Attached files
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EX-31.1 - Panacea Global, Inc. | v185526_ex31-1.htm |
EX-32.1 - Panacea Global, Inc. | v185526_ex32-1.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.
|
FOR
THE QUARTERLY PERIOD ENDED MARCH 31, 2010
OR
¨
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
File #
MONEYLOGIX GROUP,
INC.
(Exact
name of registrant as specified in its charter)
NEVADA
|
33-0680443
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
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):
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
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
|
|
Outstanding at May 17,
2010
|
Common
Stock, $.001 par value
|
85,763,586
|
TABLE
OF CONTENTS
Item
1.
|
Financial
Statements
|
3
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
|
4
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
9
|
Item
4T.
|
Control
and Procedures
|
9
|
PART
II— OTHER INFORMATION
|
||
Item
1
|
Legal
Proceedings
|
11
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
11
|
Item
3.
|
Defaults
Upon Senior Securities
|
11
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
11
|
Item
5.
|
Other
Information
|
11
|
Item
6.
|
Exhibits
and Reports on Form 8-K
|
12
|
SIGNATURE
|
12
|
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 ended March 31, 2010
are not necessarily indicative of results that may be expected for the year
ending December 31, 2010.
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 ending March 31, 2010. The following
information should be read in conjunction with the reviewed financial statements
for the period ending March 31, 2010 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.
To
execute the business strategy, the following individuals were added to our
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 has filled the
duties of President & Chief Executive Officer as of November 15,
2009.
MoneyLogix
are presently conducted through the Company’s subsidiaries, MoneyLogix Group,
Inc (an Ontario, Canada company).
As of
May14, 2010 MoneyLogix operated out of a space located at 260 Edgeley Blvd,
Suite 12, Concord, Ontario, Canada L4K 3Y4. Our telephone number is
(905)761-1400 and our fax number is (877)410-4845. Our internet
website can be found under the domain name of www.moneylogixgroup.com
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.
4
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.
Under the
purchase method of accounting, the initial purchase price is allocated to
2131059’s 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
|
||||
(Numbers
rounded to the
nearest 0000)
|
||||
Property
under Development
|
$
|
23,113,000
|
||
Cash
and Other Assets
|
4,000
|
|||
Due
from Baywood Homes Partnership
|
130,000
|
|||
Total
assets acquired
|
23,247,000
|
|||
Mortgages
Payable
|
7,568,000
|
|||
Accounts
Payable(limited to $175,000 by seller)
|
290,000
|
|||
Total
Liabilities acquired
|
7,858,000
|
|||
Net
assets acquired
|
15,389,000
|
|||
Stock
Issued to sellers [8,775,000@$1.7538 US]
|
15,389,000
|
|||
Net
shares issued
|
$
|
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 consisting of the
following:
May 20, 2009
|
||||
Mortgage
notes payable (a)
|
$
|
5,813,847
|
||
Mortgage
notes payable (b)
|
1,052,280
|
|||
Mortgage
notes payable (c)
|
701,520
|
|||
Totals
|
$
|
7,567,647
|
(a)
|
Mortgage
note payable to Firm Capital payable in monthly instalments, 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.
|
(b)
|
Mortgage
note payable to Sora Development Corp payable in monthly instalments of
interest only, at a rate 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.
|
5
(c)
|
Mortgage
note payable to C-1 Holdings Inc. payable in monthly instalments 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.
|
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
occurring on July 9, 2009, in consideration for the cancelation of the
obligation to issue 19,800,000 shares to the shareholder, 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 in 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. The
Trisan mortgage was paid out in November 2009
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 originally 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 per the
agreement 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:
Two
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)
6
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).
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 for the best use of
the company’s assets. 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 equal to $1,903,800 (CDN $2,000,000),
two promissory notes equal to $ 230,588 (CDN $245,240) and $ 713,9255 (CDN
$750,000). Two Serviced Family Residential Lots with a net total value of $
373,560 (CDN $400,000) were retained. The Promissory Note equal to $230,346is
interest bearing at 1% per month due December 31, 2009. This note is secured by
a 6th
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.
