SOUPMAN, INC. - FORM 10-Q - April 22, 2013

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - SOUPMAN, INC.	Financial_Report.xls
EX-32.1 - CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - SOUPMAN, INC.	f10q0213ex32i_soupman.htm
EX-32.2 - CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - SOUPMAN, INC.	f10q0213ex32ii_soupman.htm
EX-31.2 - CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER, PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. - SOUPMAN, INC.	f10q0213ex31ii_soupman.htm
EX-31.1 - CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER, PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. - SOUPMAN, INC.	f10q0213ex31i_soupman.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ________

Commission File Number: 000-53943

SOUPMAN, INC.

(Exact name of registrant as specified in its charter)

Delaware		61-1638630
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1110 South Avenue, Suite 100

Staten Island, New York 10314

(Address of principal executive offices) (Zip Code)

(212) 768-7687

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

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

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares of common stock outstanding as of April 19, 2013 was 32,175,550

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.
Consolidated Balance Sheets

	February 28, 2013			August 31, 2012
	(Unaudited)

Assets

Current Assets
Cash	$	48,701		$	174,315
Accounts receivable - net		166,053			279,872
Inventory		335,305			-
Prepaids		47,855			26,474
Total Current Assets		597,914			480,661

Property and equipment - net		22,410			27,355

Other Assets
Accounts receivable - related party - net		23,502			2,799
Due from franchisees		6,369			5,742
Due from franchisees - related parties		41,298			-
Debt issue costs		133,189			191,358
Intangible assets - net		39,386			48,769
Deposits and other		4,800			32,188
Total Other Assets		248,544			280,856

Total Assets	$	868,868		$	788,872

Liabilities and Stockholders' Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	4,042,254		$	3,141,046
Accounts payable and accrued liabilities - related parties		345,600			224,436
Debt - net		5,149,273			4,357,059
Deferred franchise revenue		118,750			118,750
Derivative liabilities		377,561			513,493
Total Current Liabilities		10,033,438			8,354,784

Stockholders' Deficit
Preferred stock, par value $0.001; 25,000,000 shares authorized;
1,167,906 and 1,200,266 issued and outstanding		1,168			1,200
Common stock, par value $0.001; 75,000,000 shares authorized;
31,845,500 and 30,904,790 issued and outstanding		31,846			30,905
Additional paid in capital		5,968,695			5,053,684
Accumulated deficit		(14,561,535	)		(12,079,451	)
Total Stockholders' Deficit		(8,559,826	)		(6,993,662	)
Noncontrolling interest		(604,744	)		(572,250	)
Total Deficit		(9,164,570	)		(7,565,912	)

Total Liabilities and Stockholders' Deficit	$	868,868		$	788,872

See accompanying notes to financial statements

-1-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.
Consolidated Statements of Operations
(Unaudited)

	Three Months Ended February 28,						Six Months Ended February 28,
	2013			2012			2013			2012

Sales
Soup sales - net	$	567,887		$	505,717		$	1,292,273		$	836,278
Franchise sales		-			-			20,000			-
Franchise royalties		51,352			53,650			97,240			107,032
Total sales		619,239			559,367			1,409,513			943,310

Cost of sales		582,773			396,447			1,115,996			696,093

Gross profit		36,466			162,920			293,517			247,217

Operating expenses:
General and administrative		940,591			777,392			2,060,990			1,985,676
Royalties		56,250			56,250			112,500			112,500
Total operating expenses		996,841			833,642			2,173,490			2,098,176

Loss from operations		(960,375	)		(670,722	)		(1,879,973	)		(1,850,959	)

Other income (expense)
Interest income		4,477			9,405			9,383			12,162
Interest expense		(338,892	)		(105,078	)		(702,620	)		(173,791	)
Prepayment of debt penalty		(23,750	)		-			(50,250	)		-
Stock expense related to convertible notes		(17,313	)		-			(65,063	)		-
Loss on debt extinguishment		(154,942	)		-			(154,942	)		-
Change in fair value of derivative liabilities		194,558			25,228			328,887			25,228
Total other expense		(335,862	)		(70,445	)		(634,605	)		(136,401	)

Net loss including non controlling interest		(1,296,237	)		(741,167	)		(2,514,578	)		(1,987,360	)
Less: net loss attributable to noncontrolling interest		(20,584	)		(13,893	)		(32,494	)		(40,498	)
Net loss attributable to Soupman	$	(1,275,653	)	$	(727,274	)	$	(2,482,084	)	$	(1,946,862	)

Basic and diluted loss per share:	$	(0.04	)	$	(0.03	)	$	(0.08	)	$	(0.07	)

Weighted average number of common shares outstanding
during the period - basic and diluted		31,717,175			27,913,008			31,195,170			28,056,255

See accompanying notes to financial statements

-2-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Consolidated Statement of Stockholders 'Deficit

Six Months Ended February 28, 2013

(Unaudited)

	Preferred Stock $0.001 Par Value						Common Stock $0.001 Par Value				Additional Paid-in		Accumulated			Noncontrolling			Total Stockholders'
	Shares			Amount			Shares		Amount		Capital		Deficit			Interest			Deficit
Balance, August 31, 2012		1,200,266		$	1,200			30,904,790	$	30,905	$	5,053,684	$	(12,079,451	)	$	(572,250	)	$	(7,565,912	)

Stock based compensation		-			-			-		-		9,224		-			-		$	9,224

Issuance of common stock for services rendered ($0.38 - $0.72/share)		-			-			667,500		668		728,831		-			-		$	729,499

