Attached files
| file | filename |
|---|---|
| EX-32.1 - Panacea Global, Inc. | v167415_ex32-1.htm |
| EX-31.1 - Panacea Global, Inc. | v167415_ex31-1.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.
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FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
OR
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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Commission
File #
MONEYLOGIX GROUP,
INC.
(Exact
name of registrant as specified in its charter)
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NEVADA
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33-0680443
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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260 Edgeley Blvd, Suite 12, Concord,
Ontario L4K 3Y4
(Address
of principal executive offices and zip code)
Registrant’s telephone number,
including area code: (905) 761-1400
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 periods 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 ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted 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 and post such files).
Yes ¨ No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company
filer. See definition of “accelerated filer” and “large accelerated
filer” in rule 12b-2 of the Exchange Act (Check one):
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.
Yes
x
No ¨
Indicate
the number of shares outstanding of the Registrant’s common stock as of the
latest practicable date.
|
Class
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Outstanding at November 20,
2009
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|
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Common
Stock, $.001 par value
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85,763,586
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TABLE
OF CONTENTS
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Item
1.
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Financial
Statements
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3
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition
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4
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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9
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Item
4T.
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Control
and Procedures
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9
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PART
II— OTHER INFORMATION
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||
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Item
1
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Legal
Proceedings
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11
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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11
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Item
3.
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Defaults
Upon Senior Securities
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11
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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11
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Item
5.
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Other
Information
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11
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Item
6.
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Exhibits
and Reports on Form 8-K
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11
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SIGNATURE
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12
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2
PART
I: FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
Basis
of Presentation
The
accompanying statements are presented in accordance with U.S. generally accepted
accounting principles for interim financial information and the instructions to
Form 10-Q and Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by U.S. generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal occurring adjustments)
considered necessary in order to make the financial statements not misleading,
have been included. Operating results for the three months and the nine months
ended September 30, 2009 are not necessarily indicative of results that may be
expected for the year ending December 31, 2009.
The
financial statements of the Company appear at the end of this report beginning
with the Index to Financial Statements on page F-1 and ending on
F-15.
3
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS
The
following is management’s discussion and analysis of the financial condition and
results of operations of MoneyLogix Group, Inc. for the three months and nine
months ending September 30, 2009 and 2008. The following
information should be read in conjunction with the reviewed financial statements
for the period ending September 30, 2009 and notes thereto appearing elsewhere
in this form 10-Q.
Overview
MoneyLogix
Group, Inc. (“Company”, “We”, “Our”, or “MoneyLogix Group”), formerly Homelife,
Inc., a corporation incorporated under the laws of Nevada, entered into a share
exchange agreement on January 3, 2008 with MoneyLogix Inc., a Delaware private
corporation. The reverse merger transaction effected a change of control of the
Company.
There are
no material differences in accounting treatment or federal income tax
consequences from the share exchange agreement. Similarly, we were not required
to obtain any federal or state regulatory approvals to complete the share
exchange agreement. Accordingly, we did not obtain any reports, opinions, or
appraisals relating to the fairness of the transaction because we deemed it an
unnecessary and costly expense given the nature of the
transaction.
MoneyLogix
Group is a development stage capital investment company focused on opportunistic
acquisitions in the real estate market. MoneyLogix Group focus
is creating value through timely acquisitions, investing in high-yielding value
enhancement tactics, and executing the best exit strategies for each unique
investment property in Canada, USA and other international
countries.
4
It is our
intent to use our capital for the acquisition of undervalued residential and
commercial real estate and zoned property and, with limited redevelopment, sell
the acquired property at a substantial profit in the future when real estate
values return to historical norms or better.
Where
ever possible, we will lease acquired premises to obtain rental income until
such time as property values and market demands allow a divestiture of
properties from our real estate portfolio that achieves a satisfactory return on
investment to shareholders.
To
execute the business strategy, we added the following individuals to its
management team effective May 11, 2009: Mike Knarr, President & Chief
Executive Officer; Gary Cilevitz, Chief Financial Officer and Corporate
Secretary; Tom Copeland, Executive Vice President; Adam Seanor, Executive Vice
President. Concurrently, the Corporation elected Alex Haditaghi
to the position of Chairman of the Board effective August 11,
2009. The Board of Directors consist of Alex Haditaghi, Mike Knarr
and Gary Cilevitz as at May 11, 2009 and are currently searching for independent
directors. Majid Haditaghi resigned effectively May 12, 2009 as
an officer and director. Effective September 4, 2009 Tom Copeland and Adam
Seanor were no longer employed by the Company. Effective November 15,
2009, Mike Knarr resigned as President & Chief Executive Officer and as a
Director of the Company. Gary Cilevitz will fulfil the duties
of President & Chief Executive Officer.
Acquisition
of 2131059 ONTARIO LIMITED
On May
22, 2009, MoneyLogix completed the acquisition of 2131059 ONTARIO LIMITED
(“Mapleview”, or “Acquisition”), in accordance with the share purchase agreement
between the parties. Pursuant to the terms of the agreement,
MoneyLogix agreed to issue 8,775,000 restricted common shares to 2206659 Ontario
Ltd valued at $1.75 (CDN$2.00) per share for a total of $
15,389,000 (CDN $17,550,000) and assumed additional debt in the amount of
approximately $ 7,857,500 (CDN $9,0000,000). MoneyLogix has assigned
all the common shares of Mapleview to MoneyLogix Group, Inc (“MLXG CANADA”), a
100% owned subsidiary of MoneyLogix. As a result of
this assignment, Mapleview becomes a 100% wholly owned subsidiary of MLXG
CANADA. Since MLXG CANADA is a wholly owned subsidiary of Moneylogix,
MoneyLogix becomes the indirect owner of Mapleview.
About
2131059 Ontario Ltd.
Established
in March 2007, Mapleview is the registered owner of the property municipally
known as North Side Mapleview Drive East, Barrie, Ontario comprising
approximately 50 acres of land, being PIN 580910288, S.Pt.Lot 16, Conc, Being
Part 1, Reference 51R-22937, City of Barrie, County of Simcoe, and comprising
approximately 49.48 acres PIN 580911689, S ½ Lot 16, Conc. 12, Being Part 1
Reference Plan 51R-22928, City of Barrie, County of Simcoe;
MoneyLogix
purchased the property after extensive review and investigation of the future
development potential. The local municipality, Barrie, has adopted
the planning department’s recommendations regarding the density (number of units
per hectare) and intensification (increasing density) throughout the City, which
will become part of the municipality’s Official Plan expected to be adopted on
June 16, 2009. This property is included in that densification,
potentially raising the approved number of dwelling units from 250 currently
approved to approximately 2,600 units.
This
property is located at the corner of Mapleview Drive and Yonge Street adjacent
to the GO Train Station in Barrie which provides daily commuter transit service
directly to downtown Toronto, and immediately adjacent to a residential
development that is expected to be fully completed and occupied in
2010. The property is the last remaining section in the vicinity both
designated for residential development and intensification.
The
Vendor of the lands worked closely with City Planning staff and councilors, and
has provided a concept plan for the site including approximately 1,500 dwelling
units, and while the concept plan has yet to be approved for zoning and draft
subdivision, it is believed that because of the excellent location of the
property site plan approval may be achieved in 12-18 months.
With the
potential for increased densification and the proximity to the GO Train,
MoneyLogix’s management believes the Mapleview property demonstrates the
Company’s strategy of opportunistically investing in properties with the
potential for significant capital appreciation.
