Annual report pursuant to Section 13 and 15(d)

Restated Financial Statements For The Year Ended December 31 2012

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Restated Financial Statements For The Year Ended December 31 2012
12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
Restated Financial Statements For The Year Ended December 31 2012

NOTE 10 – RESTATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012

The consolidated financial statements for the year ended December 31, 2012 have been amended for failure to record the acquisition of marketable securities and the related notes payable, interest, and the resulting unrealized gains and losses. An analysis of the restated December 31, 2012 balance sheet and results of operations for the year then ended is as follows.

1 – In 2012 the Company acquired 3,500,000 shares of Plandai, Inc. valued at the FMV of $1,575,000 and 3,500,000 shares of Inscor, Inc. valued at the FMV of $3,675,000 from Berkshire Capital Management. The shares were exchanged for two demand notes, carrying an interest rate of 6%.

2 – The change is due to the mark to market of the new available for sale securities.

3 – The change is due to reversal of deferred tax allowance.

 

 

 

    December 31, 2012
Current Assets:   As Reported   Adjustment   As Restated
   Cash and cash equivalents   $ 382,946     $ —       $ 382,946  
   Accounts receivable     882       —         882  
   Inventory     13,400       —         13,400  
   Prepaid expense     17,725       —         17,725  
   Security deposit     15,000       —         15,000  
   Trading securities     200,556       —         200,556  
   Available-for-sale securities     292,320        1,632,840 2        1,925,160  
   Deferred income taxes - current     —          601,000 3        601,000  
       Total Current Assets     922,829       2,233,840       3,156,669  
                         
   Property and equipment, net     297,464       —         297,464  
   Deferred income taxes – non-current            618,000 3        618,000  
                         
       TOTAL ASSETS   $ 1,220,293     $ 2,851,840     $ 4,072,133  
                         
LIABILITIES                        
Current Liabilities:                        
   Accounts payable and accrued liabilities   $ 43,453     $ —       $ 43,453  
   Related party notes payable     2,521,026       —         2,521,026  
       Total Current Liabilities     2,564,479       —         2,564,479  
  Noncurrent related party notes payable     —          5,545.0211        5,545,021  
          Total Liabilities     2,564,479       5,545,021       8,109,500  
                         
STOCKHOLDERS’ EQUITY (DEFICIT)                        
   Preferred stock     2       —         2  
    Common Stock     13,663       —         13,663  
   Additional paid-in capital     13,747,780       —         13,747,780  
   Unrealized gain (loss) on available-for-sale securities     93,820        (3,617,160) 2        (3,523,340 )
   Retained deficit     (15,199,451 )     923,979       (14,275,472 )
                         
       Total Stockholders’ Equity (Deficit)     (1,344,186 )     (2,693,181 )     (4,037,367 )
                         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)   $ 1,220,293     $ 2,851,840       4,072,133  

 

 

 

    December 31,  2012
    As Reported   Adjustment   As Restated
Revenues   $ 1,118,330     $ —       $ 1,118,330  
Cost of revenues     375,775       —         375,775  
Gross Margin     742,555       —         742,555  
                         
Operating Expenses:                        
   Labor and related expenses     357,149       —         357,149  
   Rent     234,396       —         234,396  
   Depreciation     50,423       —         50,423  
   Other general and administrative     415,414       —         415,414  
      Total Operating Expenses     1,057,382       —         1,057,382  
Net Operating Income (Loss)     (314,827 )     —         (314,827 )
                         
Other Income (Expense):                        
   Interest income     1,410       —         1,410  
   Interest expense     (135,278 )      (295,021) 1        (430,299 )
   Unrealized gain (loss) on trading securities     97,977       —         97,977  
   Gain (loss) on sale of marketable securities     (80,456 )     —         (80,456 )
Net Other Income (Expense)     (116,347 )     (295,021 )     (411,368 )
                         
Net loss before income taxes     (431,174 )     —         (726,195 )
Deferred Income tax (expense) benefit     —          1,219,000 3        1,219,000  
                         
Net Income (loss) before extraordinary items   $ (431,174 )   $ 923,979   $ 492,805  
                         
   Gain on extinguishment of debt (net of income tax of $0)     2,354,988       —         2,354,988  
                         
Net Income   $ 1,923,814     $ 923,979     $ 2,847,793  
                         
Other Comprehensive Income (Loss):                        
  Unrealized gain (loss) on available-for-sale securities     (18,840 )      (3,617,160) 2        (3,636,000 )
                         
Comprehensive Income   $ 1,904,974     $ (2,693,181 )   $ (788,207 )
                         
Income Per Common Share:                        
Income (loss) before extraordinary item   $ 0.02     $ (0.01 )   $ 0.01  
   Extraordinary Item   $ 0.02     $ (0.01   $ 0.02  
Income (loss) per Common Share - Basic       0.03     0.03  
Income (loss) per common share - Diluted     —        (0.02 )     0.02  
Weighted Average Common Shares:                        
   Basic     106,906,125       —         106,906,125  
  Diluted     121,612,007       —         121,612,007