Unrestricted Net Assets

12 Months Ended

Dec. 31, 2012

Unrestricted Net Assets

Unrestricted Net Assets

15.     Unrestricted Net Assets

The Company’s wholly-owned subsidiary, UBIUK, has cumulative losses of approximately £1,428,000 ($2,322,200) as of December 31, 2012. Under KBEL’s line of credit agreement with RBS, distributions and other payments to the Company from its subsidiary are not permitted if the subsidiary’s retained earnings drop below £1,000,000 ($1,626,200). Condensed financial information of the United States operations is as follows:

Balance Sheets	2012			2011
Assets
Cash and cash equivalents	$	123,200		$	187,200
Accounts receivable, net		2,531,700			2,308,400
Inventories		1,910,500			1,799,600
Other current assets		111,900			126,800
Total current assets		4,677,300			4,422,000
Investment in subsidiary		1,225,000			1,225,000
Property and equipment		10,864,600			10,349,000
Intercompany receivable		471,400			231,400
Other assets		268,800			462,500
Total assets	$	17,507,100		$	16,689,900
Liabilities
Line of credit	$	1,887,700		$	895,300
Accounts payable		1,584,300			1,511,400
Accrued liabilities		884,300			824,300
Current maturities of debt and capital leases		453,100			473,100
Total current liabilities		4,809,400			3,704,100
Long-term debt and capital leases		3,982,400			4,280,900
Notes to related parties		3,407,000			3,315,700
Total liabilities		12,198,800			11,300,700
Stockholders’ equity
Common stock		15,100,300			15,100,300
Preferred stock		227,600			227,600
Accumulated deficit		(10,019,600	)		(9,938,700	)
Total stockholders’ equity		5,308,300			5,389,200
Total liabilities and stockholders’ equity	$	17,507,100		$	16,689,900

Statement of Operations	2012			2011
Net sales	$	16,228,300		$	16,138,400
Cost of goods sold		12,383,900			12,037,300
Selling, marketing, and retail expenses		1,754,500			1,698,400
General and administrative expenses		1,984,600			1,912,100
Income from operations		105,300			490,600
Other income and (expense)
Interest expenses		(380,000	)		(382,200	)
Other income		196,500			158,700
Provision for taxes		(2,700	)		(7,100	)
		(186,200	)		(230,600	)
Net income (loss)	$	(80,900	)	$	260,000

Statements of Cash Flows	2012			2011
Cash flows from operating activities	$	583,700		$	464,800
Cash used in investing activities
Purchase of property and equipment		(1,086,600	)		(506,800	)
Proceeds from sale of equipment		5,000			-
Net cash flows used in investing		(1,081,600	)		(506,800	)
Cash flow from financing activities
Net borrowings (repayments) on line of credit		992,400			(725,900	)
Borrowings on long term debt		184,700			4,881,000
Repayment of long-term debt		(456,800	)		(3,694,200	)
Payment on obligations under capital leases		(46,400	)		(47,300	)
Net change in intercompany payable		(240,000	)		(249,300	)
Net cash flows from financing activities		433,900			164,300
Cash, beginning of year		187,200			64,900
Cash, end of year	$	123,200		$	187,200