The
purchase price for 2131059 was approximately $23,000,000 (Canadian $26,300,000)
which was funded by assumption of Mortgages Payable of $7,568,000(Canadian
$8,630,000), Accounts Payable of $175,000(Canadian $200,000) and the issuance of
8,775,000 restricted common shares of MoneyLogix at $1.75(Canadian $2.00) per
share.
5
Under the
purchase method of accounting, the initial purchase price is allocated to
2131059 s net tangible and assets based upon their estimated fair values as of
the date of the acquisition. The preliminary purchase price allocation as of May
20, 2009 is as follows:
|
At May 20, 2009
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||||
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||||
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Property
under Development
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$ | 23,113,000 | ||
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Cash
and Other Assets
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3,500 | |||
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Due
from Baywood Homes Partnership
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130,000 | |||
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Total
assets acquired
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23,246,500 | |||
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Mortgages
Payable
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7,568,000 | |||
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Accounts
Payable
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289,500 | |||
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Total
Liabilities acquired
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7,857,500 | |||
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Net
assets acquired
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15,389,000 | |||
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Stock
Issued to sellers [8,775,000@$1.7538 US]
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15,389,000 | |||
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Net
shares issued
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$ | 15,389,000 | ||
The above
table comprises our supplemental disclosure of non-cash investing and financing
activities.
The Company acquired Three Mortgages as
of May 20, 2009 and consist of the
following:
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|
May 20, 2009
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|||
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Mortgage
notes payable (a)
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$ | 5,813,847 | ||
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Mortgage
notes payable (b)
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1,052,280 | |||
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Mortgage
notes payable (c)
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701,520 | |||
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Totals
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$ | 7,567,647 | ||
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(a)
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Mortgage
note payable to Firm Capital payable in monthly installments, bearing
interest at a floating rate at the greater of 10.75% per annum or the
Toronto Dominion Interest rate plus 4.00%. The term is 1 year
expiring October 1, 2009 with $17,140 ($20,000CDN) principal payments
per month being calculated on a declining balance method. This
mortgage note is secured by a first mortgage interest in a real
estate property in Ontario, Canada.
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|
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(b)
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Mortgage
note payable to Sora Development Corp payable in monthly installments of
interest only, at a rate at of 10% per annum. The mortgage is
currently month to month and has been guaranteed by an unrelated third
party. This mortgage note is secured by a second mortgage interest in
a real estate property in Ontario,
Canada.
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|
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(c)
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Mortgage
note payable to C-1 Holdings Inc. payable in monthly installments of
interest only, at a rate at of 10% per annum. The mortgage is
currently month to month and has been guaranteed by an unrelated third
party. This mortgage note is secured by a third mortgage interest in a
real estate property in Ontario,
Canada.
|
6
New
Fourth Mortgage
As
disclosed in the 8-K filed on July 22, 2008 per
the addendum to the agreement of the share exchange agreement
dated January 3, 2008, MoneyLogix had an obligation to issue an
additional 20,000,000 shares to a
shareholder. In a related party transaction which occurred on July 9,
2009, in consideration of cancelling the obligation to issue 19,800,000 shares,
MoneyLogix agreed to issue only 5,000,000 of those shares and allow a
4th mortgage to be registered on its Mapleview property in the amount
of $819,000 (CDN $950,000). The consideration received was reviewed
by management, the board of directors and with independent legal counsel and was
deemed reasonable. By entering into this transaction, the Company avoided
further shareholder dilution of 15 million shares and in exchange for an amount
equivalent to $0.0545 per share, whereas the fair market share price on July 9,
2009 was $2.00. The book value per share price at June 30, 2009 was
$0.16.
The
fourth mortgage was issued to Trisan Equitable Corporation (“Trisan”) in the
amount of $819,000 (CDN $950,000) with a maturity date of October 30, 2009 with
0% interest. If the mortgage is not paid by the maturity date, default
interest on the mortgage will be charged from October 31, 2009 at an interest
rate of 24% per annum, calculated semi-annually. As security for payment
of the debt pursuant to the mortgage, a transfer/deed of land in registerable
form for the property (“Quitclaim’) will be held and utilized on behalf of and
for the benefit of Trisan. Trisan will be permitted and authorized to register
the Quitclaim on title upon occurrence of a trigger date. A trigger date
shall be deemed to occur on the earlier of the following: November 30,
2009 if the debt plus accrued interest has not been paid or if an event of
default has not been cured prior to the expiration of the 30 day period, on the
30th day following written notice being sent by Trisan or its
solicitors.
Disposition
of 2131059 ONTARIO LIMITED
On August
24, 2009, MoneyLogix Group, Inc. (“MoneyLogix”, the “Company” or “We”) completed
the disposition of 2131059 ONTARIO LIMITED (“Mapleview”
or “2131059”), in accordance with the share purchase agreement
between MoneyLogix and Ralph Canonaco, in trust. Mapleview is the registered
owner of the property municipally known as North Side Mapleview Drive East,
Barrie, Ontario comprising approximately 50 acres of land, being PIN 580910288,
S.Pt.Lot 16, Conc, Being Part 1, Reference 51R-22937, City of Barrie, County of
Simcoe, and comprising approximately 49.48 acres PIN 580911689, S ½ Lot 16,
Conc. 12, Being Part 1 Reference Plan 51R-22928, City of Barrie, County of
Simcoe.
The
purchaser was part of the original group that MoneyLogix had acquired this
property from. Pursuant to the terms of the agreement, the
purchaser agreed to the purchase price of Fifteen Million,
Two Hundred and Fifteen Thousand, Seven Hundred and Ninety Four
dollars $15,215,794 (CDN $16,387,500).
The
consideration received was satisfied as follows: the purchaser
assumed all existing mortgages at closing of $ 8,792,895 (CDN $9,470,000),
provided mortgages to MoneyLogix of $2,349,100 (CDN $ 2,530,000) and the return
of 8,775,000 restricted common shares of MoneyLogix which were issued in
connection with the original purchase of Mapleview.
The
8,775,000 restricted common shares of MoneyLogix were valued at $0.46(CDN $0.50)
for a total of $4,036,500 (CDN $4,387,500).
The
mortgages received are valued at $2,349,100 (CDN $2,530,000) and are due
December 31, 2009, consisting of a collateral mortgage in fifth
position on Mapleview property and a collateral mortgage in second position on a
property in Downtown Toronto. The mortgages have an interest rate of
0% to October 28, 2009, and from October 29, 2009 thereafter at the rate of 1.5%
per month. The mortgages have a personal guarantee from the
purchaser.
In
addition to the consideration noted above, MoneyLogix will receive the
following:
Six
Serviced Family Residential Lots, subject to a reasonable cost for severance and
a cost sharing agreement. Management estimates the value of these
serviced lots have a net total value of $373,560 (CDN $400,000);
100
residential units, subject to a cost sharing agreement. Management
estimates the value of these residential lots have a net total value of $700,426
($750,000)
An option
to acquire 150 residential units, subject to a cost sharing agreement, for
$14,009 (CDN $15,000) each. Management has not estimated a value at
the present time; and,
The
purchaser assumed accounts payable of up to $280,170 (CDN
$300,000).
7
After
reviewing several exit strategies for the Mapleview lands including refinancing,
joint ventures and other outright sales, MoneyLogix management and the Board of
Directors determined that the executed transaction provided the best use of the
company asset. Anticipated proceeds from the mortgages will provide
working capital to support MoneyLogix’s operations and business plan for
approximately 18 months.
