form whatsoever under the power or control of Consultant to Company and delete such information from all retrieval systems and databases or destroy the same as directed by Company.
6.3 Non-Competition; Non-Solicitation.
(a) Throughout the Term of this Agreement and for a period of forty-eight (48) months thereafter, Consultant agrees that he shall not do any of the following without the prior written consent of the Company, which consent may be withheld, delayed, and otherwise conditioned in the Company’s sole and absolute discretion:
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| (i) | Directly or indirectly employ, attempt to employ, recruit or otherwise solicit, induce or influence any officer, director, employee, agent or independent contractor of the Company, or its affiliated entities to disassociate from or leave employment therewith; |
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| (ii) | Directly or indirectly solicit or encourage any client, customer, supplier, vendor, distributor, agent or independent contractor of the Company to terminate or otherwise adversely modify its business relationship with the Company; or |
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| (iii) | Directly or indirectly, alone or as a member of any partnership, corporation, limited liability company or other entity, or as an officer, director, employee, agent, consultant, contractor or, in any other capacity of any corporation, limited liability company or other entity, compete in the same flag-pole market or business as the other Party, or any of its affiliated entity specifically including, any business or commercial activities relating to the flag-pole business and flag pole related product offerings of the Company. |
(b) Enforcement by Injunction. Consultant understands, acknowledges, and agrees that the covenants set forth in this Section 6 are of vital concern to the Company, that monetary damages for any violation thereof would not adequately compensate Company, that Company is engaged in a highly competitive business and that such prohibitions and restrictions are reasonable. Accordingly, Consultant agrees that remedies at law will not be adequate in the event of a breach of such provisions, and Company shall be entitled to the equitable remedy of specific performance and shall have the right to preliminary and permanent injunctive relief (without the necessity or any requirement of posting bond) to secure specific performance and to prevent a breach or contemplated breach of such covenants. Consultant agrees to indemnify and reimburse Company for any and all costs, expenses (including, but not limited to, attorney’s and paralegal’s fees, whether or not a lawsuit is filed), losses and damages paid or incurred as a result of or arising from any breach of the provisions of this Section 6.
(c) Survival and Severability. Consultant understands, acknowledges, and agrees that the provisions of this Section 6 shall survive the termination or expiration of their engagement with the Company, regardless of how any such relationship with Company may be or has been terminated. The provisions of this Section 6 are in fact, and in any case, shall be deemed to be made within the context of the license of all business assets. In addition, the provisions of this Section 6 shall be deemed to be severable, and any part hereof which may be held invalid by a court of competent jurisdiction shall be deemed automatically excluded and the remaining part shall continue in full force and effect. Furthermore, in lieu of such invalid provision, there shall be added automatically as part of this Sections 6, as appropriate, a provision as similar in terms to such invalid provision as may be possible, legal, valid and enforceable. If any of the covenants contained in this Section 6, or any part hereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the court making such determination shall have the power to reduce the duration and/or geographic area of such provision and, in its reduced form, said provision shall then be enforceable.
7.0 Intellectual Property.
7.1 Work-For-Hire; Assignment. During the course of performing under this Agreement, the Consultant and its employees, agents, or other representatives may, independently or in conjunction with the Company, develop information, produce work product, or achieve other results for the Company in connection with the services it performs for the Company under this Agreement. The Consultant agrees that any such information, work product, and other results, systems, and information developed by the Consultant and/or the Company in connection with such services (hereinafter referred to collectively as the “Work Product”) shall, to the extent permitted by law, be a “work made for hire” within the definition of Section 101 of the Copyright Act (17 U.S.C. § 101), and shall remain the sole and exclusive property of Company. In consideration of this agreement, the terms, conditions, and mutual obligations created hereunder, together with other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Consultant hereby assigns to the Company exclusively throughout the world any and all of Consultant’s right, title, and interest (choate or inchoate) in and to (a) all Work Product, ideas, inventions, concepts, business plans, and related work associated with this Agreement, the business idea of Company or otherwise upon which the Consultant and Company collaborated in relation thereto, or as otherwise outlined in Appendix A hereto, (b) all work previously developed or produced in connection with the development of the Company’s business, (c) all precursors, portions, and work in progress with respect thereto and all inventions, works of authorship, technology, information, know-how, techniques, concepts, ideas, materials, and tools relating thereto, or to the development, support, or maintenance thereof, and (d) all copyrights, patent rights, trade secret rights, trademark rights, mask works rights, sui generis database rights, and all other intellectual and industrial property rights of any sort and all business, contract rights, causes of action, and goodwill in, incorporated, or embodied in, used to develop, or related to any of the foregoing (collectively, the “Intellectual Property”). Provided that nothing in this section shall apply to, impair, or obligate the Consultant’s rights, title, and interest (choate or inchoate) in and to all Work Product, ideas, inventions, concepts, and business plans of the Consultant developed for any purpose prior to the execution of this Agreement or upon the expiration of this Agreement or otherwise outside the scope of this Agreement.