Issuance of common stock for notes payable ($0.55 - $0.65/share)		-			-			121,600		122		74,918		-			-		$	75,040

Issuance of common stock for nonpayment of notes payable ($0.40 - $0.61/share)		-			-			119,250		119		64,944		-			-		$	65,063

Warrants issued as debt issue cost		-			-			-		-		37,094		-			-		$	37,094

Conversion of preferred stock to common stock		(32,360	)		(32	)		32,360		32		-		-			-		$	-

Net loss		-			-			-		-		-		(2,482,084	)		(32,494	)	$	(2,514,578	)

Balance, February 28, 2013		1,167,906		$	1,168			31,845,500	$	31,846	$	5,968,695	$	(14,561,535	)	$	(604,744	)	$	(9,164,570	)

See accompanying notes to financial statements

-3-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

	Six Months Ended February 28,
	2013			2012
Cash Flows From Operating Activities:
Net loss - continuing operations	$	(2,514,578	)	$	(1,987,360	)
Adjustments to reconcile net loss to net cash used in operating activities
Bad debt expense		10,442			6,885
Depreciation		4,945			5,234
Amortization of intangibles		9,383			34,968
Amortization of debt discount		333,267			9,434
Amortization of debt issue cost		131,743			-
Stock issued for services		729,499			465,750
Stock issued for non payment of note payable		65,063			-
Stock based compensation		9,224			217,861
Loss on debt extinguishment		154,942			-
Change in fair market value of derivative liabilities		(328,887	)		(25,228	)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable		103,377			(96,821	)
Accounts receivable - related party		(20,703	)		3,143
Inventory		(335,305	)		-
Prepaid expenses		(21,381	)		(51,985	)
Other assets		27,388			-
Accounts payable and accrued liabilities		901,208			625,935
Accounts payable and accrued liabilities - related parties		121,164			-
Net Cash Used in Operating Activities		(619,209	)		(792,184	)

Cash Flows From Investing Activities:
Proceeds from notes receivable - franchisees		-			143,482
Proceeds from note receivable - other		-			6,000
Advance in connection with sale of franchise - related party		-			(70,084	)
Due from franchisees - related party		(41,298	)		(1,500	)
Due from franchisee		(627	)		-
Purchase of property and equipment		-			(4,682	)
Net Cash (Used in) Provided by Investing Activities		(41,925	)		73,216

Cash Flows From Financing Activities:
Proceeds from issuance of notes		672,500			641,000
Proceeds from exercise of stock options		-			100,000
Repayment of debt		(100,500	)		(79,884	)
Cash paid for direct offering costs of convertible notes payable and issuance of common stock		(36,480	)		-
Proceeds from issuance of common stock and warrants - net		-			9,000
Net Cash Provided by Financing Activities		535,520			670,116

Net decrease in cash		(125,614	)		(48,852	)

Cash at beginning of year		174,315			343,927

Cash at end of period	$	48,701		$	295,075

Supplemental disclosures of cash flow information:
Cash paid for interest	$	69,829		$	56,370
Cash paid for taxes	$	-		$	-

Supplemental disclosures of non-cash investing and financing activities:
Debt discount recorded on convertible debt	$	38,013		$	340,515
Common stock issued in connection with debt financing	$	75,040		$	-
Debt issue cost	$	37,094		$	-
Conversion of preferred stock to common stock	$	32		$	272
Reduction of accrued payroll - related party and related reduction of due from
franchise - related party	$	-		$	32,888

See accompanying notes to financial statements

-4-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

Note 1 Description of Business and Basis of Presentation

Passport Arts, Inc. (“PPOR” or the “Company”) was incorporated in the State of Nevada on December 2, 2008 and sold art from an on-line gallery. On January 31, 2011, PPOR reincorporated in Delaware, and changed its name to Soupman, Inc.

On December 15, 2010, PPOR acquired The Original Soupman, Inc. (“OSM”) and OSM’s wholly-owned subsidiary, International Gourmet Soups, Inc. (“IGS”) which owns 80% of Kiosk Concepts, Inc. (“Kiosk”), collectively “the Company” and ceased its art sales business.

The Company manufactures and sells a variety of soups to grocery chains and franchisees.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they may not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.

The unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended August 31, 2012, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operation, for the year ended August 31, 2012. The interim results for the period ended February 28, 2013 are not necessarily indicative of results for the full fiscal year.

Reclassification

The Company has reclassified certain prior year amounts to conform to the current period. These reclassifications had no effect on the financial position, results of operations or cash flows for the periods presented.

Recent Accounting Pronouncements

There are no new accounting pronouncements that have any impact on the Company’s consolidated financial statements.

Note 2 – Debt

Debt consists of the following at February, 28, 2013 and August 31, 2012:

	February, 28, 2013			August 31, 2012
A. Convertible debt – Unsecured – Derivative Liabilities	$	265,000		$	570,250
Less : debt discount		(16,153	)		(140,822	)
Convertible debt – net		248,847			429,428

B. Convertible debt – Unsecured		2,029,750			650,000
Less : debt discount		(167,726	)		(263,266	)
Convertible debt – net		1,862,024			386,734

C. Notes – Secured		2,990,902			2,990,897

D. Notes – Unsecured		47,500			550,000

Total debt	$	5,149,273		$	4,357,059

Debt in default consists of secured and unsecured notes totaling $2,510,652 and $1,462,500 at February 28, 2013 and August 31, 2012, respectively.