After the
completed transaction, MoneyLogix estimation in regards to the Mapleview
transaction was left with the following consideration:
|
Mortgages
Receivable
|
$ | 1,867,800 | ||
|
Serviced
Single Family Residential Lots (net)
|
373,560 | |||
|
Residential
Units- Gross (subject to cost sharing agreement)
|
700,426 | |||
| $ | 2,941,786 |
* Option
to Buy 150 Units @$14,009 (subject to cost sharing
agreement)
On
November 17, 2009, the Company sold the Mortgage Receivable, Residential Units
and the option to acquire 150 residential units for cash consideration of
$1,903,800 (CDN $2,000,000), two promissory note of $ 230,588 (CDN $245,240) and
$ 713,9255 (CDN $750,000). Six Serviced Family Residential Lots with a net total
value of $ 373,560 (CDN $400,000) were retained. The sale of the Mortgage
Receivable was to an unrelated party and the two promissory notes were to Ralph
Canonaco of Baywood Homes Partnership. The terms of the $230,588 promissory note
are interest bearing at 1% per month due December 31, 2009 and secured by a
6`i'
Mortgage on the Mapleview Property. The terms of the $ 713,925 promissory note
is non interest bearing till August 2010 and then 12% per annum and due December
31, 2010.
Other
During
the past two years, other than the share exchange agreement described
here-to-fore, there has not been any negotiations, transactions or material
contracts between the Company and MoneyLogix Inc. regarding a merger,
consolidation, acquisition, tender offer, election of directors or sale/transfer
of material assets of either company.
The Company’s corporate offices are at
260 Edgeley Blvd, Suite 12, Concord, Ontario L4K 3Y4. Our current contact
information for our office is telephone number: (905)
761-1400.
Results
of Operations
The
Company reported no revenue from operations during the three month and nine
month period ending September 30, 2009. Comparatively, the Company
reported no revenue from operations during the three month and nine month period
ending September 30, 2008.
The
Company incurred expenses of 188,936 for the three month period ending September
30, 2009 and $754,266for the nine month period ending
September 30, 2009. The primary expense was for
stock compensation expense and consulting and payroll fees for management to
commence operations in the necessary period. The other expenses
consist primarily of professional fees and office and general in regards to
setting up the company and doing the necessary
filings. Comparatively, for the three month period and nine
month period ending September 30, 2008, the Company incurred professional fees
expenditures of $15,936 and reorganization costs of 250,564. The Company
reported total operating expenses of $1,113,178 period from December 7, 2007
(the inception date) to September 30, 2009.
The
Company recorded a net loss for the three month period and nine month period
ending September 30, 2009 of $188,936 and $754,266 with a comparative net loss
for 2008 of $7,686 and 266,500 for both periods. For the period
from December 7, 2007 (inception date) to September 30, 2009, the Company
recorded a cumulative Net Loss of $1,113,178.
Liquidity
and Capital Resources
At
September 30, 2009, we had $104 of bank indebtness and total assets of
$2,941,786. Comparatively at December 31, 2008, we had zero cash and zero total
assets.
At
September 30, 2009, we had liabilities of
$1,070,921. Comparatively at December 31, 2008, the Company had
$17,812 in accrued liabilities for a total of $17,812 in
liabilities.
As there
are no current revenues from operating activities, the Company must presently
rely upon the issuance of common stock and additional capital contributions from
shareholders and/or loans from shareholders and third-party lenders to meet our
working capital needs. It is expected by management that the Company will need
to rely upon new capital contributions to pay the accrued
liabilities.
8
On August
24, 2009 MoneyLogix received a Mortgage Receivable on the disposition of 2131059
ONTARIO LIMITED. The mortgages received are valued at $1,867,800 (CDN
$2,000,000) and is due December 31, 2009, consisting of
a collateral mortgage in fifth position on Mapleview property and a
collateral mortgage in second position on a property in Downtown
Toronto. The mortgages have an interest rate of 0% to October
28, 2009, and from October 29, 2009 thereafter at the rate of 1.5% per
month. The mortgages have a personal guarantee from the
purchaser. Anticipated proceeds from the mortgages will provide working
capital to support MoneyLogix’s operations and business plan for approximately
18 months.
On
November 17, 2009, the Company sold the Mortgage Receivable, Residential Units
and the option to acquire 150 residential units for cash consideration of
$1,903,800 (CDN $2,000,000), two promissory note of $ 230,588 (CDN $245,240) and
$ 713,9255 (CDN $750,000). Six Serviced Family Residential Lots with a net total
value of $ 373,560 (CDN $400,000) were retained. The sale of the Mortgage
Receivable was to an unrelated party and the two promissory notes were to Ralph
Canonaco of Baywood Homes Partnership. The terms of the $230,588 promissory note
are interest bearing at 1% per month due December 31, 2009 and secured by a
6`i'
Mortgage on the Mapleview Property. The terms of the $ 713,925 promissory note
is non interest bearing till August 2010 and then 12% per annum and due December
31, 2010.
Critical
Accounting Policies
Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, and revenue and expense amounts reported. These estimates
can also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial
condition. We believe our use of estimates and underlying accounting
assumptions adhere to GAAP and are consistently and conservatively
applied. We base our estimates on historical experience and on
various other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ materially from these estimates under
different assumptions or conditions. We continue to monitor
significant estimates made during the preparation of our financial
statements.
Going
Concern
The
Company’s financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. For the three month period ending
September 30, 2009, the Company incurred a Net Loss of $188,936
and for the nine month period ending September 30, 2009 the Company incurred a
Net Loss of $754,266. Accumulated Losses from inception to December 31,
2009 total $1,117,626. Certain conditions noted below raise
substantial doubt about the Company’s ability to continue as a going
concern. .
The
Company’s ability to continue as a going concern is contingent upon its ability
to secure additional debt or equity financing, initiate sales of its services
and achieve profitable operations. Management’s plan is to secure
additional funds through future debt or equity financings. Such
financing may not be available or may not be available on reasonable terms to
the Company. The issuance of additional equity securities by us could
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash
commitments.
The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
Off-Balance
Sheet Arrangements
None.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The
Company is subject to certain market risks, including changes in interest rates
and currency exchange rates. The Company does not undertake any specific
actions to limit those exposures.
ITEM
4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of Disclosure
Controls and Procedures
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of September 30, 2009. This
evaluation was accomplished under the supervision and with the participation of
our chief executive officer / principal executive officer, and chief financial
officer / principal financial officer who concluded that our disclosure controls
and procedures are not effective to ensure that all material information
required to be filed in the quarterly Form 10-Q has been made known to
them.
9
For
purposes of this section, the term disclosure controls and procedures means
controls and other procedures of an issuer that are designed to ensure that
information required to be disclosed by the issuer in the reports that it files
or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms. Disclosure, controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by in our reports filed under the Securities Exchange Act of
1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
Based
upon an evaluation conducted for the period ended September 30, 2009, our Chief
Executive and Chief Financial Officer as of September 30, 2009 and as of the
date of this Report, has concluded that as of the end of the periods covered by
this report, we have identified the following material weakness of our internal
controls:
|
|
·
|
Reliance
upon independent financial reporting consultants for review of critical
accounting areas and disclosures and material non-standard
transaction.
|
|
|
·
|
Lack
of sufficient accounting staff which results in a lack of segregation of
duties necessary for a good system of internal
control.
|
In order
to remedy our existing internal control deficiencies, as our finances allow, we
will hire additional accounting staff.
