Unrestricted Net Assets

3 Months Ended

Mar. 31, 2015

Unrestricted Net Assets

Unrestricted Net Assets

14. Unrestricted Net Assets

The Company’s wholly-owned subsidiary, UBIUK, had undistributed losses of $665,200 as of March 31, 2015. 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 $1,485,000. Condensed financial information of MBC, together with its other subsidiary, Releta is as follows:

Balance Sheets

Balance Sheets	March 31, 2015			December 31, 2014
	(unaudited)
Assets
Cash and cash equivalents	$	36,300		$	61,500
Accounts receivable, net		1,435,000			1,365,000
Inventories		1,702,300			2,047,700
Other current assets		92,700			173,600
Total current assets		3,266,300			3,647,800
Investment in subsidiary		1,225,000			1,225,000
Property and equipment		9,747,000			9,904,500
Intercompany receivable		452,700			421,900
Other assets		385,000			310,400
Total assets	$	15,076,000		$	15,509,600
Liabilities
Line of credit	$	1,102,700		$	1,192,900
Accounts payable		2,681,100			2,620,000
Accrued liabilities		930,100			1,031,300
Note payable related party		1,554,000			1,038,700
Current maturities of debt, leases and severance		3,899,200			3,918,900
Total current liabilities		10,167,100			9,801,800
Long-term capital leases		10,800			12,100
Subordinated convertible notes payable		3,611,400			3,588,900
Severance payable		646,100			760,100
Total liabilities		14,435,400			14,162,900
Stockholders’ equity
Common stock		15,100,300			15,100,300
Preferred stock		227,600			227,600
Accumulated deficit		(14,687,300	)		(13,981,200	)
Total stockholders’ equity		640,600			1,346,700
Total liabilities and stockholders’ equity	$	15,076,000		$	15,509,600

Statements of Operations	Quarter ended March 31,
	2015			2014
	(unaudited)			(unaudited)
Net sales	$	2,373,700		$	2,734,900
Cost of goods sold		2,122,600			2,358,400
Selling, marketing, and retail expenses		353,400			365,300
General and administrative expenses		480,100			503,400
Loss from operations		(582,400	)		(492,200	)
Other (income) and expense		(3,100	)		(1,900	)
Interest expense		123,000			125,700
Provision for taxes		3,800			-
Net loss	$	(706,100	)	$	(616,000	)

Statements of Cash Flows	Quarter ended March 31,
	2015			2014
	(unaudited)			(unaudited)
Cash flows from operating activities	$	(269,200	)	$	(482,000	)
Purchase of property and equipment		-			(50,400	)
Net borrowing (repayment) on line of credit		(90,200	)		3,700
Borrowing on long term debt		-			-
Borrowing on note payable		500,000			500,000
Repayment on long term debt		(133,700	)		(133,700	)
Payment on obligation under capital lease		(1,300	)		(1,300	)
Net change in payable to UBIUK		(30,800	)		94,100
Decrease in cash		(25,200	)		(69,600	)
Cash, beginning of period		61,500			113,700
Cash, end of period	$	36,300		$	44,100