-5-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

The corresponding debts above are more fully discussed below:

(A) Convertible Debt – Unsecured – Derivative Liabilities

During the six months ended February 28, 2013, the Company issued convertible unsecured debt and warrants that had an embedded conversion feature. The convertible debt includes the following terms:

		February 28, 013
Interest Rate			8	%
Default interest rate			N/A
Maturity		March 21, 2013 to May 30, 2013
Conversion terms	Fixed conversion price of $1.00		265,000
		$	265,000

The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above. In addition the Company issued 66,250 3-year warrants in connection with these convertible notes.

The Company classifies embedded conversion features in these notes and warrants as a derivative liability due to the existence of anti-dilution provisions in the form of a ratchet feature; see Note 3. These notes will automatically convert into common shares of the Company on the same terms and conditions as provided to the then new investor(s), but only if the Company raises $2 million or more in additional funding.

During the six months ended February 28, 2013 the Company repaid $100,500 of its convertible unsecured debt - derivative liability and paid an early payment penalty of $50,250, which is shown on the Company’s consolidated statement of operations as a loss entitled “Prepayment of debt penalty.”

Balance - August 31, 2012	$	570,250
Borrowings during the six months ended February 28, 2013		265,000
Repayment of Debt		(100,500	)
Reclassification to convertible debt		(469,750	)
Balance – February 28, 2013	$	265,000

(B) Convertible Debt – Unsecured

During the six months ended February 28, 2013 the Company issued convertible debt. The convertible debt includes the following terms:

Interest Rate		12%
Default interest rate		N/A
Term	1 year
Maturity	September 20, 2013 to October 15, 2013
Conversion terms # 1	58% of the average of the lowest 3 of the prior 10 trading days prior to conversion date	103,500
Conversion terms # 2	Fixed conversion price of $0.75	304,000

The debt holders of conversion terms # 1 are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above but only if such note is not repaid with interest within 180 days.

The debt holders of conversion terms # 2 are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above. In addition, the Company issued 121,600 shares of its common stock in connection with these convertible notes (which was recorded as debt discount); see note 2(E). Debt holders also received 31,750 shares of the Company’s common stock because their loans were not repaid within 3 months from the date of the loan.

In connection with borrowings during the six months ended February, 28, 2013, the Company incurred debt issue costs of $73,573 ($36,479 in connection with cash paid and $37,094 in connection with warrants issued.) The Company amortized $30,410 in connections with these borrowings; in addition, and in connection with borrowings in fiscal year 2012, the Company amortized an additional $101,333 during the same period.

The fair value of the warrants issued as debt issue cost were calculated using Black Scholes; the significant assumptions used in estimating fair value are set out below.

Exercise price	$	0.75
Expected dividends		0
Expected volatility		106% -109%
Expected term: convertible debt and warrants	3 years
Risk free interest rate		0.31% - 0.41%

-6-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

Should the Company raise $1 million in this series of notes (in which $954,000 has been raised), all debt holders of this series of notes could receive either a portion (not to exceed the full amount) of their investment or the full amount of their investment back prior to maturity based on additional funding. The amount received shall be either 8% of the then funded amount (if additional funding is less than $3 million) or an amount equal to 100% of their investment plus accrued interest if the additional funding is in excess of $3 million. To date, the amount raised under this investment has not exceeded $1 million; therefore no amounts are due investors.

In addition, in the event the Company defaults on these loans (defined as nonpayment of note within three months after maturity) debt holders at their option, may convert the amount then due (including accrued interest) into common shares of the Company at a 35% discount to the average of the then lowest three days closing prices for the then preceding 20 days. As of the date of this filing, no notes were in default; however should the Company default on these notes, they will at that time be treated as a derivative liability.

Convertible debt consists of the following activity and terms:

Balance - August 31, 2012	$	650,000
Borrowings during the six months ended February 28, 2013		407,500
Reclassification from derivative debt		469,750
Reclassification from demand debt		502,500
Balance – February 28, 2013	$	2,029,750

Secured notes consist of the following activity and terms:

			Interest Rate (Range)	Maturity Date (not in default)
Balance - August 31, 2012	$	2,990,897	7% - 12.25%	September 1, 2013
Payments/Adjustments		5
Balance – February 28, 2013	$	2,990,902

During the six ended months ended February 28, 2013 the Company accrued $132,775 in interest on its secured debt and made payments of $61,921 on accrued interest.

Secured notes are secured by all the assets of the Company.

(D) Notes - Unsecured

Unsecured notes at February 28, 2013 consist of the following:

Amount		Information	Status
$	10,000	Represents an advance from a third party.	Due on demand
$	37,500	The Company is in litigation regarding this debt; see Note 5.	Due on demand

Demand debt consists of the following activity and terms:

Balance - August 31, 2012	$	550,000
Reclassification to convertible debt		(502,500	)
Balance – February 28, 2013	$	47,500

-7-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

(E) Debt discount

For the six months ended February 28, 2013, the Company recorded debt discounts totaling $113,053.

Debt discount – net consists of $16,153 related to notes that contained embedded conversion options that are required to be bifurcated and reported at fair value (see Note 2 (A) and $167,726 related to convertible debt that contained a beneficial conversion feature (see Note 2 (B)).

	February 28, 2013
Total outstanding debt	$	5,333,148
Debt discount		(1,037,392	)
Amortization of debt discount to interest expense		853,517
Debt – net	$	5,149,273

The Company recorded debt discount relating to its derivative liabilities to the extent of gross proceeds raised in its debt financing transactions, and immediately expensed the remaining value of the derivative if it exceeded the gross proceeds of the note.