Changes in Internal Controls
over Financial Reporting
We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-Q that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
10
PART
II: OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
Two
former employees (“Plaintiffs”) have commenced an action on October 2009 in
Ontario, Canada against the Company. The statement of claim is for an
aggregate payment of approximately $466,950 ($500,000 CDN) related to wrongful
dismissal. The Company plans to vigorously defend itself in this
claim and has will launch a counter suit against the plaintiffs in the amount of
$1,903,000($2,000,000 CDN). Included in Accounts Payable and
Stock Compensation Liability is approximately $260,000 relating to salaries,
expenses and stock compensation. At the present time, the Company and
its legal counsel agree that the outcome of this proceeding cannot be reasonably
determined at this time.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None
ITEM 3 . DEFAULTS UPON SENIOR
SECURITIES
Not
Applicable.
ITEM
4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM
5: OTHER INFORMATION
None.
ITEM
6: EXHIBITS AND REPORTS ON FORM 8-K
|
(a)
|
Exhibits
|
31.1 Certification
of the CEO and CFO Pursuant to Rule 13a-14(a) under the Securities Exchange Act
of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32.1 Certification
of the CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
(b)
|
Reports of Form
8-K
|
On August
8, 2009, the Company filed a Form 8K/a disclosing the acquisition for 2131959
Ontario Limited which held a 100 acre development project in Barrie, Ontario,
Canada.
On August
28, 2009, the Company filed a Form 8K disclosing the disposition for 2131959
Ontario Limited which held a 100 acre development in Barrie, Ontario,
Canada.
11
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
|
MONEYLOGIX
GROUP, INC.
|
||
|
By:
|
/s/ Gary Cilevitz
|
|
|
Gary
Cilevitz
|
||
|
President, Chief
Executive Officer and Chief Financial
Officer
|
||
Dated:
November 20, 2009
12
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
F1
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
SEPTEMBER 30,
2009
CONTENTS
|
Page
|
||
|
FINANCIAL
STATEMENTS
|
||
|
Condensed
Consolidated Balance Sheets
|
F3
|
|
|
Condensed
Consolidated Statements of Operations
|
F4
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
F5
|
|
|
Condensed
Consolidated Statement of Stockholders’ Deficit
|
F6
|
|
|
Notes
to the Condensed Consolidated Financial Statements
|
F7
- F15
|
F2
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
September 30,
2009
|
December 31,
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Property
undergoing development(Note 5)
|
$
|
1,073,986
|
$
|
-
|
||||
|
Mortgage
Receivable(Note 5)
|
1,867,800
|
-
|
||||||
|
Total
Assets
|
$
|
2,941,786
|
$
|
-
|
||||
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
Payable and accrued liabilities
|
$
|
322,412
|
$
|
17,812
|
||||
|
Bank
Indebtness
|
104
|
|||||||
|
Stock
Compensation Liability(Note 7)
|
408,000
|
-
|
||||||
|
Advances
from related party(Note 6)
|
340,405
|
-
|
||||||
|
Total
Liabilities
|
1,070,921
|
17,812
|
||||||
|
Stockholders'
Deficit
|
||||||||
|
Preferred
Stock, $10 par value; 100,000 shares authorized, none issued (Note
9)
|
-
|
-
|
||||||
|
Capital
stock, $.001 par value; 100,000,000 shares authorized; 85,763,586 issued
and outstanding (Note 9)
|
85,764
|
80,764
|
||||||
|
Additional
Paid in Capital
|
2,902,727
|
275,056
|
||||||
|
Stock
subscription receivable
|
-
|
(14,720
|
)
|
|||||
|
Other
Comprehensive Loss
|
(4,448
|
)
|
-
|
|||||
|
Deficit
accumulated during the development stage
|
(1,113,178
|
)
|
(358,912
|
)
|
||||
|
Total
Stockholders' Deficit
|
1,870,865
|
(17,812
|
)
|
|||||
|
Total
Liabilities and Stockholders' Deficit
|
$
|
2,941,786
|
$
|
-
|
||||
The
accompanying notes are an integral part of these financial
statements.
F3
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
For the Period
|
||||||||||||||||||||
|
from
December 7,
|
||||||||||||||||||||
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
2007
(inception)
to September
|
||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
30, 2009
|
||||||||||||||||
|
REVENUES
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
EXPENSES
|
||||||||||||||||||||
|
Professional
Fees
|
32,088 | 7,686 | 74,330 | 15,936 | 101,078 | |||||||||||||||
|
Office
and General
|
6,159 | 39,357 | - | 39,357 | ||||||||||||||||
|
Stock
Compensation expense
|
- | - | 408,000 | - | 408,000 | |||||||||||||||
|
Consulting
and Payroll Fees
|
150,689 | - | 232,579 | - | 314,179 | |||||||||||||||
|
Cost
of Reorganization
|
250,564 | 250,564 | ||||||||||||||||||
|
TOTAL
OPERATING EXPENSES
|
188,936 | 7,686 | 754,266 | 266,500 | 1,113,178 | |||||||||||||||
|
NET
LOSS
|
$ | (188,936 | ) | $ | (7,686 | ) | $ | (754,266 | ) | $ | (266,500 | ) | $ | (1,113,178 | ) | |||||
|
Foreign
Currency Translation
|
361,698 | - | (4,448 | ) | - | (4,448 | ) | |||||||||||||
|
COMPREHENSIVE
INCOME (LOSS)
|
172,762 | (7,686 | ) | (758,714 | ) | (1,117,626 | ) | |||||||||||||
|
Net
loss per share - basic and diluted
|
$ | (0.00 | ) | $ | - | $ | (0.01 | ) | $ | - | ||||||||||
|
Weighted
average number of shares outstanding - basic and
diluted
|
81,238,586 | 80,763,586 | 90,234,238 | 80,335,841 | ||||||||||||||||
The
accompanying notes are an integral part of these financial
statements.
F4
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
Nine Months
Ended
September 30,
2009
|
Nine Months
Ended
September 30,
2008
|
For the Period
from Inception
(December 7,
2007)
to
September 30,
2009
|
||||||||||
|
|
||||||||||||
|
Cash
Flows from Operating Activities
|
||||||||||||
|
Net
loss
|
(758,714 | ) | (266,500 | ) | $ | (1,117,626 | ) | |||||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
|
Bank
Overdraft
|
104 | - | 104 | |||||||||
|
Non-Cash
Cost of Reorganization
|
- | 250,564 | 250,564 | |||||||||
|
Expenses
paid by Stockholder
|
- | 1,436 | 81,600 | |||||||||
|
Stock
subscription receivable
|
14,720 | - | 14,720 | |||||||||
|
Stock compensation
liability
|
408,000 | - | 408,000 | |||||||||
|
Accounts
Payable and accrued liabilities
|
304,600 | 14,500 | 312,014 | |||||||||
|
Net
Cash Used in Operating Activities
|
(31,290 | ) | - | (50,624 | ) | |||||||
|
Cash
Flows from Investing Activities
|
||||||||||||
|
Increase
in Property undergoing development
|
(202,259 | ) | - | (181,495 | ) | |||||||
|
Cash
acquired on purchase of Mortgage
|
(116,303 | ) | - | (104,368 | ) | |||||||
|
Net
Cash Provided by Investing Activities
|
(318,562 | ) | - | (285,863 | ) | |||||||
|
Cash
Flows from Financing Activities
|
||||||||||||
|
Advances
from related party
|
345,405 | - | 332,039 | |||||||||
|
Net
Cash Provided by Financing Activities
|
345,405 | - | 332,039 | |||||||||
|
Foreign
Exchange on Balances
|
4,448 | - | 4,448 | |||||||||
|
Cash
and Cash Equivalents - Beginning of Period
|
- | - | - | |||||||||
|
Cash
and Cash Equivalents - End of Period
|
$ | - | $ | - | $ | - | ||||||
|
Supplemental
Cash Flow Information
|
||||||||||||
|
Interest
paid
|
$ | - | $ | - | $ | - | ||||||
|
Income
taxes paid
|
$ | - | $ | - | $ | - | ||||||
The
accompanying notes are an integral part of these financial
statements.
