8-K 1 cics8k11510.txt CICS 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K --------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO.: 0-28887 Date of Report: August 1, 2009 CARBONICS CAPITAL CORPORATION -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 22-3328734 -------------------------------------------------------------------------------- (State of other jurisdiction of (IRS Employer incorporation or organization Identification No.) One Penn Plaza, Suite 1612, New York, NY 10019 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212) 994-5374 -------------------------------------------------------------------------------- (Registrant's telephone number including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: __ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) __ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) __ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) __ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. Year Ended December 31, 2009 and Quarter Ended March 31, 2009 On August 1, 2009 the Board of Directors of Carbonics Capital Corporation determined that the financial statements of Carbonics Capital included in its Annual Report on Form 10-K for the year ended December 31, 2008 and in its Quarterly Report on Form 10-Q for the three month period ended March 31, 2009 should no longer be relied upon. The Board determined that the Company's prior policies relating to accounting for the impact of conversion features embedded in the Company's various derivative securities should be revised to be consistent with recent guidance involving the interpretation of FASB Accounting Standards Codification 480, due to the variable number of the Company's common shares issuable upon conversion of the company's various derivative securities. The Board of Directors discussed its conclusion with Rosenberg Rich Baker Berman & Company, the Company's independent registered public accounting firm. To remedy the errors in the 2008 financial statements, Carbonics Capital will file an amendment to its Annual Report on Form 10-K for the year ended December 31, 2008 and an amendment to its Quarterly Report on Form 10-Q for the period ended March 31, 2009. The amendments will contain restated financial statements. The effect of the restatement on the balance sheets and statements of operations as originally reported is demonstrated below:
12/31/08 12/31/08 12/31/07 12/31/07 Balance Sheets: As reported As restated As reported As restated ----------------------------------- ------------------------------ Convertible debentures, current $ 2,006,387 $ 9,235,713 $ 1,490,247 $ 3,605,467 Liability for derivative instruments 10,310,380 -- 1,781,903 -- Accumulated deficit (138,053,599) (135,036,278) (128,319,925) (128,653,242) 12/31/08 12/31/08 12/31/07 12/31/07 Statements of Operations: As reported As restated As reported As restated ----------------------------------- ------------------------------ Loss on fair value-derivatives $ (8,528,477) $ -- $ (637,817) $ -- Amortization of debt discount (579,240) -- (2,130,031) (330,519) Change in conversion liabilities -- (5,757,079) -- (1,251,891) Loss from continuing operations (9,733,673) (6,383,036) (14,329,724) (13,144,286) Net income (loss) (9,733,673) (6,383,036) (43,071,577) (41,886,139) Earnings (loss) per share: Continuing operations $ (0.00) $ (0.06) $ (1.61) $ (1.47) Discontinued operations $ (0.00) $ (0.00) $ (3.22) $ (3.22) Total, basic and diluted $ (0.00) $ (0.06) $ (4.83) $ (4.70)
3/31/09 3/31/09 Balance Sheets: As reported As restated ------------------------------ Convertible debentures $ 2,049,074 $ 6,348,055 Liability for derivative instruments 4,650,932 -- Accumulated deficit (132,563,958) (132,280,402)
3/31/09 3/31/09 3/31/08 3/31/08 Statements of Operations: As reported As restated As reported As restated ---------------------------------- --------------------------- Loss on fair value-derivatives $ 5,659,448 $ -- $ 1,567,573 $ -- Amortization of debt discount (47,348) -- (152,720) -- Change in conversion liabilities -- 2,878,336 -- 1,189,051 Conversion liability expense -- -- -- (493) Income (loss) from continuing operations 5,511,523 2,755,877 1,190,577 964,776 Net income (loss) 5,489,641 2,755,877 1,190,577 964,776 Earnings (loss) per share: Continuing operations $ 0.04 $ (0.02) $ 0.12 $ 0.10 Total, basic and diluted $ 0.04 $ (0.02) $ 0.12 $ 0.10