-8-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

Note 3 – Derivative Liabilities

The Company identified conversion features embedded within convertible debt and warrants (see Note 2(A)).

The fair value of the Company’s derivative liabilities at February 28, 2013 and August 31, 2012 is as follows.

	February 28, 2013			August 31, 2012
Derivative liabilities– August 31, 2012	$	513,493		$	-
Fair value at the commitment date for convertible notes		18,026			404,194
Fair value at commitment date for warrants issued		19,987			251,784
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability		-			(117,345	)
Loss on debt extinguishment		154,942			340,927
Fair value mark-to-market adjustment		(328,887	)		(366,067	)
Derivative liabilities– February 28, 2013	$	377,561		$	513,493

The fair value at the commitment and re-measurement dates for convertible debt and warrants that are treated as derivative liabilities with embedded conversion features were based upon the following management assumptions for the six months ended February 28, 2013:

	Commitment Date			Re-measurement Date
Exercise price	$	0.80 - $1.00		$	0.80 - $1.00
Expected dividends		0	%		0	%
Expected volatility		104% -110	%		96% - 163	%
Expected term: convertible debt and warrants	6 months – 3 years			1 month – 2.75 years
Risk free interest rate		0.14% - 0.36	%		0.07% - 0.36	%

Modification of underlying debt

During the six months ended February 28, 2013, the Company negotiated a total of 7 modifications to five of its underlying unsecured convertible notes (two notes being modified twice during the six months ended), all of which had an embedded conversion feature. For each modification, the Company compared the fair value of both the old and new convertible debt as well as the fair value of the warrants granted in the modification; all calculations were done using the Black Scholes pricing model. The Company determined that the present value of the cash flows associated with the new convertible debt and warrant instruments exceeded the present value of the old convertible debt and warrants by more than 10%, which resulted in the application of extinguishment accounting; the Company recorded a loss on debt extinguishment, calculated as the difference between the old and new debt, of $154,942 in the Company’s consolidated statements of operations.

The modification to the notes was to extend the maturity dates of the notes only. All notes were extended each time for an additional four months; In addition, all of the notes had previously been extended in 2012. Including all extensions in 2012 and 2013, the Company has issued the note holders 926,500 additional 3-year warrants to purchase the Company’s stock at $0.80 per share which are in addition to the 283,500 warrants issued with the original debt in 2012.

Note 4 Stockholders’ Deficit

(A) Series A – Convertible Preferred Stock

Series A convertible preferred stock consists of the following activity for the six months ended February 28, 2013:

Balance - August 31, 2012	$	1,200,266
Shares converted to common stock		(32,360	)
Balance – February, 28, 2013	$	1,167,906

(B) Common Stock

For the six months ended February 28, 2013 the Company issued the following shares of common stock:

Type	Shares		Fair value		Range of value per share
1. Stock issued for services		667,500	$	729,499		$0.38 - $0.72
2. Stock issued in connection with convertible debt (see Note 2(B))		121,600	$	75,040		$0.55 - $0.65
3. Stock issued in connection with notes payable (see Note 2(B))		119,250	$	65,063		$0.40 - $0.61

-9-

Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

Unless otherwise indicated, fair value for the share issued was based upon the quoted closing trading price on the dates shares were issued.

In June of 2012, the Company entered into an employment agreement with one of its directors. Under the agreement the Company agreed to issue the following assuming the director is still employed by the Company:

(1)	200,000 shares of common stock on June 1, 2013

(2)	200,000 shares of common stock on January 1, 2014

(3)	200,000 shares of common stock on June 1, 2014

(4)	200,000 shares of common stock on January 1, 2015

(5)	Up to 400,000 shares of common stock if the Company’s stock price reaches certain targets

(6)	Up to 500,000 shares of common stock based on future sales of the Company

The Company determined the agreement contains a combination of service, market and performance conditions as defined under ASC 718. Additionally, the Company determined the fair value of these awards to be $1,033,350. During the six months ended February 28, 2013, $326,409 of compensation cost was recognized under this agreement, leaving $706,941 of compensation cost to be recognized through June 13, 2015.

In December of 2012, the Company entered into an agreement with a consultant. Under the agreement the Company agreed to issue 25,000 shares of common stock that vest in three months from the grant date, 25,000 shares of common stock that vest 18 months from the grant, and an additional 5,000 shares per certain incremental future sales of the Company. The Company determined the agreement contains a performance condition as defined under ASC 718. Additionally, the Company determined the fair value of these awards to be $35,994. During the six months ended February 28, 2013, $15,497 of compensation cost was recognized under this agreement, leaving $20,497 of compensation cost to be recognized through December 3, 2014.

In January of 2013, the Company entered into an agreement with a consultant. Under the agreement the Company agreed to issue 150,000 shares of common stock that vest in six months from the grant date and 150,000 shares of common stock that vest on December 31, 2013. The Company determined the fair value of these awards to be $143,970. During the six months ended February 28, 2013, $35,993 of compensation cost was recognized under this agreement, leaving $107,978 of compensation cost to be recognized through December 31, 2013.

The Company issued no stock options during the six months ended February 28, 2013. The Company expensed $9,224 for the six months ended February 28, 2013 related to stock options.