F5
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE PERIOD FROM THE DATE OF INCEPTION
(DECEMBER
7, 2007) TO SEPTEMBER 30, 2009
|
Common Stock
|
Preferred Stock
|
Additional
Paid-In
|
Stock
Subscription
|
Accumulated
Other
Comprehensive
|
Deficit
Accumulated
During
the
Development
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Receivable
|
Loss
|
Stage
|
Deficit
|
||||||||||||||||||||||||||||
|
Issuance of common stock for
services
|
65,280,000 | * | $ | 65,280 | - | $ | - | $ | 16,320 | $ | - | $ | - | - | $ | 81,600 | ||||||||||||||||||||
|
Issuance of common
stock
|
14,720,000 | * | $ | 14,720 | - | $ | - | $ | - | $ | (14,720 | ) | $ | - | - | $ | - | |||||||||||||||||||
|
Net
loss
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | (86,600 | ) | $ | (86,600 | ) | |||||||||||||||||||
|
Balance,
December
31, 2007
|
80,000,000 | $ | 80,000 | - | $ | - | 16,320 | $ | (14,720 | ) | $ | - | (86,600 | ) | $ | (5,000 | ) | |||||||||||||||||||
|
May 28, 2008 Common Shares Outstanding to former HomeLife, Inc. Shareholders
|
563,586 | $ | 564 | - | $ | - | 250,000 | $ | - | $ | - | - | $ | 250,564 | ||||||||||||||||||||||
|
June
13, 2008 Issuance to former MoneyLogixInc.
Shareholder
|
200,000 | $ | 200 | - | $ | - | (200 | ) | $ | - | $ | - | - | $ | - | |||||||||||||||||||||
|
September 17,
2008 – Invoices Paid
by
Shareholder
|
- | $ | - | - | $ | - | 1,436 | $ | - | $ | - | - | $ | 1,436 | ||||||||||||||||||||||
|
May 28, 2008 Preferred
Shares Outstanding
of Former HomeLife,
Inc.
Shareholders
|
- | $ | - | 1,500 | $ | 15,000 | - | $ | - | $ | - | - | $ | 15,000 | ||||||||||||||||||||||
|
September 25,
2008 – Preferred Shares
Cancelled
|
- | $ | - | (1,500 | ) | $ | (15,000 | ) | - | $ | - | $ | - | - | $ | (15,000 | ) | |||||||||||||||||||
|
November
18, 2008 - Invoice Paid
|
- | - | 7,500 | - | - | 7,500 | ||||||||||||||||||||||||||||||
|
Net
Loss
|
- | $ | - | - | $ | - | - | $ | - | $ | - | (272,312 | ) | $ | (272,312 | ) | ||||||||||||||||||||
|
Balance,
December
31, 2008
|
80,763,586 | $ | 80,764 | - | $ | - | 275,056 | $ | (14,720 | ) | $ | - | (358,912 | ) | $ | (17,812 | ) | |||||||||||||||||||
|
May
20, 2009 Purchase and August 22, 2009 Disposition of 2031059
Ontario Limited(net)(Note 5)
|
- | - | 2,627,671 | - | - | - | 2,627,671 | |||||||||||||||||||||||||||||
|
June 30,
2009 Stock subscription exchanged for services
|
- | - | - | - | - | 14,720 | - | - | 14,720 | |||||||||||||||||||||||||||
|
July
9, 2009 Issuance of common stock
|
5,000,000 | 5,000 | 5,000 | |||||||||||||||||||||||||||||||||
|
Foreign
Currency Translation
|
- | - | - | - | - | - | (4,448 | ) | - | (4,448 | ) | |||||||||||||||||||||||||
|
Net
Loss
|
- | $ | - | - | $ | - | - | $ | - | $ | - | (754,266 | ) | $ | (754,266 | ) | ||||||||||||||||||||
|
Balance,
September
30, 2009
|
85,763,586 | $ | 85,764 | - | $ | - | 2,902,727 | $ | - | $ | (4,448 | ) | (1,113,178 | ) | $ | 1,870,865 | ||||||||||||||||||||
*
Share and per share amounts reflect the effect of the May 28, 2008
reorganization.
The
accompanying notes are an integral part of these financial
statements.
F6
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
1.
|
NATURE OF OPERATIONS AND
ORGANIZATION
|
Nature
of Operations
MoneyLogix
Group, Inc. ("MoneyLogix" or the “Company”), (formerly Homelife, Inc.), which
registered a change of name with the State of Nevada on January 29, 2008 was
formerly know as Homelife, Inc. and is organized under the laws of the State of
Nevada.
MoneyLogix
are presently conducted through the Company’s subsidiaries, MoneyLogix Group,
Inc (an Ontario, Canada company) and 2131059 Ontario Limited (“2131059’) (an
Ontario, Canada company). MoneyLogix Group is a
development stage capital investment company focussed on opportunistic
acquisitions in the real estate market. MoneyLogix Group focus
is creating value through timely acquisitions, investing in high-yielding value
enhancement tactics, and executing the best exit strategies for each unique
investment property in Canada, USA and other international
countries.
MoneyLogix
Group, Inc. entered into a share exchange agreement on January 3, 2008 with
MoneyLogix Inc., a Delaware private corporation. The reverse merger transaction
effected a change of control of the Company. The accounting acquirer is
MoneyLogix, Inc. and the historical operations of the Company are the operations
of MoneyLogix, Inc. Pursuant to the terms of the share exchange agreement, the
parties agreed to the following:
|
|
1.
|
Mr. Cimerman, the former Company
Chief executive and majority shareholder, agreed to transfer 458,000
shares of the Company to the Company treasury in exchange for the spin off
of all assets and liabilities of the Company to Mr. Cimerman. This was
executed at closing on May 28, 2008. Mr. Cimerman still had a shareholder
loan to be satisfied by the
Company;
|
|
|
2.
|
MoneyLogix Group agreed to change
the name of the Company from Homelife, Inc. to MoneyLogix Group, Inc. This
was executed on January 29 th ,
2008;
|
|
|
3.
|
MoneyLogix Group agreed to issue
100,000,000 shares of our common stock to MoneyLogix Inc. in exchange for
100% of MoneyLogix Inc.’s issued and outstanding stock. 80,000,000 shares
of the Company were issued on May 28, 2008 to MoneyLogix Inc. 100% of the
shares of MoneyLogix Inc. were transferred to MoneyLogix Group making
MoneyLogix Inc. a wholly owned subsidiary of the Company on May 28, 2008.
On June 13, 2008, 200,000 additional shares of the Company were issued to
MoneyLogix Inc. shareholders. 19,800,000 shares of the Company are still
to be transferred to MoneyLogix Inc. shareholders, post agreement closure
on May 28, 2008, pending changes to the number of shares authorized for
issuance;
|
|
|
4.
|
MoneyLogix Inc. agreed to pay to
the Company $250,000 for the satisfaction of all outstanding debt of the
Company, including the outstanding amount owing to Mr. Cimerman.