Business
of Issuer
Products
and Services
MoneyLogix Group is an early
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.
It is
MoneyLogix' intent to use its 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
MoneyLogix
is currently developing a strategy to focus on real estate investment
activities.
As of May14, 2010 MoneyLogix operated
out of a space located at 260 Edgeley Blvd, Suite 12, Concord, Ontario, Canada
L4K 3Y4. Our telephone number is (905)761-1400 and our fax number is
(877)410-4845. Our internet website can be found under the domain
name of www.moneylogixgroup.com
7
PART
II
Results of
Operations
The
Company reported interest revenue of $387 from operations during the three month
ending March 31, 2010. Comparatively, the Company reported no revenue
from operations during the three month period ending March 31, 2009. The Company reported revenues of
$3,664 for the period from December 7, 2007
(the inception date of MoneyLogix) to March 31, 2010
The
Company incurred expenses of $109,580 for the three month period ending March
31, 2010. The primary expense was for professional fees ,namely legal
and accounting, and consulting and payroll fees in
the period. Comparatively, for the three month
period ending March 31, 2009, the Company incurred professional fees
expenditures of $2,250 in regards to the quarterly filings. The Company reported
total operating expenses of $1,267,161 period from December 7, 2007 (the
inception date) to March 31, 2010.
The
Company recorded a net loss for the three month period ending March 31, 2010 of
$109,193 with a comparative net loss for the three months period
ending March 31,2009 of $2,250. For the period
from December 7, 2007 (inception date) to March 31, 2010 the Company recorded a
cumulative Net Loss of $1,263,497
Liquidity
and Capital Resources
At March
31, 2010, the Company had $1,272,922 of cash in hand and $2,361,948
in Total Assets. Comparatively at December 31, 2009 the
Company has $1,098,865 of cash in hand and $2,382,312 in Total
Assets.
At March
31, 2010, we had liabilities of $292,886 comprised of stock based liability
equal to $204,000 and accounts payable and accrued liabilities and due to
related parties of 88,886. Comparatively at December
31, 2009 the Company had liabilities of $281,072 comprised of stock
based liability equal to $204,000 and Accounts Payable and Related Parties of
$77,072
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
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 March 31, 2010 total
$1,263,497. 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 its 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.
Off-Balance
Sheet Arrangements
No
reporting requirement for a smaller reporting company.
8
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not
applicable as a smaller reporting company.
ITEM
4. 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 March 31, 2010. This
evaluation was accomplished under the supervision and with the participation of
our chief executive officer/principal executive officer who concluded that our
disclosure controls and procedures are not effective to ensure that all material
information required to be filed in the Form 10-K has been made known to
them.
Management’s Report on Internal Control
Over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a-15(1) and 15(d) of the Exchange
Act. Internal control over financial reporting is a process to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with GAAP. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projection of any evaluation of effectiveness to
future periods is subject to the risk that controls may become inadequate
because of conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
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.
A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. In connection with
our management’s assessment of our internal control over financial reporting as
required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified
certain material weaknesses in our internal control over financial reporting as
of March 31, 2010:
|
·
|
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.
|
Because
of the material weaknesses above, management has concluded that we did not
maintain effective internal control over financial reporting as of March 31,
2010, based on Internal Control over Financial Reporting – Guidance for Smaller
Public Companies issued by COSO.
9
Remediation of Material
Weaknesses in Internal Control Over Financial Reporting
In order
to remedy our existing internal control deficiencies, as our finances allow, we
will hire a Chief Financial Officer and 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-K that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Commission that permit
the Company to provide only management’s report in this annual
report.