(D) Stock Warrants

The following is a summary of the Company’s stock warrant activity for the six months ended February 28, 2013:

	Number of Warrants		Weighted Average Exercise Price
Balance at August 31, 2012		1,952,135	$	.98
Granted		863,050	$	.81
Exercised		-		-
Forfeited		(129,783)		81
Balance at February, 28, 2013		2,685,402	$	.92

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Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

	Warrants Outstanding						Warrants Exercisable
Range of exercise price	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Intrinsic Value
$0.75 -$1.25		2,685,402		2.46	$	.92		2,685,402		.92	$	0

Note 5 Commitments and Contingencies

Commitments

The Company is obligated to pay the minority stockholder of Kiosk an amount equal to 3% of the gross sales of all of its soup on the first $50,000,000 of gross sales, 2% on gross sales between $50,000,000 and $75,000,000, and 1% on gross sales thereafter. The Company is required to pay a minimum of $225,000 per year if the gross sales threshold is not met. Payments are due quarterly for ongoing services through June 30, 2014 and if these services, such as changing recipes, are not performed, payments would not be due. Future annual payments are as follows:


2013 (remaining 6 months)	$	112,500
2014		187,500
Total	$	300,000

For the six months ended February, 2013, and 2012, the Company recorded a royalty expense of $112,500.

The Company is obligated to issue 10,000 shares of its common stock to a key employee each month. In addition the Company has agreed to issue an additional 800,000 shares (400,000 each on June 1, 2013 and June 1, 2014) to its Chairman, plus up to an additional one-million shares based on the Company sales and stock performance.

The Company is obligated to pay a consultant 167,108 shares, which vest monthly through July 2013.

Litigations, Claims and Assessments

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.

On September 21, 2009, a former Chairman of the Board of Soup Kitchen as successor to Commerce Bank (the “lender”) commenced an action to enforce certain guarantees given by the defendants to the lender regarding Soup Kitchen’s defaulted loan. In August 2011 the Company entered into a forbearance agreement with this individual which was extended in August 2012 to September 2013; see Note 2(C).

On May 31, 2010, a chapter 7 petition for involuntary bankruptcy was filed against Soup Kitchen.

On October 26, 2010, a third party action was filed in the Soup Kitchen bankruptcy case by the defendants against the Company, certain principals of the Company and other third parties. The action seeks, among other things, to invalidate the Company’s purchase of assets from Soup Kitchen. The Company is defending this action believing it to be without merit, especially in the light of the facts that (1) an independent appraisal was performed prior to the asset transfer, (2) an additional independent appraisal was performed by a third party in May of 2012, which showed Soup Kitchen had no value, (3) the Company paid $100,000 in cash and guaranteed secured debt in the amount of approximately $3,670,000; and (4) shareholder approval was obtained. Mediation in this case is still ongoing.

Soupman, Inc. is one of several defendants in a lawsuit filed by Gourmet Sales and Marketing, LLC (“GSM”) in July 2011. GSM claims that it is owed $37,500 in sales commissions based upon an August 2009 sales and marketing agreement. Aside from the claim for an accounting, compensatory damages and/or punitive damages are demanded with respect to the other claims. The Company served its answer to the complaint in October 2011, in which they denied the allegations of the complaint with respect to the claims of liability and asserted numerous defenses and affirmative defenses. The matter is now in the discovery phase of litigation. In Company counsel’s opinion, the complaint lacks merit as the agreement that forms the basis of GSM’s claims may be invalid and unenforceable, GSM is not owed any money, and the Company believes that punitive damages are without basis.

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Soupman, Inc. and Subsidiaries and Soup Kitchen International, Inc.

Notes to the Consolidated Financial Statements

February 28, 2013

(unaudited)

No assurance can be given as to the ultimate outcome of these actions or its effect on the Company. If the Company is not successful in its defense of these actions it could have a material adverse effect on its business, as well as current and expected future operations.

Note 6 Going Concern

As reflected in the accompanying financial statements, the Company had a net loss of approximately $2.5 million and net cash used in operations of approximately $0.6 million for the six months ended February 28, 2013, and a working capital deficit of approximately $9.4 million and a stockholders’ deficit of approximately $9.2 million at February 28, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue its operations is dependent on management's plans, which may include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur liabilities with certain related parties to sustain the Company’s existence.

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues will be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

In response to these problems, management has taken the following actions:

●	seeking additional third party convertible debt financing
●	Seeking to open new franchise locations; and
●	allocating sufficient resources to continue advertising and marketing efforts

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 7 Subsequent Events

From March 1, 2013 until the date of this filing, $47,500 of the Company’s convertible debt has matured and the Company has not yet repaid this debt; see Note 2(D).

From March 1, 2013 the Company issued $687,500 in 12% convertible 1-year notes and 171,875 5-year common stock warrants exercisable at $0.75 per share.

From March 1, 2013 until the date of this filing, the Company issued 233,750 shares of common stock for services rendered, having an aggregate fair market value of $113,465 based upon the quoted closing trading prices on the dates issued.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following analysis of our consolidated financial condition and results of operations for the quarter ended February 28, 2013 should be read in conjunction with the consolidated financial statements, including footnotes, and other information presented elsewhere in this Quarterly Report on Form 10-Q and the risk factors and the financial statements and the other information set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 14, 2012.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition.

Cautionary Note Regarding Forward-Looking Statements

This report and other documents that we file with the Securities and Exchange Commission contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about our future performance, our business, our beliefs and our management’s assumptions. Statements that are not historical facts are forward-looking statements. Words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “sustain”, “on track”, “believe,” “seek,” “estimate,” “anticipate,” “may,” “assume,” and variations of such words and similar expressions are often used to identify such forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, those described in our reports that we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, we undertake no obligation to update publicly any forward-looking statements after the date they are made, whether as a result of new information, future events, changes in assumptions or otherwise.