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7.2 Further Assurances; Moral Rights;
(a) Further Assurances. Consultant agrees to assist the Company in every legal way to evidence, record, and perfect the assignment set forth in Section 7.1 of this Agreement and to apply for and obtain recordation of, and from time to time enforce, maintain, and defend, such assigned rights. If the Company is unable, for any reason whatsoever, to secure the Consultant’s signature to any document it is entitled to under this Section 7.2(a), Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents, as his agents and attorneys-in-fact with full power of substitution to act for and on his or her behalf and instead of Consultant, to execute and file any such document or documents and to do all other lawfully permitted acts to further the purposes of the foregoing with the same legal force and effect as if executed by Consultant.
(b) Moral Rights; Database Rights. To the extent allowed by law, the Company and Consultant acknowledge and agree that the assignment in Section 7.1 of this Agreement includes all database rights, together with all rights of paternity, integrity, disclosure, and withdrawal and any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral” or the like (collectively, “Moral Rights”). To the extent Consultant retains any such Moral Rights under applicable law, Consultant hereby ratifies and consents to, and provides all necessary ratifications and consents to, any action that may be taken with respect to such Moral Rights by or authorized by the Company; Consultant agrees not to assert any Moral Rights with respect thereto. Consultant will confirm any such ratifications, consents, and agreements from time to time as requested by the Company.
7.3 Confidential Information. Consultant will not use or disclose anything assigned to the Company hereunder or any other technical or business information or plans of the Company, except to the extent Consultant (a) can document that it is generally available (through no fault of Consultant) for use and disclosure by the public without any charge, license, or restriction, or (b) is permitted to use or disclose such information or plans pursuant to a written authorization approved and executed by the Company prior to such disclosure. Consultant recognizes and agrees that there is no adequate remedy at law for a breach of this Section 7.3, that such a breach would irreparably harm the Company and that the Company is entitled to equitable relief (including, without limitation, injunctions) with respect to any such breach or potential breach in addition to any other remedies.
7.4 Maintenance of Privacy; Data Breaches. Consultant acknowledges that maintaining the security, privacy and integrity of confidential information, user and other proprietary data is of the utmost importance. Consultant expressly agrees to protect the privacy and safety of both user and other proprietary data and information provided in connection with this Agreement and the Services hereunder. Consultant shall take active steps to safeguard and protect such confidential information, user and proprietary data / information from unauthorized access, misappropriation or malicious attack (each a “Data Breach”) by commercially acceptable means.
8.0 Termination.
(a) This Agreement may be terminated by Company “For Cause” (as Defined herein) upon written notice to Consultant (“Termination”). Termination of this Agreement shall be “For Cause” if, in the reasonable determination of the Company:
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| i. | Consultant has breached the terms of this Agreement, and such breach or threatened breach is not cured within ten (10) days after Consultant has received written notice of such breach; or |
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| ii. | Consultant exhibits dishonesty, repeated neglect, persistent or serious deficiencies in performance, or gross incompetence in the performance of his duties under this Agreement; or |
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| iii. | Consultant breaches, or threatens to breach, his obligations under Section 6 of this agreement including, without limitation, the restrictive covenants contained therein. |
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(b) Termination of the Agreement, for any reason, shall not relieve either Party of any obligation arising out of this entire Agreement accruing prior to such termination and shall be without prejudice to rights and remedies arising from any breach of default. Termination of this Agreement for cause shall result in the forfeiture of amounts payable hereunder and immediate cessation of any and all vesting of equity-based compensation (i.e. stock, RSUs, etc.) as consideration for this Agreement.
9.0 Liability. The Company shall not be responsible for any costs incurred by the Consultant, including, without limitation, any and all fees and expenses, such as those described in Section 3.3 above.
10.0 Indemnification. The Consultant agrees to indemnify, defend, and hold harmless the Company, its affiliates, and its respective officers, directors, members, managers, agents, representatives, and employees (each an “Indemnitee” and, collectively, the “Indemnitees”) from any and all claims, demands, losses, causes of action, damage, lawsuits, judgments, including attorneys’ fees and costs, arising out of, or relating to, the Consultant’s services under this Agreement. Without limiting the generality of the foregoing, Consultant shall specifically indemnify, defend, and hold harmless the Indemnitees arising form, or in connection with, any tax and withholding obligations of the Consultant and any such obligations together with wages and compensation obligations with respect to the employees or any permitted sub-contractor of Inter. These indemnification provisions shall survive the expiration or earlier termination of this Agreement.
