I hope everyone had a great time celebrating Canada Day and Independence Day over the past week. With all that is going on in the world, it is a blessing to live in a part of the world where neighbours celebrate each other. Let me get a couple of things out of the way:
1. We had no idea that there was a deal in place to sell the assets of Creative Edge Nutrition, Inc. to Fresh Promise Foods. Based on all the public data and messaging coming from James, it seemed that nothing was happening and he was still trying to launch Giddy Up before “Cold Beverage Season”. I can now see that the last few statement he has made are incorrect or untruthful.
2. After promising to launch a drink over and over, we now find out that we are going to launch a Giddy Up branded pre workout powder, which will make it one of 5,000 on the open market.
3. The share structure in this 1:1 deal will create an even bigger mess than we have seen with FITX. Personally, I can’t see FINRA allowing such a structure, but things have surprised me a lot lately.
4. I think the idea of vending shareholders into a new vehicle to restore value and confidence is a step in the right direction, but why do it with a ticker that is ALSO in Skull & Crossbones Grey Market. Why not vend into a clean company that can get trading quickly (FYI, that is our plan…we have the ticker ready).
Again, where’s the drink?
5. The Asset Purchase Agreement is one thing to announce, but to get it to a point where it allowed by FINRA or OTC is questionable.
6. The timing on this seems to be coincidental to our pushing James out of FITX. By moving the assets, we have no claim to Giddy Up or any of the other IP, just a broken, empty, toxic shell.
As we stated last week, a Demand Letter was sent to James Robinson outlining the reasons behind our action and our expectations. James had until the end of day on July 5 to respond and has failed to answer any questions we posed. As a consequence to his inaction, we are prepared to proceed to the next step of filing both criminal and civil charges against James Robinson. The following is an unedited copy of the demand letter, filed on behalf of the debt holders and to the benefit of all shareholders.
Debt Holders of Creative Edge Nutrition Inc.
c/o Brian S. Payne
June 28, 2017
Chief Executive Officer of Creative Edge Nutrition, Inc.
8306 WILSHIRE BLVD STE #1674
Beverly Hills, CA 90211
- And –
URS Agents, LLC.
4625 West Nevso Dr. Ste. 2 & 3
Las Vegas, Nevada 89103
Re: Demand For James Robinson to Resign as an Officer and Director of Creative Edge Nutrition
Dear Mr. Robinson:
This letter shall serve as a demand on behalf of myself and the four (4) major debt holders (and significant shareholders) of Creative Edge Nutrition, Inc., myself, David Wiser, Daniel Payne and The Estate of Todd Thomas (these individuals are hereafter collectively referred to as the “Group”) for you to step aside as an Officer and Director of Creative Edge Nutrition due to your fraudulent and ultra vires conduct and refusal to act in the best interests of the corporation, its creditors and its shareholders. Since you have become an officer and director of Creative Edge, you have refused to comply with, and perform, your duties as the Chief Executive Officer of Creative Edge. The purpose of this Demand is; 1) for you to step aside and resign as the Chief Executive Officer (and any other office you may hold at Creative Edge, and 2) to take control of the company in order to stop the downward spiral the company has taken since you took office on January 1, 2015.
Nevada state statute, NRS 78.138, identifies the duties of Officer’s and Directors and their liability to the corporation and its shareholders. Directors and officers shall exercise their powers in good faith and with a view to the interests of the corporation. In exercising their respective powers, Officers and Directors, should do so with a view to the interests of the corporation, should consider: the long-term as well as short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation. A director or officer is individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer where the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and the breach of those duties involved intentional misconduct, fraud or a knowing violation of law. Reckless conduct satisfies the intent prong.
Nevada law defines breach of fiduciary duty as “… any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party. A fiduciary relationship is deemed to exist when one party is bound to act for the benefit of the other party.
Pursuant to Nevada law, such a relationship imposes a duty of utmost good faith to the corporation, its shareholders and its creditors. [See, Hoopes v. Hammargren, 725 P. 2d 238 (Nev. 1986)].Generally, Officers and Directors of a corporation have a fiduciary duty to the corporation, its shareholders and even its creditors (hereafter collectively referred to herein as the “Fiduciaries”). A failure to act in the best interests of the Fiduciaries is a violation of the fiduciary duty.
Since you took office on or about January 1, 2015, you have committed numerous breaches of your fiduciary duty and perpetrated frauds against the Fiduciaries. Some of these specific instances of misconduct are as follows:
1. You have misappropriated investment funds.
Between April 1, 2016 and May 25, 2016, you were wired over One Hundred Thirty Thousand Dollars ($130,000.00 hereafter the “Investment”) to complete the production and distribution of the “Giddy Up” drink. In fact, these funds were wired to the Creative Edge corporate account with the intent that the entire Investment be used to produce and distribute the Giddy Up drink. Specifically, $20,000 from Daniel and Brian Payne was to be used to pay OTC Markets, the Secretary of State of Nevada and the Company Accountant. As well, the $60,000 from David Wiser was intended to “produce cans and an initial production run of finished product.” To date nothing has been produced or distributed, and upon information and belief, the funds have disappeared. Simply put, such conduct is not only misappropriation of investment funds but embezzlement, fraudulent inducement and unjust enrichment.