General

Overview

On December 15, 2010, we entered into a Merger Agreement in which The Original Soupman, Inc. (“OSM”) was merged with and into OSM Merge, Inc. our subsidiary. All the shares of OSM were converted into an aggregate of 14,004,230 shares of our common stock and 1,987,783 shares of our preferred stock. In addition, principal and interest on $4,673,000 of OSM’s convertible notes were converted into 4,830,256 shares of our common stock.

On January 31, 2011, we reincorporated in Delaware and changed our name from Passport Arts, Inc. to Soupman, Inc. Thereafter, our stock began trading on the OTC-Bulletin Board under the symbol SOUP.

We currently manufacture and sell soup to grocery chains, the New York City School System and other outlets and to our franchised restaurants under the brand name “The Original Soupman”. Our brand is well known throughout the industry and our Chicken Vegetable soup has been rated as the best chicken soup in America by Consumer Reports.

Our Company manufactures and sells soups under the “Original SoupMan” brand. We sell our soups in a new innovative Tetra-Recart self stable packaging in the canned soup aisle where most “heat & serve” retail soup purchases are made. We believe that with the new, shelf-stable, Tetra-Recart packaging that allows our soups to be displayed in the canned soup aisle, and many consumers will choose the SoupMan’s famous soups from Al Yeganeh over the other typical inferior tasting canned soups. We believe we will capture the health conscientious consumers who are aware that recent reports have warned consumers that canned products contain BPA, a known cancer causing agent. Tetra Recart packaging is BPA free and recyclable.

We also have franchised and licensed restaurants in specifically designated heavy traffic locations such as casinos, airports, and other travel destinations including the Mohegan Sun Casino in Connecticut. We sell the Original SoupMan soups in bulk 8 lb. frozen “heat ‘n serve” pouches to our franchised and licensed restaurants. The bulk 8 lb. pouches are also used for the Original SoupMan soups and products which we sell to the New York City Public School system.

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Results of Operations – Six Months ended February, 28, 2013

The following table summarizes our operating results for the six months ended February 28, 2013 and February, 29, 2012.

	February,28, 2013			February 29, 2012
Revenue	$	1,409,513		$	943,310
Cost of sales		1,115,996			696,093
Gross profit		293,517			247,217
Operating expenses		2,173,490			2,098,176
Other income (expense)		(634,605	)		(136,401	)
Net loss including noncontrolling interest		(2,514,578	)		(1,987,360	)
Less: net loss attributable to noncontrolling interest		(32,494	)		(40,498	)
Net loss attributable to Soupman		(2,482,084	)	$	(1,946,862	)

For the six months ended February 28, 2013 and February 29, 2012, soup sales accounted for 92% and 89% of overall revenues, and franchise revenues accounted for the remaining 8% and 11% respectively. The increase in soup sales of approximately 55% was primarily attributed to the sales of our new shelf stable Tetra Recart carton soups.

Net loss attributable to Soupman for the six months ended February 28, 2013 was $2,482,084, or $0.08 per share (basic and diluted) compared to a loss of $1,946,862 or $0.07 per share (basic and diluted) for the six months ended February 29, 2012. The net loss increase of $535,222 was primarily attributable to an increase in interest expense as a result of higher debt and the effect of derivative expenses from the increase in convertible notes.

Cost of Sales as a percent of soup revenues was 86% for the six months ended February 28, 2013 compared to 83% for the six months ended February 29, 2012. This percentage increase in cost of sales wasnot an increase in our costs of sales; it is, however, directly related to the net effect slotting fees have on reducing revenue.

Operating expenses for the six months ended February 28, 2013 and February 29, 2012 were $2,173,490 and $2,098,176, respectively and as a percentage of total revenue were 154% and 222%, for the respective periods. The operating expenses for the six months ended February 28, 2013 and February 29, 2012 include approximately $729,499 and $465,750 of expenses for the issuance of shares for services and $9,224 and $217,861 for share based payments; approximately $574,111 and $512,551 for payroll, payroll taxes and benefits; $363,146 and $423,688 in professional fees which include legal, accounting, strategic planning, public relations and branding and marketing; $94,887 and $91,980 for promotion; $112,500 for both years for royalties; $40,659 and $3,868 for advertising; and $36,791 and $65,416 for insurance.

Other expenses for the six months ended February 28, 2013 were $634,605 compared to $136,401 for the six months ended February 29, 2012. The increase is primarily due to an increase in interest expense on new convertible notes issued and as a result of the accounting for the derivative value of such debt. We also had costs associated with the issuance of stock in conjunction with the issuance of convertible notes which was charged to other expense.

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Results of Operations – Three Months ended February, 28, 2013

The following table summarizes our operating results for the three months ended February 28, 2013 and February, 29, 2012.

	February,28, 2013			February 29, 2012
Revenue	$	619,239		$	559,367
Cost of sales		582,773			396,447
Gross profit		36,466			162,920
Operating expenses		996,841			833,642
Other income (expense)		(335,862	)		(70,445	)
Net loss including noncontrolling interest		(1,296,237	)		(741,167	)
Less: net loss attributable to noncontrolling interest		(20,584	)		(13,893	)
Net loss attributable to Soupman		(1,275,653	)	$	(727,274	)

For the three months ended February 28, 2013 and February 29, 2012, soup sales accounted for 92% and 90% of overall revenues, and franchise revenues accounted for the remaining 8% and 10% respectively. The increase in soup sales of approximately 12% was primarily attributed to the sales of our new shelf stable Tetra Recart carton soups. The sales of $567,887 for the three months ended February 28, 2013 have been reduced by approximately $168,377 for slotting fees paid in accordance with accounting rules.