Six Month Period Ended June 30, 2009 and Nine Month Period Ended September 30, 2009 On December 17, 2009 the Board of Directors of Carbonics Capital Corporation determined that the financial statements of Carbonics Capital included in its Quarterly Reports on Form 10-Q for the periods ended June 30, 2009 and September 30, 2009 should no longer be relied upon. Carbonics Capital and GS AgriFuels had previously intended to effect an assignment of GS AgriFuels' note payable and convertible debenture obligations and related accrued interest that may be due (the "Purchase Obligations") from GS AgriFuels to certain selling shareholders (the "Selling Shareholders") of Carbonics Capital's Sustainable Systems, Inc. subsidiary. Accordingly, Carbonics Capital accrued the effect of the assignment in its financial statements for the periods ended June 30, 2009 and September 30, 2009. However, GS AgriFuels did not receive the consent of the Selling Shareholders to the assignment of the Purchase Obligations to Carbonics Capital, which was required pursuant to the agreement between GS AgriFuels and the Selling Shareholders. Therefore, GS AgriFuels was not permitted to assign the relevant debt to Carbonics Capital. Accordingly, the Board determined that the effects of the transfer of the Purchase Obligations must be reversed on the Carbonics Capital financial statements. The Board of Directors discussed its conclusion with Rosenberg Rich Baker Berman & Company, the Company's independent registered public accounting firm. On December 23, 2009, to remedy the errors in the June 30, 2009 and September 30, 2009 financial statements, Carbonics Capital filed an amendment to its Quarterly Report on Form 10-Q for the period ended June 30, 2009 and an amendment to its Quarterly Report on Form 10-Q for the period ended September 30, 2009. The amendments contained restated financial statements. The effect of the restatements on the balance sheets and statements of operations as originally reported is demonstrated below:
6/30/09 6/30/09 Balance Sheets: As reported As restate ---------------------------- Accrued interest payable $ 1,238,433 $ 678,979 Notes payable 2,417,451 1,400,000 Convertible debentures 12,623,949 8,819,662 Additional paid-in capital 118,357,712 123,738,904
Three months ended 6/30/08 Six months ended 6/30/08 Statements of Operations: As reported As restated As reported As restated ----------------------------- ------------------------------- Total other income (expense) $ (755,851) $ (2,662,597) $ 621,572 $ (2,806,632) Net income (loss) $ (962,916) $ (2,935,839) $ 227,661 $ (3,228,735) Earnings (loss) per share $ (0.01) $ (0.03) $ -- $ (0.03)
Balance Sheets: 9/30/09 9/30/09 As reported As restated ---------------------------- Accounts payable and accrued expenses $ 1,938,201 $ 2,046,733 Accrued interest payable $ 1,335,771 $ 840,316 Notes payable 2,206,942 1,404,600 Convertible debentures, current 10,948,105 7,948,120 Derivative liabilities 37,673 -- Liability for conversion features on Series D Preferred 91,327 -- Additional paid-in capital 119,586,512 123,849,832 Accumulated deficit (135,407,756) (135,352,826) 12/31/08 12/31/08 As reported As restated ---------------------------- Total liabilities $ 3,456,714 $ 10,210,201 Total equity $ (3,014,781) $ (9,824,069)
Statements of Operations: Three Months Ended 9/30/09 Six Months Ended 9/30/09 As reported As restated As reported As restated --------------------------- ---------------------------- Interest expense $ (258,316) $ (203,386) $ (496,435) $ (441,505) Income (loss) from continuing operations (145,613) (90,683) 3,103,936 3,158,866 Net income (loss) (145,613) (90,683) 3,103,936 3,158,866 Earnings (loss) per share: Continuing operations $ -- $ -- $ 0.02 $ 0.02 Total, basic and diluted $ -- $ -- $ 0.02 $ 0.02
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CARBONICS CAPITAL CORPORATION By: /s/ Paul Miller ---------------------------------- Paul Miller, Chief Executive Officer