MoneyLogix Inc. made payment of $250,000 to an agreed upon trust agent on
May 28, 2008, to be released to the Company upon on the complete
satisfaction of all the terms of the agreement. The cash
occurred between shareholders and did not run through Moneylogix,
Inc., therefore this is a non cash transaction included in
Capital in the accompanying Statements of Stockholder’s
Deficit.
|
|
|
5.
|
The Company will effect a 22 to 1
reverse split of the Company’s stock. The 22 to 1 reverse stock split took
place on May 28, 2008;
|
|
|
6.
|
Following
the 22 to 1 reverse stock split, MoneyLogix Group agreed to issue 490,310
shares of common stock (post 22-for-1 reverse stock split) to Mr.
Cimerman, the former Company Chief executive and majority shareholder, in
consideration for Mr. Cimerman retiring a certain portion of debt the
Company owes him and cancelling 10,000 of Our Class A preferred shares and
50 of Our Class AA Preferred Shares held by Mr. Cimerman. It was agreed
that the 490,310 shares issued to Mr. Cimerman shall be restricted and
locked up for transfer and monetization for 24 months. The
490,310 shares of common stock are included in the total 563,586 shares
dated May 28, 2008 as Common Shares Outstanding to Former Homelife,
Inc. Shareholders in the accompanying Statements of
Stockholder’s Deficit.
|
F7
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
2.
|
BASIS OF
PRESENTATION
|
The
Company has not earned any revenues from limited principal operations and
accordingly, the Company's activities have been accounted for as those of a
"Development Stage Enterprise" as set forth in ASC 915(formerly SFAS No.
7), Accounting and
Reporting by Development Stage Enterprises Among the disclosures required
by ASC 915 are that the Company's financial statements be identified as those of
a development stage company, and that the statements of operations,
stockholders' deficit and cash flows disclose activity since the date of the
Company's inception.
|
3.
|
GOING
CONCERN
|
These
financial statements have been prepared assuming the Company will continue on a
going-concern basis. The Company has incurred losses since inception and the
ability of the Company to continue as a going-concern depends upon its ability
to develop profitable operations and to continue to raise adequate financing.
Accumulated Losses from inception to December 31, 2009 total $1,117,626.
Management is actively targeting sources of additional financing to provide
continuation of the Company’s operations. In order for the Company to meet its
liabilities as they come due and to continue its operations, the Company is
solely dependent upon its ability to generate such financing.
There can
be no assurance that the Company will be able to continue to raise funds, in
which case the Company may be unable to meet is obligations. Should the Company
be unable to realize its assets and discharge its liabilities in the normal
course of business, the net realizable value of its assets may be materially
less than the amounts recorded in these financial statements.
The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
in existence.
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
The
accounting policies of the Company are in accordance with accounting principles
generally accepted in the United States of America. Presented below are those
policies considered particularly significant:
Interim Financial
Statements
The
accompanying interim unaudited financial information has been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations, although management believes that the disclosures are adequate
to make the information presented not misleading. The interim financial
statements should be read in conjunction with the Company's annual financial
statements, notes and accounting policies included in the Company's annual
report on form 10 K for the year ended December 31, 2008 as filed with the SEC.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, are necessary to present fairly the financial position of
the Company as of September 30, 2009 and the related operating results and cash
flows for the interim period presented have been made. The results of operations
of such interim period are not necessarily indicative of the results of the full
year.
Basis of Consolidation and
Presentation
The
accompanying consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and include the accounts of the Company, its wholly-owned subsidiaries
MoneyLogix Group, Inc and 2131059 Ontario Limited Inc. All
significant inter-company transactions and balances have been eliminated upon
consolidation.
F8
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
Comprehensive
Income or Loss
The
Company adopted ASC 220-10, (formerly SFAS No. 130) establishes standards for
reporting and presentation of comprehensive income and its components in a full
set of financial statements. Comprehensive income is presented in the statements
of stockholders’ deficit, and consists of net loss and unrealized gains (loss)
on available for sale marketable securities; foreign currency translation
adjustments and changes in market value of future contracts that qualify as a
hedge; and negative equity adjustments recognized in accordance with ASC
715-10 (formerly SFAS No. 87). ASC 220-10 requires only additional
disclosures in the financial statements and does not affect the Company’s
financial position or results of operations.
Concentration of Credit
Risk
ASC
815-10, (formerly SFAS No. 105) “Disclosure of Information About Financial
Instruments with Off-Balance Sheet Risk and Financial Instruments with
Concentration of Credit Risk”, requires disclosure of any significant
off-balance sheet risk and credit risk concentration. The Company does not have
significant off-balance sheet risk or credit concentration.
Earnings
or Loss Per Share
The
Company accounts for earnings per share pursuant to ASC 260-10-05 (formerly SFAS
No. 128), Earnings per
Share, which requires disclosure on the financial statements of "basic"
and "diluted" earnings (loss) per share. Basic earnings (loss) per share is
computed by dividing net income (loss) by the weighted average number of common
stock outstanding for the year. Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common stock
outstanding plus common stock equivalents (if dilutive) related to stock options
and warrants for each year.
There
were no dilutive financial instruments for the period from December 7, 2007
(inception) to September 30, 2009.
Financial
Instruments
In
accordance with ASC 825-10-50, (formerly SFAS No. 107), "Disclosures
About Fair Value of Financial Instruments" ("SFAS No. 107"), the estimated fair
value of financial instruments has been determined by the Company using
available market information and valuation methodologies. Considerable judgment
is required in estimating fair value. Accordingly, the estimates may not be
indicative of the amounts the Company could realize in a current market
exchange. As of September 30, 2009, the carrying value of accounts payable and
accrued liabilities, advances from related party, and Mortgage Payable
approximate their fair value because of the limited terms of these
instruments.
In
accordance with ASC 820-10, (formerly SFAS No. 157), “Defining Fair Value
Measurement”, the Company adopted the standard which defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosures about fair value
measurements
Foreign
Currency Translation
The
Company accounts for foreign currency translation pursuant to ASC 830-10,
(formerly SFAS No. 52), “Foreign Currency Translation”. The Company’s
functional currency is the Canadian dollar. All assets and liabilities are
translated into United States dollars using the
exchange rates prevailing at the end of the period. Revenues and expenses are
translated using the average exchange rates prevailing throughout the
year.
Unrealized
foreign exchange amounts resulting from translations at different rates
according to their nature are included
in accumulated
other comprehensive income.
Realized
foreign currency transaction gains and losses are recognized in
operations.
F9
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
Income
Taxes
The
Company accounts for income taxes pursuant to ASC 740-10, (formerly SFAS No.
109), Accounting for Income
Taxes. Deferred tax assets and liabilities are recorded for differences
between the financial statements and tax basis of the assets and liabilities
that will result in taxable or deductible amounts in the future based on enacted
tax laws and rates. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized. Income tax
expense is recorded for the amount of income tax payable or refundable for the
period increased or decreased by the change in deferred tax assets and
liabilities during the period.