Net loss attributable to Soupman for the three months ended February 28, 2013 was $1,275,653, or $0.04 per share (basic and diluted) compared to a loss of $727,274 or $0.03 per share (basic and diluted) for the three months ended February 29, 2012. The net loss increase of $548,379 was primarily attributable to slotting fees mentioned above; an increase in stock issued for services and an increase in interest expense as a result of higher debt and the effect of derivative expenses from the increase in convertible notes.

Cost of Sales as a percent of soup revenues was 103% for the three months ended February 28, 2013 compared to 78% for the three months ended February 29, 2012. This increase is attributable to the effect that slotting fees, expenses for the roll out of the new product and promotions has as a result of decreasing revenue for those fees as per accounting rules. Had the slotting fees not been incurred, the cost of sales would have been 79%.

Operating expenses for the three months ended February 28, 2013 and February 29, 2012 were $996,841 and $833,642, respectively and as a percentage of total revenue were 161% and 149%, for the respective periods. The operating expenses for the three months ended February 28, 2013 and February 29, 2012 include approximately $437,167 and $78,223 of expenses for the issuance of shares for services and share based payments; approximately $304,709 and $252,664 for payroll, payroll taxes and benefits; $83,311 and $279,776 in professional fees which include legal, accounting, strategic planning, public relations and branding and marketing; $5,382 and $63,590 for promotion; $56,250 for both years for royalties; and $12,822 and $32,811 for insurance.

Other expenses for the three months ended February 28, 2013 were $335,862 compared to $70,445 for the three months ended February 29, 2012. The increase is primarily due to an increase in interest expense on new convertible notes issued and as a result of the accounting for the derivative value of such debt and costs associated with the issuance of stock in conjunction with the issuance of convertible notes which was charged to other expense.

Liquidity and Capital

	As at February 29,, 2013			As at August 31, 2012
Current assets	$	597,914		$	480,661
Current liabilities	$	10,033,438		$	8,354,784
Working capital (deficit)	$	(9,435,524	)	$	(7,874,123	)

At February 28, 2013, we had cash of $48,701 as compared to $174,315 at August 31, 2012. Our working capital deficit at February 28, 2013 was $9,435,524 as compared to $7,874,123 at August 31, 2012. The increase of $1,561,401 is attributable primarily to increases in accounts payable and accrued expenses and convertible debt and a decrease in accounts receivable. These were partially offset by increases in inventory and prepaid expenses. It should also be noted that included in the current liabilities as at February 28, 2013 are the current liabilities in the amount of $4,978,625 of Soup Kitchen International, Inc. a company not owned by us but included, for accounting purposes, in the financial statements as a “variable interest entity”, which negatively impacts the total working capital deficit shown above (see note 3 Variable Interest Entities to the Soupman, Inc. and subsidiaries and Soup Kitchen International, Inc. Financial Statements).

For the six months ended February 28, 2013 cash used in operating activities was $619,209 as compared to $845,212 for the six months ended February 29, 2012. Our primary uses of cash from operating activities for the six months ended February 28, 2013 were losses from operations and an increase in inventory offset by increases in stock issued for services, amortization of dent discount and debt issue costs and increases in accounts payable and accrued expenses.

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Net cash used in investing activities for the six months ended February 28, 2013 was $41,925, which is a result of an increase in due from franchisees.

Net cash provided by financing activities for six months ended February 28,, 2013 was $535,520 which includes proceeds from the issuance of convertible notes of $672,500, debt extinguishment of $154,942 which were offset by repayment of debt of $100,500.

Current and Future Financing Needs

We have incurred a stockholders’ deficit of $9,164,570 through February 28,, 2013 and have incurred a net loss of $2,514,578 for the six months ended February28, 2013. We have incurred negative cash flow from operations since inception and have primarily financed our operations through the sale of stock and convertible notes. At February 28,, 2013, we had debt of $5,149,273 and a working capital deficit of $9,435,524. These factors raise substantial doubt about our ability to continue as a going concern. Our debt in the amount of $5,149,273 includes a guarantee of Soup Kitchen International Inc’s debt in the amount of $2,990,897 all of which is past due. See Note 8 of the Notes to Consolidated Financial Statements included in the report. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including the promotion of our new shelf stable tetra recant packaging, our advertising and marketing campaign, and fees in connection with regulatory compliance and corporate governance. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. If our anticipated sales for the next few months do not meet our expectations, our existing resources will not be sufficient to meet our cash flow requirements. Furthermore, if our expenses exceed our anticipations, we will need additional funds to implement our business plan. We will not be able to fully establish our business if we do not have adequate working capital so we will need to raise additional funds, whether through an offering of our securities or otherwise.