10
PART
II: OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
|
A)
|
The
Company have commenced an action on February 2010 in Ontario against
Lawrence Cogan, Ralph Canonaco, Transbay Developments Inc and 213105
Ontario Limited (“Defendants”). The statement of claim is for
aggregate payments equal to approximately the promissory note of $142,725
($150,000 CDN) and accrued interest from November 17, 2009 to the present
date. The promissory was due December 31, 2009 with four percent interest
per month. The Defendants have filed a notice to intent to
defend on March 23, 2010 but not have yet filed a statement of
defence. The Company will pursue all legal means to collect
these promissory note and the related interest
payments.
|
|
B)
|
The
Company have commenced an action on February 2010 in Ontario against Ralph
Canonaco and 213105 Ontario Limited (“Defendants”). The
statement of claim is for the severance of the two real property lots on
the property held by the defendants and damages totalling
$3,000,000. The defendants were required to severe the real
property lots per an agreement dated August 15, 2009 and failed
to do so. The Defendants have filed a statement of
defence in April 2010 which management is reviewing. The
Company will pursue all legal means to severe these real property lots and
damages.
|
|
C)
|
Two
former employees, Adam Seanor and Tom Copeland, (“Plaintiffs”) have
commenced an action on October 2009 in Ontario, Canada against the
Company. The statement of claim is for an aggregate payment
equal to approximately $476,000($500,000 CDN) related to a wrongful
dismissal. The Company plans to vigorously defend itself in
this claim and has launched 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 $226,000 relating to
salaries, expenses and stock compensation. The stock compensation
liability was set up during Q2 2009 and has not been removed since this is
a contentious issue. We have not accrued for this event since, at the
present time, the Company and its legal counsel agree that the likelihood
of the outcome of this proceeding cannot be reasonably determined or
quantified.
|
|
D)
|
A
Company and its principals (“Plaintiffs”) have commenced an action on
December 2009 in Ontario, Canada against the Company. The status of this
action is inactive due to numerous errors in the statement of claim which
were identified by Company’s legal counsel and submitted back to the
Plaintiffs to correct and resubmit. The Plaintiffs have not yet
resubmitted their amended statement of claim since they were contacted in
February 2010. The incorrect statement of claim is for an aggregate
payment of approximately $7,707,000($8,100,000 CDN) and 6,250,000 common
shares from treasury related to breach of
contract. The Company plans to vigorously defend
itself once it receives the amended claim and will launch a counter suit
against the plaintiffs. Included in Accounts Payable is
approximately $6,600 ( $6,945 CDN) relating to rental expense charged to
the company. No additional amounts related to this claim have
been accrued, as there is no valid claims against us and therefore, no
assessment can be reasonably made or determined at this
time.
|
E)
|
|
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.
11
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.
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:
May 17, 2010
12
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
MARCH 31,
2010
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
– F16
|
F2
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
CONDENSED
CONSOLIDATED BALANCE SHEETS
March 31,
2010
(Unaudited)
|
December 31,
2009
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$
|
1,272,922
|
$
|
1,098,865
|
||||
Interest
Receivable
|
-
|
3,451
|
||||||
Other
Assets
|
1,186
|
-
|
||||||
Property
undergoing development(Note 5)