Impairment
of Long-lived Assets
In
accordance with ASC 360-10-05 (formerly SFAS No. 144), "Accounting for the
Impairment or Disposal of Long-Lived Assets", long-lived assets to be held and
used are analyzed for impairment whenever events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. The Company
evaluates whether events and circumstances have occurred that indicate possible
impairment. If there are indications of impairment, the Company uses future
undiscounted cash flows of the related asset or asset grouping over the
remaining life in measuring whether the assets are recoverable. In the event
such cash flows are not expected to be sufficient to recover the recorded asset
values, the assets are written down to their estimated fair value. Long-lived
assets to be disposed of are reported at the lower of carrying amount or fair
value of asset less cost to sell. As described in note 3, the long-lived assets
have been valued on a going concern basis; however, substantial doubt exists as
to the ability of the Company to continue as a going concern. If the Company
ceases operations, the asset values may be materially impaired.
Property
undergoing development
In
accordance with ASC 835-20( formerly SFAS No. 34),
“Capitalization of Interest Cost” and ASC 970-10(formerly
SFAS No. 67), “Accounting for Costs and Initial Rental Operations of Real Estate
Projects”, we capitalize direct construction and development costs, including
predevelopment costs, interest, property taxes, insurance and other costs
directly related and essential to the acquisition, development or construction
of a project. Pursuant to ASC 835-20 and ASC 970-10, capitalization of
construction, development and redevelopment costs is required while activities
are ongoing to prepare an asset for its intended use. Costs incurred after
a project is substantially complete and ready for its intended use are expensed
as incurred. Costs previously capitalized related to abandoned
acquisitions or development opportunities are written off. Should
development, redevelopment or construction activity cease, interest, property
taxes, insurance and certain costs would no longer be eligible for
capitalization, and would be expensed as incurred
In
accordance with ASC 360-10-5( formerly SFAS 144), we classify a property as
“held for sale” when all of the following criteria for a plan of sale have been
met: (1) management, having the authority to approve the action, commits to
a plan to sell the property; (2) the property is available for immediate
sale in its present condition, subject only to the terms that are usual and
customary; (3) an active program to locate a buyer, and other actions
required to complete the plan to sell, have been initiated; (4) the sale of
the property is probable and is expected to be completed within one year;
(5) the property is being actively marketed for sale at a price that is
reasonable in relation to its current fair value; and (6) actions necessary
to complete the plan of sale indicate that it is unlikely that significant
changes to the plan will be made or that the plan will be withdrawn. When
all of these criteria have been met, the property is classified as “held for
sale”, its operations, including any interest expense directly attributable to
it, are classified as discontinued operations in our consolidated statements of
income and amounts for all prior periods presented are reclassified from
continuing operations to discontinued operations. A loss is recognized for
any initial adjustment of the asset’s carrying amount to fair value less costs
to sell in the period the asset qualifies as “held for sale”.
Depreciation of assets ceases upon designation of a property as “held for
sale”.
F10
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
Stock-Based
Compensation
In
December 2004, ASC 718 was issued (formerly SFAS No. 123R) Share-Based
Payment. ASC 718 establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity incurs liabilities
in exchange for goods or services that are based on the fair value of the
entity’s equity instruments or that may be settled by the issuance of those
equity instruments. ASC 718 focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions.
ASC 718 requires that the compensation cost relating to share-based payment
transactions be recognized in the financial statements. That cost will be
measured based on the fair value of the equity or liability instruments
issued.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. These
estimates are reviewed periodically, and, as adjustments become necessary, they
are reported in earnings in the period in which they become known.
Recent
Accounting Pronouncements
In
December 2007, ASC 805-10 was issued (formerly SFAS No. 141R) Business Combinations. ASC
805-10 establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree. SFAS 141R also provides guidance for recognizing and measuring the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. The guidance will become
effective as of the beginning of the Company’s fiscal year beginning after 15
December 2008. Management believes the adoption of this pronouncement will not
have a material impact on the Company's financial statements.
In
December 2007, ASC 810-10was issued (formerly SFAS No. 160), "Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No. 51”. ASC
810-10 establishes accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810-10
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. As such, the Company is required to
adopt these provisions at the beginning of the fiscal year ended December 31,
2009. The Company is currently evaluating the impact of ASC 810-10 on its
financial statements but does not expect it to have a material
effect.
In March
2008, ASC 815-10 was issued (formerly SFAS No. 161) " Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133”. ASC 815-10 requires enhanced disclosures about an entity’s
derivative and hedging activities. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008 with early application encouraged. As such, the Company is required to
adopt these provisions at the beginning of the fiscal year ended December 31,
2009. The Company is currently evaluating the impact of ASC 815-10 on its
financial statements but does not expect it to have a material
effect.
In May
2008, ASC 105 was issued (formerly SFAS No. 162), “The Hierarchy of Generally Accepted
Accounting Principles”. ASC 105 identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States. ASC 105 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. The Company is currently evaluating the impact of ASC 105 on its
financial statements but does not expect it to have a material
effect.
F11
MONEYLOGIX GROUP,
INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
4.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
|
In May
2008, ASC 944-20 was issued (formerly SFAS No. 163), " Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60”. ASC 944-20 interprets Statement 60 and amends existing
accounting pronouncements to clarify their application to the financial
guarantee insurance contracts included within the scope of that Statement. ASC
944-20 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and all interim periods within those fiscal years. As
such, the Company is required to adopt these provisions at the beginning of the
fiscal year ended December 31, 2009. The Company is currently evaluating the
impact of ASC 944-20 on its financial statements but does not expect it to have
a material effect.
In May
2009, ASC 855-10 was issued(formerly SFAS No.165), “Subsequent Events,” which
establishes general standards for accounting for disclosure of events that occur
after the balance sheet day but before the financial statement are issued or are
available to be issued. The pronouncement requires the disclosure of
the date through which an entity has evaluated subsequent events and the basis
for that date, whether that date represents the date the financial statements
were issued or were available to be issued. ASC 855-10 is effective
with interim and annual financial periods ending after June 15,
2009. Management has evaluated the impact of the adoption of ASC
855-10 and it has no impact the Company’s results of operations,
financial position or cash flows.
In July
2009, ASC 105-10-05 was issued (formerly SFAS No. 168) “FASB Accounting Standards
Codification as the single source of authoritative nongovernmental U.S.
generally accepted accounting principles (GAAP). The Codification is
effective for interim and annual periods ending after
September 15, 2009. All existing accounting
standards are superseded as described in ASC 105-10-05. All other
accounting literature not included in the Codification is
non-authoritative. Management is currently evaluating the impact of
the adoption of ASC 105-10-05but does not expect the adoption of ASC 105-10-05
to impact the Company’s result of operation, financial position or cash
flows.
|
5.
|
ACQUISITION AND
DISPOSITION OF 2131059 ONTARIO
LIMITED
|
ACQUISITION
On May
20, 2009 the Company acquired all of the stock of 2131059 Ontario
Limited. The acquired business 100% owns an approximately 100 acre
property in Barrie, Ontario, Canada which it is developing.
The
purchase price for 2131059 was approximately $23,000,000million (Canadian
$26,300,000) which was funded by assumption of Mortgages Payable
of $7,568,000(Canadian $8,630,000), Accounts Payable
of $175,000(Canadian $200,000) and the issuance of 8,775,000
restricted common shares of MoneyLogix at $1.75(Canadian $2.00) per
share.