11.0 General Provisions.
11.1 Entire Agreement. This Agreement including any schedules, appendices, and exhibits hereto, contains the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes all prior agreements, proposals, representations, arrangements or understandings, written or oral, with respect to such subject matter. There are no representations, agreements, arrangements or understandings, oral or written, between or among the Parties relating to the subject matter of this Agreement that are not fully expressed herein. The preamble and the recitals set forth in the beginning of this Agreement are incorporated by reference hereby as if fully set forth herein.
11.2 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and each of their respective successors, heirs, and assigns.
11.3 Amendment and Waiver. No course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Parties, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect any Party's obligations pursuant to this Agreement or any rights and remedies of a Party pursuant to this Agreement. This Agreement may be amended or modified, from time to time, only by a written instrument expressly referring to this Agreement adopted by all of the Parties. No failure of a Party to exercise, and no delay by a Party in exercising, any right or remedy under this Agreement shall constitute a waiver of such right or remedy. No waiver by a Party of any such right or remedy under this Agreement shall be effective unless made in a writing duly executed by such waiving Party and specifically referring to each such right or remedy being waived.
11.4 Notices. Any notice, demand or other communication required or permitted to be given pursuant to this Agreement shall have been sufficiently given for all purposes if:
(a) delivered personally to the Party or to an executive officer of the party to whom such notice, demand or other communication is directed; or
(b) sent by registered or certified mail, postage prepaid, addressed to the receiving Party at his, her or its address set forth in this Agreement, or at such other address as may be updated from time to time in writing.
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Except as otherwise provided in this Agreement, any such notice shall be deemed to be given (5) business days after the date on which it was deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and sent as set forth in this Section.
11.5 Construction and Interpretation. The titles of the sections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. The schedules and exhibits hereto are expressly incorporated herein by reference, and shall be deemed, and shall construed and interpreted, as part hereof. Unless the context of this Agreement clearly requires otherwise:
(a) references to the plural include the singular, the singular the plural, and the part the whole,
(b) references to one gender include all genders and the neuter form,
(c) “or” has the inclusive meaning frequently identified with the phrase “and/or,”
(d) “including” has the inclusive meaning frequently identified with the phrase “including but not limited to” or “including without limitation;” and
(e) references to “hereunder,” “herein” or “hereof” relate to this Agreement as a whole.
(f) any reference in this Agreement to any statute, rule, regulation or agreement, including this Agreement, shall be deemed to include such statute, rule, regulation or agreement as the same may have been, or may from time to time be, amended, restated, revised, modified, supplemented, reenacted or succeeded.
11.6 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without such provision, and this Agreement shall be construed to the fullest extent possible as to give effect to the intentions of the provisions found to be unenforceable or invalid. The Parties agree that such court may reform such provisions so that it is reasonable under the circumstances and that such provision, as reformed, shall be enforceable, except that the material intent of the Parties in entering into this Agreement shall not be defeated or rendered impossible by the removal of such provision from this Agreement.
11.7 Choice of Law and Venue; Jury Trial Waiver. The Parties expressly agree that all the terms and provisions hereof shall be constructed under applicable U.S. federal copyright, trademark and other intellectual property laws, rules and regulations together (as applicable) with the internal laws of the State of Florida without regard such state’s conflict of laws or choice of law rules and principles. Each of the Parties hereby expressly and irrevocably consents that any action or proceeding relating to this Agreement shall be brought, at the option of the party instituting the action or proceeding, in any state court of general jurisdiction in the state and county where the defending Party receive notice under this Agreement. Each of the parties waives any objection that it may have to the conduct of any action or proceeding in any such court based on improper venue or inconvenient forum, waives personal service of any and all process upon it, and consents that all service of process may be made by mail or courier service directed to it at the address set forth herein and that service so made shall be deemed to be completed upon the earlier of actual receipt or five (5) days after the same shall have been posted. Nothing contained in this Section 11.7 shall affect the right of any Party hereto to serve legal process in any other manner permitted by law. In any action or proceeding commenced in connection with this Agreement each Party hereby expressly and IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY.