|
393,760
|
380,600
|
||||||
Promissory
Notes and Mortgage Receivable(Note 6)
|
689,080
|
899,396
|
||||||
Total
Assets
|
$
|
2,361,948
|
$
|
2,382,312
|
||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable and accrued liabilities
|
$
|
75,916
|
$
|
32,676
|
||||
Due
to Related Parties
|
12,970
|
44,396
|
||||||
Stock
Compensation Liability(Note 7)
|
204,000
|
204,000
|
||||||
Total
Liabilities
|
292,886
|
281,072
|
||||||
Stockholders’
Deficit
|
||||||||
Preferred
Stock, $10 par value; 100,000 shares authorized, none issued (Note
9)
|
-
|
-
|
||||||
Capital
stock, $.001 par value; 300,000,000 shares authorized; 85,763,586 issued
and outstanding (Note 9)
|
85,764
|
85,764
|
||||||
Additional
Paid in Capital
|
3,127,424
|
3,127,424
|
||||||
Other
Comprehensive Loss
|
119,370
|
)
|
42,356
|
|||||
Deficit
accumulated during the development stage
|
(1,263,497
|
)
|
(1,154,304
|
)
|
||||
Total
Stockholders’ Deficit
|
2,069,061
|
2,101,240
|
)
|
|||||
Total
Liabilities and Stockholders’ Deficit
|
$
|
2,361,948
|
$
|
2,382,312
|
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)
Period End March 31
|
For the Period
December 7,
2007(inception)
|
|||||||||||
|
2010
|
2009
|
to March 31, 2010
|
|||||||||
REVENUES
|
$ | 387 | $ | 3,664 | ||||||||
EXPENSES
|
||||||||||||
Professional
Fees
|
31,461 | 2,250 | 178,091 | |||||||||
Office
and General
|
3,665 | 60,027 | ||||||||||
Promissory
Note allowance
|
- | 180,660 | ||||||||||
Stock
Compensation expense
|
- | 204,000 | ||||||||||
Consulting
and Payroll Fees
|
74,454 | 393,819 | ||||||||||
Cost
of Reorganization
|
- | 250,564 | ||||||||||
TOTAL
OPERATING EXPENSES
|
109,580 | 2,250 | 1,267,161 | |||||||||
NET
LOSS
|
$ | (109,193 | ) | $ | (2,250 | ) | $ | (1,263,497 | ) | |||
Foreign
Currency Translation
|
77,014 | 119,370 | ||||||||||
COMPREHENSIVE
INCOME (LOSS)
|
(32,179 | ) | (2,250 | ) | (1,144,127 | ) | ||||||
Net
loss per share - basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
Weighted
average number of shares
|
||||||||||||
outstanding
- basic and diluted
|
85,763,586 | 80,763,586 | 83,070,949 |
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)
Period End
March 31,
2010
|
Period End
March 31, 2009
|
For the Period
from Inception
(December 7,
2007)
to
March 31,
2010
|
||||||||||
|
||||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
loss
|
$
|
(109,193
|
)
|
$ |
(2,250
|
)
|
$
|
(1,263,497
|
)
|
|||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Interest
receivable
|
3,486
|
-
|
||||||||||
Non-Cash
Cost of Reorganization
|
250,564
|
|||||||||||
Other
assets
|
(1,159
|
) |
(1,159
|
) | ||||||||
Expenses
paid by Stockholder
|
-
|
8,936
|
||||||||||
Stock
subscription receivable
|
-
|
14,720
|
||||||||||
Stock compensation
expense
|
-
|
285,600
|
||||||||||
Accounts
Payable and accrued liabilities
|
11,185
|
2,250
|
93,887
|
|||||||||
Net
Cash Used in Operating Activities
|
(95,113
|
) |
-
|
(610,976
|
)
|
|||||||
Cash
Flows from Investing Activities
|
||||||||||||
Increase
in Property under development
|
-
|
-
|
(129,463
|
) | ||||||||
Increase
in Promissory Notes
|
197,156
|
-
|
65,591
|
|||||||||
Sale
of Mortgage Receivable
|
-
|
-
|
1,831,400
|
|||||||||
Net
Cash Provided by Investing Activities
|
197,156
|
-
|
1,769,528
|
|||||||||
Cash
Flows from Financing Activities
|
-
|
-
|
-
|
|||||||||
Net
Cash Provided by Financing Activities
|
-
|
-
|
-
|
|||||||||
Foreign
Exchange on Balances
|
77,014
|
-
|
119,370
|
|||||||||
Cash
and Cash Equivalents - Beginning of Period
|
1,098,865
|
-
|
-
|
|||||||||
Cash
and Cash Equivalents - End of Period
|
$
|
1,277,922
|
$
|
-
|
$
|
1,277,922
|
||||||
Supplemental
Cash Flow Information
|
||||||||||||
Interest
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Income
taxes paid
|
$
|
-
|
$
|
-
|
$
|
-
|
The
accompanying notes are an integral part of these financial
statements.
