Quarterly report pursuant to Section 13 or 15(d)

Restated Financial Statements For The Three Months Ended March 2013

v2.4.0.8
Restated Financial Statements For The Three Months Ended March 2013
6 Months Ended
Jun. 30, 2014
Notes to Financial Statements  
Restated Financial Statements

NOTE 6 - RESTATED FINANCIAL STATEMENTS

 

The consolidated financial statements for the year ended December 31, 2013, have been amended to correct a material departure from GAAP which was due to the Company incorrectly using the valuation date subsequent to period end to value its available-for-sale marketable securities. An analysis of the restated December 31, 2013 balance sheet is as follows.

 

1 - Change is due to a material departure from GAAP due to the Company using the valuation date subsequent to period end to value its marketable securities.

 

    December 31,  2013
    As Reported   Adjustment     As Restated
Current Assets:                          
   Cash and cash equivalents   $ 1,628,529     $ —         $ 1,628,529  
   Accounts receivable     1,093       —           1,093  
   Inventory     16,500       —           16,500  
   Prepaid expense     17,477       —           17,477  
   Prepaid stock purchase     —         43,750 1     43,750  
   Security deposit     15,000       —           15,000  
   Trading securities     1,717,438       —           1,717,438  
   Available-for-sale securities     9,089,608       (6,189,518 ) 1     2,900,090  
   Deferred income taxes - current     758,000                 758,000  
       Total Current Assets     13,243,645       (6,145,768 )       7,097,877  
                           
   Property and equipment, net     227,298       —           227,298  
   Deferred income taxes – non-current     282,000                 282,000  
                           
       TOTAL ASSETS   $ 13,752,943     $ (6,145,768 )     $ 7,607,175  
                           
LIABILITIES                          
Current Liabilities:                          
   Accounts payable and accrued liabilities   $ 39,374     $ —         $ 39,374  
   Related party notes payable     1,882,648       —           1,882,648  
       Total Current Liabilities     1,922,022       —           1,922,022  
  Noncurrent related party notes payable     8,562,355       —           8,562,355  
          Total Liabilities     10,484,377       —           10,484,377  
                           
STOCKHOLDERS’ EQUITY (DEFICIT)                          
   Preferred stock     2       —           2  
    Common Stock     13,663       —           13,663  
   Additional paid-in capital     14,049,717       —           14,049,717  
   Unrealized gain (loss) on available-for-sale securities     4,860,759       (6,145,768 ) 1     (1,285,009 )
   Retained deficit     (15,655,575 )     —           (15,655,575 )
                           
       Total Stockholders’ Equity (Deficit)     3,268,566       (6,145,768 )       (2,877,202 )
                           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)   $ 13,752,943     $ (6,145,768 )       7,607,175  

   

The consolidated financial statements for the six months ended June 30, 2013 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 June 30, 2013 Statement of Operationsis 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.

 

    For the Three Months Ended June 30,  2013   For the Six Months Ended June 30,  2013
    As Reported   Adjustment   As Restated   As Reported   Adjustment   As Restated
Revenues   $ 326,740     $ —       $ 326,740     $ 604,068     $ —       $ 604,068  
Cost of revenues     97,068       —         97,068       181,622       —         181,622  
Gross Margin     229,672       —         229,672       422,446       —         422,446  
                                                 
Operating Expenses:                                                
   Labor and related expenses     83,067       —         83,067       163,653       —         163,653  
   Rent     52,127       —         52,127       108,315       —         108,315  
   Depreciation     12,471       —         12,471       25,246       —         25,246  
   Other general and administrative     87,988       —         87,988       183,030       —         183,030  
      Total Operating Expenses     235,653       —         235,653       480,244       —         480,244  
Net Operating Loss     (5,981 )     —         (5,981 )     (57,798 )     —         (57,798 )
                                                 
Other Income (Expense):                                                
   Interest income     225       —         225       368       —         368  
   Interest expense     (32,242 )     (96,711 ) 1   (128,953 )     (65,595 )     (175,461 ) 1   (241,056 )
   Unrealized gain (loss) on trading securities     1,703,399       (2,148,768 )     (445,369 )     2,006,760       (2,147,308 )     (140,548 )
   Gain (loss) on sale of marketable securities     1,606,576       (1,215,612 )     390,964       1,738,071       (1,241,773 )     496,298  
Net Other Income (Expense)     3,277,958       (3,461,091 )     (183,133 )     3,679,604       (3,564,542 )     115,062  
                                                 
Net Income (Loss)   $ 3,271,977     $ (3,461,091 )   $ (189,114 )   $ 3,621,806     $ (3,564,542 )   $ 57,264  
                                                 
Other Comprehensive Income (Loss):                                                
  Unrealized gain (loss) on available-for-sale securities     (109,890 )     3,061,950   2   2,952,060       9,480       2,520,060   2   2,529,540  
                                                 
Comprehensive Income   $ 3,162,087     $ (399,141 )   $ 2,762,946     $ 3,631,286     $ (1,044,482 )   $ 2,586,804  
                                                 
Income Per Common Share:   $ 0.02     $ —       $ (0.00 )   $ 0.03     $ —       $ 0.00  
Income Per Common Share, Diluted:   $ 0.02     $ —       $ (0.00 )   $ 0.03     $ —       $ 0.00  
Weighted Average Common Shares:                                                
   Basic     136,627,710       —         136,627,710       136,627,710       —         136,627,710  
  Diluted     139,259,289       —         139,259,289       139,259,289       —         139,259,289