2. You have misrepresented the facts in press releases.
Although you have generally failed to keep the public and shareholders apprised of the company’s status, the few press releases you released contained numerous misrepresentations. On February 17, 2015, you caused a press release to be posted to the public announcing that “the initial flavors and packaging for its Giddy Up line of energy drinks.” However, that was misrepresentationto the public and the Fiduciaries, where two years and four months later, nothing has transpired with this supposed “company saving” drink. You also represented in that press release that; “he Company has strong celebrity endorsers and sponsorships lined up to support the product launch”. To this date, contrary to your press released representations, no evidence of any such endorsements, let alone the drink distribution, are present, thus, this can only be deemed another misrepresentation.
On November 22, 2016 you posted a press release that represented the following: “[w]e are pleased to announce that we are in the final phase of completion with FINRA/SEC compliance. We are looking forward to Creative Edge Nutrition’s OTC market status to be reinstated very soon”. As of June 10, 2017, no such FINRA/SEC compliance had been performed or announced; yet another misrepresentation. In fact, in the November 22nd press release you essentially admit that the previous projections and representations as to the drink’s distribution were untrue or “failed to manifest”.
On February 24, 2017 you put out a press release stating that you were having “key” meetings with Dr. Pepper-Snapple Group regarding the production and distribution schedule. That press release specifically represents that, “[a] full report on my meeting outcomes, FINRA update and our Marketing/Promotional& Distribution plans for GIDDY UP'S product launch will be posted in early March 2017”. As of June 28, 2017, no such report about, meetings, FINRA or Distribution has been posted or press released. This is yet another misrepresentation to the Fiduciaries and the public.
3. You Refused to make the necessary Annual (and other) Filings with the Nevada Secretary of State’s Office allowing Creative Edge to be Administrative Dissolved.
Your refusal to make the necessary filings with the Nevada Secretary of State’s Office as well as FINRA and the SEC, resulted in the administrative dissolution of the company. You put Creative Edge in serious peril by allowing it to be administratively dissolved, especially where the company had been publicly trading its shares. Such misconduct is unconscionable and another obvious breach of your fiduciary duty to Creative Edge and the other Fiduciaries, and evidence that you are unfit to continue as an Officer and Director of Creative Edge.
Consequently, the above-identified breaches of your fiduciary duty, as well as instances of ultra vires and fraudulent conduct, has put Creative Edge’s very existence in jeopardy. As a result of your unlawful conduct, public trading of Creative Edge’s stock was halted and the Company delisted by the OTC, and the Company still retains the skull and crossbones symbol of delistment. Creative Edge has suffered irreparable economic damage as well as significant damage to its brand and trademark.
In addition, due to the breach of your fiduciary duty, the Group has been forced to expend significant time and funds totaling $9,000.00 paid to Nevada Secretary of State and the OTC to reinstate the company from dissolution and to begin bringing Creative Edge current of financial filings in an effort to lift the “skull and crossbones”.
Your unlawful conduct makes it evident that you are not fit to remain as an officer and director, and the Group hereby demands that:
1) you resign your position(s) as an Officer and as a director of Creative Edge; and,
2) transfer the Super Voting Rights preferred shares transferred to you as CEO in order to maintain control over the Company; and,
3) transfer the trademark and any other mark or intellectual property belonging to Creative; and,
4) pay back the $130,000.00 Investment from the Group, as well as the total amount of money expended by the Group to the State of Nevada and the OTC, as well as other costs expended to cure the company’s filing delinquencies; and
5) returning to the Company any shares of common stock you obtained or gifted unlawfully; and
6) Obtain the resignation of every other present Officer and Director of Creative Edge.
[The above-identified demands are hereafter collectively referred to as the “Demands”]
However, notwithstanding your potential criminal and civil liability to Creative Edge, its shareholders, creditors and the Group for your unlawful conduct, the purpose of this demand is to attempt to amicably resolve the issues created by your fraud and breach of fiduciary duty and bad faith. The only resolution that is appropriate under the current circumstances would be that you comply with all of the Demands by the date identified immediately below. In the event that you refuse to comply with these Demands the Group will cause a shareholder derivative suit to be filed against you individually for the economic loss to the value of Creative Edge, fraud, misrepresentation, punitive damages,and any other damages incurred, as well as contacting all applicable authorities, including, the police, the SEC, FINRA, IRS, and the OTC.
Therefore, the Group hereby demands that you heed and cure all of the above-identified Demands, including reparations to repay the investments and all costs of the group, by close of business Wednesday, July 5, 2017. In the event that you refuse to comply with all demands, the Group will be forced to pursue all Demands identified above, as well as to pursue all other legal remedies available to fully cure your misconduct. We await your response.
Please govern yourself accordingly.
Brian S. Payne
Cc: Nevada Secretary of State, Corp. Division
Nevada Attorney General
Action Stock Transfer, Inc.
Mr. Keith Landrum, Attorney
Our intention is to keep moving forward until our demands are met or a reasonable settlement is achieved. Please know that we are planning, willing and able to fix FITX, but the actions of the past few days leave us with a void in terms of next steps. Our committed goals are to restore shareholder value and launch the drink, followed by other products. We will not give up the fight!
Enjoy the rest of the week everyone…its Cold Beverage Season!!!
PS. James, if you are reading this, give me a call. You have the number.
PPS. Where’s the drink?
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