F5
MONEYLOGIX
GROUP, INC.
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE PERIOD FROM THE DATE OF INCEPTION
(DECEMBER
7, 2007) TO MARCH 31, 2010(Unaudited)
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)
|
-
|
-
|
-
|
-
|
2,852,368
|
-
|
-
|
-
|
2,852,368
|
||||||||||||||||||||||||
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
|
-
|
-
|
-
|
-
|
-
|
-
|
42,356
|
-
|
42,356
|
||||||||||||||||||||||||
Net
Loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(795,392)
|
(795,392
|
)
|
|||||||||||||||||||||||
Balance, December
31, 2009
|
85,763,586
|
$
|
85,764
|
-
|
$
|
-
|
3,127,424
|
$
|
-
|
$
|
42,356
|
(1,154,304)
|
$
|
2,101,240
|
|||||||||||||||||||
Foreign
Currency Translation
|
-
|
-
|
-
|
-
|
-
|
-
|
77,014
|
-
|
77,014
|
||||||||||||||||||||||||
Net
Loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(109,193)
|
(109,193)
|
||||||||||||||||||||||||
Balance, March 31,
2010
|
85,763,586
|
$
|
85,764
|
-
|
$
|
-
|
3,127,424
|
$
|
-
|
$
|
119,370
|
(1,263,497)
|
$
|
2,069,061
|
* 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.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
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 known 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). 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 spinoff 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,
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. On July 9, 2009
5,000,000 shares of the company were issued and the remaining 14,800,000
obligation were cancelled for consideration of a mortgage of approximately
$900,000($950,000 Canadian), being placed on the Mapleview
property.
|
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 was transacted between shareholders and did not run through
MoneyLogix, Inc., therefore this is a non cash transaction included in
Capital in the accompanying Statements of Stockholders
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
Stockholders Deficit.
|
F7
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
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 March 31, 2010 total
$1,263,497. 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 its 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, 2009 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 March 31, 2010 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. 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
MARCH
31, 2010
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.
Cash
and Cash Equivalents
The
Company considers cash and highly liquid instruments with an original maturity
of three months or less to be cash and equivalents.
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 are
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 March 31,2010.
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 December 31, 2009, the carrying value of accounts payable and
accrued liabilities, advances from related party, and mortgage receivable and
promissory notes 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
F9
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
4.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
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.
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
F10
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
4.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
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”.
Revenue
Recognition
Revenue
consists of interest earned from investments and is only recognized once earned
and collection is reasonable determined.
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
April 2009, the FASB issued ASC 820-10-65-4 (formerly referred to as FSP
SFAS 157-4), "Determining Whether a Market Is Not Active and a Transaction Is
Not Distressed." ASC 820-10-65-4 provides guidelines for making fair value
measurements more consistent with the principles presented in ASC 820-10-65-1.
ASC 820-10-65-4 provides additional authoritative guidance in determining
whether a market is active or inactive, and whether a transaction is distressed,
is applicable to all assets and liabilities (i.e. financial and non-financial)
and will require enhanced disclosures. This standard is effective for periods
ending after June 15, 2009. The Company has adopted this standard and
determined that it does not have an impact on its financial position and results
of operations.
In
April 2009, the FASB issued ASC 825-10-65-1 (formerly referred to as FSP
SFAS 107-1 and APB 28-1), "Interim Disclosures about Fair Value of Financial
Instruments," and "Disclosures about Fair Value of Financial Instruments,
(formerly referred to as FSP SFAS 107)" to require disclosures about fair value
of financial instruments in interim as well as in annual financial statements.
ASC 825-10-65-1 also includes an amendment to "Interim Financial Reporting
(formerly referred to as APB 28-1)," to require those disclosures in all interim
financial statements. This standard is effective for periods ending after
June 15, 2009. The Company has adopted this standard and determined that it
does not have an impact on its financial position and results of
operations.