F12
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
5.
|
ACQUISITION AND DISPOSITION OF
2131059 ONTARIO
LIMITED(cont’d)
|
|
At May 20, 2009
|
At June 30, 2009
|
|||||||
|
Adjusted
|
||||||||
|
Property
under Development
|
$ | 23,113,000 | $ | 10,736,000 | ||||
|
Cash
and Other Assets
|
3,500 | 3,500 | ||||||
|
Due
to Baywood Homes Partnership
|
130,000 | 130,000 | ||||||
|
Total
assets acquired
|
23,246,500 | 10,869,500 | ||||||
|
Mortgages
Payable
|
7,568,000 | 7,568,000 | ||||||
|
Accounts
Payable
|
289,500 | 289,500 | ||||||
|
Total
Liabilities acquired
|
7,857,500 | 7,857,500 | ||||||
|
Net
assets acquired
|
15,389,000 | 3,012,000 | ||||||
|
Stock
Issued to sellers [8,775,000 common shares]
|
15,389,000 | 3,012,000 | ||||||
|
Net
shares issued
|
$ | 15,389,000 | $ | 3,012,000 | ||||
The above
table comprises our supplemental disclosure of non-cash investing and financing
activities.
DISPOSITION
On
August 24th, 2009
MoneyLogix completed the disposition of 2131059 ONTARIO LIMITED (“Mapleview”
or”2131059”), in accordance with the share purchase agreement between MoneyLogix
and Ralph Canonaco, in trust. Mapleview is the registered owner of the property
municipally known as North Side Mapleview Drive East, Barrie, Ontario comprising
approximately 50 acres of land, being PIN 580910288, S.Pt.Lot 16, Conc, Being
Part 1, Reference 51R-22937, City of Barrie, County of Simcoe, and comprising
approximately 49.48 acres PIN 580911689, S ½ Lot 16, Conc. 12, Being Part 1
Reference Plan 51R-22928, City of Barrie, County of Simcoe.
The
purchaser was part of the original group that MoneyLogix had acquired this
property from. Pursuant to the terms of the agreement, the
purchaser agreed to the purchase price of Fifteen Million,
Two Hundred and Fifteen Thousand, Seven Hundred and Ninety Four
dollars $15,215,794 (CDN $16,387,500).
The
consideration received was satisfied as follows: the purchaser
assumed all existing mortgages at closing of $ 8,792,895 (CDN $9,470,000),
provided mortgages to MoneyLogix with a face value of $2,349,100 (CDN $
2,530,000) and the return of 8,775,000 restricted common shares of MoneyLogix
which were issued in connection with the original purchase of
Mapleview.
The
8,775,000 restricted common shares of MoneyLogix were valued at $0.46(CDN $0.50)
for a total of $4,036,500 (CDN $4,387,500).
F13
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
5.
|
ACQUISITION AND DISPOSITION OF
2131059 ONTARIO
LIMITED(cont’d)
|
The
mortgages received have been valued by management at
$1,867,800 (CDN $2,000,000) and are due December 31, 2009, consisting of
a collateral mortgage in fifth position on Mapleview property and a
collateral mortgage in second position on a property in Downtown
Toronto. The mortgages have an interest rate of 0% to October 28,
2009, and from October 29, 2009 thereafter at the rate of 1.5% per
month. The mortgages have a personal guarantee from the
purchaser.
In
addition to the consideration noted above, MoneyLogix will receive the
following:
Six
Serviced Family Residential Lots, subject to a reasonable cost for severance and
a cost sharing agreement. Management estimates the value of these
serviced lots have a net total value of $373,560 (CDN $400,000);
100
residential units, subject to a cost sharing agreement. Management
estimates the value of these residential lots have a net total value of $700,426
($750,000);
An option
to acquire 150 residential units, subject to a cost sharing agreement, for
$14,009 (CDN $15,000) each. Management has not estimated a value at
the present time; and,
The
purchaser assumed accounts payable of up to $280,170 (CDN
$300,000).
|
Mortgages
Receivable-
|
$
|
1,867,800
|
||
|
Serviced
Single Family Residential Lots (net)
|
373,560
|
|||
|
Residential
Units- Gross (subject to cost sharing agreement)
|
700,426
|
|||
|
$
|
2,941,786
|
* Option
to Buy 150 Units @$14,009 (subject to cost sharing
agreement)
|
6.
|
ADVANCES
FROM RELATED PARTY
|
Amounts
due from a related party are non-interest bearing, due on demand and have no
fixed repayment terms.
|
7.
|
STOCK
COMPENSATION LIABILITY
|
The
Company has recorded stock compensation liability for its Company Management and
Officers in the amount of $408,000 for 800,000 shares in regards to their
employment agreements. The shares will be issued in December
2009.
|
8.
|
INCOME
TAXES
|
The
Company accounts for income taxes in accordance with ASC 740-20, (formerly SFAS
No. 109). ASC 740-20 prescribes the use of the liability method whereby deferred
tax asset and liability account balances are determined based on differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates. The effects of future changes in tax laws
or rates are not anticipated.
Under ASC
740-20 income taxes are recognized for the following: a) amount of tax payable
for the current year, and b) deferred tax liabilities and assets for future tax
consequences of events that have been recognized differently in the financial
statements than for tax purposes.
The
Company has income tax losses available to be applied against future years
income as a result of the losses incurred since inception. However, due to the
losses incurred in the period and expected future operating results, management
determined that it is more likely than not that the deferred tax asset resulting
from the tax losses available for carry forward will not be realized through the
reduction of future income tax payments. Accordingly a 100% valuation allowance
has been recorded for income tax losses available for carry
forward.
F14
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,
2009
|
9.
|
CAPITAL
STOCK
|
a) Authorized
100,000
Class A Preferred shares of no par value, 6% non-cumulative dividend, voting,
convertible to common shares at the option of the shareholder at a price equal
to the face value of the Class A shares. Each Class A Preferred share carries
1,000 votes as compared with 1 vote for each Common share. There were
no shares issued and outstanding at September 30, 2009 and
December 31, 2008.
300,000,000
Common shares of $0.001 par value
Issued
|
September 30,
|
December 31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Shares
Issued and Outstanding
|
85,763,586 | 80,763,586 | ||||||
| $ | 85,764 | $ | 80,764 | |||||
|
10.
|
CONTINGINCIES
|
Two
former employees (“Plaintiffs”) have commenced an action on October 2009 in
Ontario, Canada against the Company. The statement of claim is for an
aggregate payment of approximately $466,950($500,000 CDN) related to wrongful
dismissal. The Company plans to vigorously defend itself in this
claim and has will launch a counter suit against the plaintiffs in the amount of
$1,903,000($2,000,000 CDN). Included in Accounts Payable and
Stock Compensation Liability is approximately $260,000 relating to salaries,
expenses and stock compensation. At the present time, the Company and
its legal counsel agree that the outcome of this proceeding cannot be reasonably
determined at this time
11.
SUBSEQUENT
EVENTS
On
November 17, 2009, the Company sold the Mortgage Receivable, Residential Units
and the option to acquire 150 residential units for cash consideration of
$1,903,800 (CDN $2,000,000), two promissory note of $ 230,588 (CDN $245,240) and
$ 713,9255 (CDN $750,000). Six Serviced Family Residential Lots with a net total
value of $ 373,560 (CDN $400,000) were retained. The sale of the Mortgage
Receivable was to an unrelated party and the two promissory notes were to Ralph
Canonaco of Baywood Homes Partnership. The terms of the $230,588 promissory note
are interest bearing at 1% per month due December 31, 2009 and secured by a
6`i'
Mortgage on the Mapleview Property. The terms of the $ 713,925 promissory note
is non interest bearing till August 2010 and then 12% per annum and due December
31, 2010.
F15