A copy of any and all service of process shall also be sent to counsel for the respective Parties set forth herein or to such other counsel or address as may be updated from time to time by the parties in a duly noticed writing:
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| If to Company: | If to Consultant: |
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| MGO Global Inc. 1515 SE 17th Street, Suite 121 Fort Lauderdale, FL 33346 Via E-Mail: mgo@mgoteam.com jgroves@mgoteam.com | Jason Harward 11493 S Andover Road South Jordan, UT 84095 Via E-Mail: jason@harwardmedia.com |
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| With copy to: | With Copy to: |
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| Carmel, Milazzo & Feil 55 W 39th St, 4th Floor New York, NY 10018 | Cameron Ringwood 6975 Union Park Ave., Suite 600 Cottonwood Heights, UT 84047 Via E-Mail: jordan@cameronringwood.com |
11.8 Enforcement Costs; Attorneys’ Fees. The prevailing party in any action to enforce this Agreement shall be entitled to recover costs and expenses including, without limitation, attorneys' fees.
11.9 Confidentiality of Terms. The terms of this Agreement are confidential to the Company and its successors and assigns. Consultant shall not make any press release or other written or oral disclosure of any nature regarding the existence, terms and provisions (including, without limitation, compensation terms) of this Agreement without the prior written approval of Company or, as the case may be, the successors and assigns thereof; provided, however, approval for such disclosure shall be deemed given to the extent such disclosure is required to comply with governmental rules.
11.10 Further Actions. The Parties agree to execute, acknowledge and deliver such additional documents, and take such further actions as may reasonably be required, from time to time, to carry out each of the provisions and the intent of this Agreement, and every agreement or document relating thereto, or entered into connection herewith.
11.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. This Agreement may be executed and delivered by electronic means; a manual signature affixed to this Agreement whose image shall have been transmitted via facsimile, e-mail or other customary electronic means shall have the same force and effect as original ink signature for all purposes.
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IN WITNESS WHEREOF, the Parties have executed this Consulting Agreement as of the Effective Date.
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| MGO Global Inc. | |||
| By: | /s/ Maximiliano Ojeda | ||
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| Name: | Maximiliano Ojeda | |
| Title: | Chief Executive Officer | ||
| (Authorized Person) | |||
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| CONSULTANT: |
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| Jason Harward |
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| By: | /s/ Jason Harward |
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| Name: | Jason Harward, Individually |
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APPENDIX A
Services, Pricing, and Taxes
Services:
The “Services” to be performed by the Consultant under this Agreement shall be requested in writing and agreed upon by both Parties, and shall be substantially similar to the following:
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| · | Providing general advice and counsel regarding establishment of systems and processes for direct-to-consumer (“DTC”) and e-Commerce sales and operations; |
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| · | Provide subject matter and product-level expertise in the area of flag-poles, flags, and related products; |
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| · | Provide consultation regarding product sourcing and distribution; |
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| · | Assist with the establishment, operation, optimization and maintenance of DTC and e-Commerce platforms on behalf of the Company |
Compensation:
Consultant shall be compensated for the services through a combination of cash or immediately available funds and RSUs or Shares of Company stock as follows:
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| 1) | Cash or immediately available funds in the amount of $150,000.00 payable on September 30, 2023. |
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| 2) | Cash or immediately available funds in the amount of $200,000.00 payable no later than January 10, 2024, upon satisfactory performance of Consultant’s obligations hereunder. |
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| 3) | 150,000 restricted stock units of MGO issuable on the Effective Date and subject to vesting in equal quarterly installments commencing on January 31, 2024. |
Taxes
The Company shall not be responsible for federal, state, and local taxes derived from the Consultant’s net income or for the withholding and/or payment of any federal, state, and local income and other payroll taxes, workers’ compensation, disability benefits, or other legal requirements applicable to the Consultant.
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EXHIBIT 31.1
CERTIFICATION
I, Maximiliano Ojeda, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2023 of MGO Global Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Omitted;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 15, 2023 |
| /s/ Maximiliano Ojeda |
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| Maximiliano Ojeda |
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| Chief Executive Officer (Principal Executive Officer) |
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EXHIBIT 31.2
CERTIFICATION
I, Vincent Ottomanelli, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2023 of MGO Global Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Omitted;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 15, 2023 |
| /s/ Vincent Ottomanelli |
|
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| Vincent Ottomanelli |
| |
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| Chief Financial Officer (Principal Financial Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of MGO Global Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Maximiliano Ojeda, Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 15, 2023
|
| /s Maximiliano Ojeda |
| |
|
| Maximiliano Ojeda |
| |
|
| Chief Executive Officer (Principal Executive Officer) |
|
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of MGO Global Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vincent Ottomanelli, Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 15, 2023
|
| /s/ Vincent Ottomanelli |
| |
|
| Vincent Ottomanelli |
| |
|
| Chief Financial Officer (Principal Financial Officer) |
|