F11
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
4.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES(continued)
|
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.
Recent
Accounting Pronouncements (continued)
In
October 2009, the FASB issued the “Accounting Standards Update (“ASU”) 2009-13
Multiple Deliverable Revenue Arrangements a consensus of EITF” (formerly topic
08-1) an amendment to ASC 605-25. The update provides amendments to the criteria
in Subtopic 605-25 for separating consideration in multiple-deliverable
arrangements. The amendments in this update establish a selling price hierarchy
for determining the selling price of a deliverable. The selling price used for
each deliverable will be based on vendor-specific objective evidence if
available, third-party evidence if vendor-specific objective evidence is not
available, or estimated selling price if neither vendor-specific objective
evidence nor third-party evidence is available. The amendments in this update
also will replace the term “fair value” in the revenue allocation guidance with
the term “selling price” in order to clarify that the allocation of revenue is
based on entity-specific assumptions rather than assumptions of a marketplace
participant. The amendments will also eliminate the residual method of
allocation and require that arrangement consideration be allocated at the
inception of the arrangement to all deliverables using the relative selling
price method. The relative selling price method allocates any discount in the
arrangement proportionally to each deliverable on the basis of each
deliverable’s selling price. The update will be effective for revenue
arrangements entered into or modified in fiscal year beginning on or after June
15, 2010 with earlier adoption permitted. The adoption of this standard is not
expected to have material impact on the Company’s consolidated financial
statements.
5.
|
ACQUISITION AND
DISPOSITION OF 2131059 ONTARIO LIMITED AND SUBSEQUENT CONSIDERATION
DISPOSITION
|
ACQUISITION
On May
20, 2009 the Company acquired all of the stock of 2131059 Ontario
Limited. The acquired business owns 100% of an 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), Net 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.
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 Company disposed of 2131059, as further
discussed below, on August 24, 2009 and adjusted the initial purchase price
based on the fair market valuation of the disposition. The fair
market valuation has been adjusted to Additional Paid in Capital per ASC
805-10 since the disposition was back to a related party of the original seller.
The original share price for the 8,775,000 was $1.75(Canadian $2.00) was
adjusted to $0.34(Canadian $0.37). The preliminary purchase price
allocation as of May 20, 2009 and the adjusted purchase price allocation
adjusted as of June 30, 2009 is approximately as follows:
F12
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
5.
|
ACQUISITION AND
DISPOSITION OF 2131059 ONTARIO LIMITED AND SUBSEQUENT CONSIDERATION
DISPOSITION (continued)
|
At May 20, 2009
|
At June 30, 2009
|
|||||||
Adjusted
|
||||||||
Property
under Development
|
$ | 23,113,000 | $ | 10,736,000 | ||||
Cash
and Other Assets
|
4,000 | 3,500 | ||||||
Due
to Baywood Homes Partnership(1)
|
130,000 | 130,000 | ||||||
Total
assets acquired
|
23,247,000 | 10,869,500 | ||||||
Mortgages
Payable
|
7,568,000 | 7,568,000 | ||||||
Accounts
Payable(1)
|
290,000 | 289,500 | ||||||
Total
Liabilities acquired
|
7,858,000 | 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.
(1)
|
The
agreement called for Accounts Payable to be a limited to
$175,000. The difference would be owed back to the 2131059 by
Baywood Homes Partnership.
|
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 which comprises of two lots being approximately 100
acres. The first lot is 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 the second lot
of 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 originally 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 $16,051,351 (CDN $17,287,305).
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 per the
agreement were valued at $0.46(CDN $0.50) for a total of
$4,036,500 (CDN $4,387,500).
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.
F13
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
5.
|
ACQUISITION AND
DISPOSITION OF 2131059 ONTARIO LIMITED AND SUBSEQUENT CONSIDERATION
DISPOSITION (cont’d)
|
In
addition to the consideration noted above, MoneyLogix will receive the
following:
Two
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).
