Unrestricted Net Assets

6 Months Ended

Jun. 30, 2014

Unrestricted Net Assets

Unrestricted Net Assets

13. Unrestricted Net Assets

Our wholly-owned subsidiary, UBIUK, has undistributed losses of $1,378,800 as of June 30, 2014. 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 $1,710,500. Condensed financial information of MBC together with its other subsidiary, Releta is as follows:

	June 30, 2014			December 31, 2013
	(unaudited)
Balance Sheets
Assets
Cash and cash equivalents	$	56,300		$	113,700
Accounts receivable, net		1,985,200			1,512,300
Inventories		1,930,100			2,217,300
Other current assets		286,000			165,500
Total current assets		4,257,600			4,008,800
Investment in subsidiary		1,225,000			1,225,000
Property and equipment		10,199,900			10,519,200
Intercompany receivable		588,000			716,700
Other assets		292,100			324,500
Total assets	$	16,562,600		$	16,794,200
Liabilities
Line of credit	$	1,496,700		$	1,517,200
Accounts payable		2,365,500			2,524,500
Accrued liabilities		1,118,900			1,001,700
Note payable related party		1,014,800			-
Current maturities of debt and capital leases		4,185,900			4,453,300
Total current liabilities		10,181,800			9,496,700
Long-term capital leases		15,100			17,700
Subordinated convertible notes payable		3,543,100			3,497,900
Total liabilities		13,740,000			13,012,300
Stockholders’ equity
Common stock		15,100,300			15,100,300
Preferred stock		227,600			227,600
Accumulated deficit		(12,505,300	)		(11,546,000	)
Total stockholders’ equity		2,822,600			3,781,900
Total liabilities and stockholders’ equity	$	16,562,600		$	16,794,200

	Three months ended June 30						Six months ended June 30
	2014			2013			2014			2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Statements of Operations
Net sales	$	3,244,600		$	3,790,300		$	5,979,500		$	7,374,700
Cost of goods sold		(2,699,900	)		(3,061,800	)		(5,058,300	)		(5,844,400	)
Sales, marketing, and retail expenses		(341,100	)		(430,200	)		(706,400	)		(814,600	)
General and administrative expenses		(424,800	)		(485,400	)		(928,200	)		(1,024,100	)
Loss from operations		(221,200	)		(187,100	)		(713,400	)		(308,400	)
Other income		8,800			39,800			10,700			74,400
Interest expense		(130,900	)		(102,200	)		(256,600	)		(200,400	)
Provision for taxes		-			-			-			(5,000	)
Net loss	$	(343,300	)	$	(249,500	)	$	(959,300	)	$	(439,400	)

	Six months ended June 30
		2014			2013
		(unaudited)			(unaudited)
Statements of Cash Flows
Cash flows from operating activities		$	(837,900	)	$	27,200
Purchase of property and equipment			(57,700	)		(283,000	)
Proceeds from sale of assets			-			-
Net borrowing (repayment) on line of credit			(20,500	)		75,700
Borrowing on note payable			1,000,000
Borrowing on long term debt			-			539,700
Repayment on long term debt			(267,400	)		(256,800	)
Payment on obligation under capital lease			(2,600	)		(3,100	)
Net change in payable to UBI			128,700			(128,000	)
Decrease in cash			(57,400	)		(28,300	)
Cash, beginning of period			113,700			123,200
Cash, end of period		$	56,300		$	94,900