Unrestricted Net Assets

9 Months Ended

Sep. 30, 2012

Unrestricted Net Assets

Unrestricted Net Assets

10.         Unrestricted Net Assets

The Company’s wholly-owned subsidiary, UBIUK, has undistributed losses of $2,622,800 as of September 30, 2012. Under KBEL’s line of credit agreement with RBS, distributions and other payments to MBC from KBEL are not permitted if retained earnings drop below $1,613,200. Condensed financial information of the parent company, MBC, together with its other subsidiary, Releta is as follows:

	September 30, 2012			December 31, 2011
	(unaudited)			(audited)
Assets
Cash	$	124,100		$	187,200
Accounts receivable, net		2,734,000			2,308,400
Inventories		1,694,700			1,799,600
Prepaid expenses		128,600			126,800
Total current assets		4,681,400			4,422,000
Investment in UBIUK		1,225,000			1,225,000
Property and equipment		10,149,000			10,349,000
Intercompany receivable		409,100			231,400
Other assets		706,000			462,500
Total assets	$	17,170,500		$	16,689,900
Liabilities and Stockholders’ Equity
Line of credit	$	1,131,000		$	895,300
Accounts payable		1,555,300			1,511,400
Accrued liabilities		943,500			824,300
Current maturities of debt and leases		461,700			473,100
Total current liabilities		4,091,500			3,704,100
Long-term debt and capital leases		4,094,900			4,280,900
Notes to related parties		3,384,000			3,315,700
Total liabilities	$	11,570,400		$	11,300,700
Stockholders’ equity
Preferred stock		227,600			227,600
Common stock		15,100,300			15,100,300
Accumulated deficit		(9,727,800	)		(9,938,700	)
Total stockholders’ equity		5,600,100			5,389,200
Total liabilities and stockholders’ equity	$	17,170,500		$	16,689,900

Statements of Operations	Three months ended September 30						Nine months ended September 30
	2012			2011			2012			2011
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	4,247,700		$	4,385,800		$	12,816,800		$	12,349,900
Cost of goods sold		3,252,000			3,141,300			9,609,700			8,927,900
Sales, marketing, and retail expenses		433,400			440,300			1,305,500			1,202,700
General and administrative expenses		549,300			475,300			1,517,900			1,457,700
Income from operations		13,000			328,900			383,700			761,600
Other (income)		(35,100	)		(40,200	)		(112,700	)		(110,500	)
Interest expense		94,700			90,400			283,800			289,300
Provision for taxes		900			—			1,700			7,100
Net income (loss)	$	(47,500	)	$	278,700		$	210,900		$	575,700

Statements of Cash Flows	Nine months ended September 30
	2012			2011
	(unaudited)			(unaudited)
Cash flows from operating activities	$	295,000		$	693,600
Purchase of property and equipment		(223,700	)		(316,700	)
Proceed from sale of assets		5,000			—
Net borrowing (repayment) on line of credit		235,700			(1,391,700	)
Borrowing on long term debt		184,700			4,881,000
Repayment on long term debt		(344,300	)		(3,588,300	)
Payment on obligation under capital lease		(37,800	)		(35,200	)
Net change in payable to UBIUK		(177,700	)		(188,000	)
(Decrease) increase in cash		(63,100	)		54,700
Cash, beginning of period		187,200			64,900
Cash, end of period	$	124,100		$	119,600