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)
SUBSEQUENT
CONSIDERATION DISPOSITION
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 $ 230,346 (Note A-CDN $245,240) and $ 713,625
(Note C-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 6th
Mortgage on the Mapleview Property. The funds were received January
7, 2010. The terms of the $ 713,625 promissory note is non interest
bearing till August 2010 and then 12 % per annum and due December 31,
2010.
6.
|
PROMISSORY
NOTES AND MORTGAGE RECEIVABLE
|
March 31,
2010
|
December 31,
2009
|
|||||||
Promissory
Note and Interest
Receivable - A
|
$ | - | $ | 233,346 | ||||
Promissory
Note- B
|
147,660 | 142,725 | ||||||
Promissory
Note- C
|
738,300 | 713,625 | ||||||
885,960 | 1,089,696 | |||||||
Allowance
|
(196,880 | ) | (190,300 | ) | ||||
Total
|
$ | 689,080 | $ | 899,396 |
F14
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
6.
|
PROMISSORY
NOTES AND MORTGAGE
RECEIVABLE(continued)
|
Notes
receivable are stated net of an allowance for doubtful accounts. The company
estimated the allowance based on management
estimation and timeliness of collection for charging off uncollectable
loans
A.
|
The
Promissory Note of $233,346 (CDN $245,240) to Ralph Canonaco of Baywood
Homes Partnership is interest bearing at 1% per month due December 31,
2009 and secured by a 6th
Mortgage on the Mapleview Property. Interest of $3,000 has been
included in the receivable. The funds were received January 7,
2010.
|
B.
|
The
Promissory Note of $ 147,660 (CDN $150,000) to Lawrence Cogan is interest
bearing at 4% per month due March 17, 2010 and guaranteed by Ralph
Canonaco, Transfer Realty Inc., Transbay Developments Inc and 2131059
Ontario Limited.. The funds have not been received and the
Company is actively attempting to collect these
funds.
|
C.
|
The
Promissory Note of $738,300 (CDN $750,000) to Ralph Canonaco of Baywood
Homes Partnership is non interest bearing till August 2010 and then
12 % per annum and due December 31,
2010.
|
7.
|
STOCK
COMPENSATION LIABILITY
|
The
Company has recorded stock compensation liability for its Company Management and
Officers in the amount of $204,000 for 400,000 shares in regards to their
employment agreements. Per note 10(a), the employees are involved in
a lawsuit for wrongful dismissal, and until the legal situation is resolved, the
share compensation liability will not be cancelled.
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.
F15
MONEYLOGIX
GROUP, INC.
[Formerly
Known as Homelife, Inc.]
(A
Development Stage Company)
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2010
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 December 31, 2009.
300,000,000
Common shares of $0.001 par value
b)
Issued
December 31,
|
December 31,
|
|||||||
2009
|
2009
|
|||||||
Shares
Issued and Outstanding
|
85,763,586 | 85,763,586 | ||||||
$ | 85,764 | $ | 85,764 |
10.
|
CONTINGINCIES
|
A)
|
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 $492,200($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 $1,968,800 ($2,000,000
CDN). Included in Accounts Payable and Stock Compensation
Liability is approximately $226,000 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.
|
B)
|
A
Company and its principals (“Plaintiffs”) have commenced an action on
December 2009 in Ontario, Canada against the Company. The
statement of claim is for an aggregate payment of approximately
$7,973,640($8,100,000 CDN) and 6,250,000 common shares from treasury
related to breach of contract. The Company plans to
vigorously defend itself in this claim and may launch a counter suit
against the plaintiffs. Included in Accounts Payable is
approximately $6,837 ($ 6,945 CDN) relating to
rental expense charged to the company. 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
|
Subsequent
events are evaluated through May 17, 2010, the date the financial statements
were issued.
F16