We are obligated to pay the minority stockholder of Kiosk a royalty equal to 3% of the gross sales of all of its soup on the first $50,000,000 of gross sales, 2% on gross sales between $50,000,000 and $75,000,000, and 1% on gross sales thereafter. We are required to pay a minimum of $225,000 per year if the gross sales threshold is not met. Payments are due quarterly for ongoing services through June 30, 2014. The annual payments are as follows:

Years Ending August 31,
2013 (remaining 6 months)	$	112,500
2014		187,500
Total		300,000

We are currently seeking additional funding from investors as well as an investment bank for an operating line of credit secured by receivables and inventory. In 2013, we raised $407,500 from the issuance of two convertible notes, which we believe will be sufficient to support our operations for the next few months. While we will require approximately $6,000,000 to implement our full business strategy, we believe that if we are able to raise no less than $1,500,000, it will be sufficient to support our operations for the next 12 months. If we are unable to raise the entire $6,000,000, we will be forced to reduce our marketing and promotion efforts unless current sales increase enough to support implementing our full business plan. Due to the fact that we use co-packers to manufacture our products, have no bricks and mortar, rent very modest space and only have 10 full time employees, our fixed costs are minimal and will remain unchanged regardless of how much money we are able to raise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As required under Exchange Act Rule 13a-15, the Company’s management, including the Principal Executive Officer and Principal Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control

The Company has implemented certain procedures over financial reporting (as defined in Rules 12a-15(f) and 15d-15(f) of the Exchange Act) during the six months ended February 28, 2013. These include new segregation of duties and daily reporting of certain financial information. This will ensure that all information that is required to be disclosed is done so in a timely manner.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On September 21, 2009, Penny Fern Hart, a former Chairman of the Board of Soup Kitchen International, Inc. (“SKI”), as successor to the Commerce Bank loan to SKI, commenced an action in N.Y. State Supreme Court, Case Index # 602538/09, against John Bello, Maj-Britt Rosenbaum and William McCreery (the “Defendants”) to enforce certain guarantees given by the Defendants to Commerce Bank regarding SKI’s defaulted loan. On October 26, 2010, a third party action was filed in this case by the Defendants against OSM, certain principals of OSM and other third parties. The action seeks, among other things, to invalidate OSM’s purchase of assets from SKI. On May 2, 2011, a proceeding was brought against the Company, certain principals of the Company and other third parties by the bankruptcy trustee for SKI seeking to avoid and/or recover the value of assets of SKI, re-alleging various claims made in the October 26, 2010 action. On October 22, 2011, the presiding judge in the bankruptcy action stayed the remaining third-party claims, in the Penny Fern Hart matter, and ordered all the parties to confer and submit a discovery schedule for the bankruptcy action. The Company has been vigorously defending against these actions believing them to be wholly without merit, especially in the light of the fact that an independent appraisal was performed prior to the asset transfer to OSM which completely supported the fairness of the asset transfer to OSM in which OSM paid $100,000 in cash, guaranteed secured debt in the amount of $3,670,000, and has since paid $ 352,907 in respect of SKI payables (including $ 256,205 owed to Al Yeganeh). In addition, there was SKI shareholder approval obtained in connection with the transaction. No assurance, however, can be given as to the ultimate outcome of these actions or their effect on the Company. If the Company is not successful in its defense of these actions it could potentially have a material adverse effect on its business and operations.

Soupman, Inc. is one of several defendants in a lawsuit filed by Gourmet Sales and Marketing, LLC (“GSM”) in July 2011. GSM claims that it is owed sales commissions based upon an August 2009 sales and marketing agreement. Aside from the claim for an accounting, compensatory damages and/or punitive damages are demanded with respect to the other claims. The Company served its answer to the complaint in October 2011, in which it denied the allegations of the complaint with respect to the claims of liability and asserted numerous defenses and affirmative defenses. The matter is now in the discovery phase of litigation. In Company counsel’s opinion, the complaint lacks merit as the agreement that forms the basis of GSM’s claims may be invalid and unenforceable, GSM is not owed any money, and punitive damages are without basis.No assurance can be given as to the ultimate outcome of these action or its effect on the Company. If the Company is not successful in its defense of this action it could could have a material adverse effect on its business, as well as current and expected future operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended February 28, 2013, the Company issued 32,360 shares of common stock in connection with the conversion of 32,360 shares of preferred stock. The securities were issued pursuant to Section 3(a) (9) of the Securities Act.

During the three months ended February 28, 2013 we issued 497,500 shares of common stock for services rendered, having an aggregate fair market value of $241,175 based upon the quoted closing trading prices on the issue dates. We also issued 38,000 shares of common stock for the nonpayment of notes payable having an aggregate fair value of $17,313 based on the quoted trading prices on the issue date. These securities were issued pursuant to Section 4(a)(2) of the Securities Act. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The holders were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Subsequent to February 28, 2013, we issued 233,750 shares of common stock for services rendered, having an aggregate fair market value of $113,465 based on the quoted closing prices on the issue dates. We also issued 12% convertible notes in the principal amount of $687,500 together with five year warrants exercisable for 171,875 shares of common stock at a per share price of $0.75 for aggregate proceeds of $687,500. These securities were issued pursuant to Section 4(a)(2) of the Securities Act. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The holders were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising.

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Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosure

Not Applicable

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit
Number		Description

31.1*		Certification of the Principal Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Principal Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act

32.2*		Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act

101.INS**		XBRL Instance

101.XSD**		XBRL Schema

101.PRE**		XBRL Presentation

101.CAL**		XBRL Calculation

101.DEF**		XBRL Definition

101.LAB**		XBRL Label

* Filed herewith

** Filed herewith electronically

-18-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SOUPMAN, INC.

Date: April 22, 2013	By:	/s/ Arnold Casale
		Arnold Casale
		Chief Executive Officer and Director (Principal Executive Officer)

	SOUPMAN, INC.

Date: April 22, 2013	By:	/s/ Robert Bertrand
		Robert Bertrand
		President & CFO (Principal Financial Officer)

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SOUPMAN, INC. - FORM 10-Q - April 22, 2013

Attached files

SOUPMAN, INC. Reports