Unrestricted Net Assets

6 Months Ended

Jun. 30, 2013

Unrestricted Net Assets

Unrestricted Net Assets

10. Unrestricted Net Assets

Our wholly-owned subsidiary, UBIUK, has undistributed losses of $2,155,900 as of June 30, 2013. 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 $1,521,000. Condensed financial information of MBC together with its other subsidiary, Releta is as follows:

	June 30, 2013			December 31, 2012
	(unaudited)
Assets
Cash	$	94,900		$	123,200
Accounts receivable, net		2,508,800			2,531,700
Inventories		1,887,400			1,910,500
Prepaid expenses		291,000			111,900
Total current assets		4,782,100			4,677,300
Investment in UBIUK		1,225,000			1,225,000
Property and equipment		10,846,900			10,864,600
Intercompany receivable		599,400			471,400
Other assets		310,700			268,800
Total assets	$	17,764,100		$	17,507,100
Liabilities and Stockholders’ Equity
Line of credit	$	1,963,400		$	1,887,700
Accounts payable		1,759,400			1,584,300
Accrued liabilities		1,005,000			884,300
Current maturities of debts and lease		4,715,300			453,100
Total current liabilities		9,443,100			4,809,400
Long-term debts and capital lease		-			3,982,400
Notes to related parties		3,452,100			3,407,000
Total liabilities	$	12,895,200		$	12,198,800
Stockholders’ equity
Preferred stock		227,600			227,600
Common stock		15,100,300			15,100,300
Accumulated deficit		(10,459,000	)		(10,019,600	)
Total stockholders’ equity		4,868,900			5,308,300
Total liabilities and stockholders’ equity	$	17,764,100		$	17,507,100

Statements of Operations	Three months ended June 30						Six months ended June 30
	2013			2012			2013			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	3,790,300		$	4,627,500		$	7,374,700		$	8,569,100
Cost of goods sold		(3,061,800	)		(3,419,100	)		(5,844,400	)		(6,357,700	)
Sales, marketing, and retail expenses		(430,200	)		(443,500	)		(814,600	)		(872,100	)
General and administrative expenses		(485,400	)		(462,300	)		(1,024,100	)		(968,600	)
Income (loss) from operations		(187,100	)		302,600			(308,400	)		370,700
Other income		39,800			42,900			74,400			77,600
Interest expense		(102,200	)		(92,300	)		(200,400	)		(189,100	)
Provision for taxes		--			--			(5,000	)		(800	)
Net income (loss)	$	(249,500	)	$	253,200		$	(439,400	)	$	258,400

Statements of Cash Flows	Six months ended June 30
	2013			2012
	(unaudited)			(unaudited)
Cash flows from operating activities	$	27,200		$	227,300
Purchase of property and equipment		(283,000	)		(84,500	)
Proceed from sale of assets		-			5,000
Net borrowing (repayment) on line of credit		75,700			(46,300	)
Borrowing on long term debt		539,700			184,700
Repayment on long term debt		(256,800	)		(211,800	)
Payment on obligation under capital lease		(3,100	)		(25,000	)
Net change in payable to UBI		(128,000	)		(117,100	)
Decrease in cash		(28,300	)		(67,700	)
Cash, beginning of period		123,200			187,200
Cash, end of period	$	94,900		$	119,500