Unrestricted Net Assets

3 Months Ended

Mar. 31, 2016

Unrestricted Net Assets

Unrestricted Net Assets

14. Unrestricted Net Assets

The Company’s wholly-owned subsidiary, UBIUK, had undistributed losses of $361,800 as of March 31, 2016. 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 $1,431,000. Condensed financial information of MBC, together with its other subsidiary, Releta is as follows:

Balance Sheets

	March 31, 2016			December 31, 2015
	(unaudited)
Balance Sheets
Assets
Cash and cash equivalents	$	50,300		$	61,300
Accounts receivable, net		1,117,100			1,121,300
Inventories		1,375,000			1,490,100
Other current assets		104,900			199,800
Total current assets		2,647,300			2,872,500
Investment in subsidiary		1,225,000			1,225,000
Property and equipment		9,220,100			9,378,500
Intercompany receivable		272,600			284,000
Other assets		295,400			175,800
Total assets	$	13,660,400		$	13,935,800
Liabilities
Line of credit	$	120,700		$	453,100
Accounts payable		2,692,200			2,640,400
Accrued liabilities		1,293,800			1,021,000
Note payable to related party		2,545,300			2,119,600
Subordinated convertible notes to related party		3,704,000			3,680,100
Current maturities of debt, leases and severance		3,496,600			3,505,900
Total current liabilities		13,852,600			13,420,100
Long-term capital  leases		12,600			14,000
Severance payable		569,700			678,400
Total liabilities		14,434,900			14,112,500
Stockholders’ deficit
Common stock		15,100,300			15,100,300
Preferred stock		227,600			227,600
Accumulated deficit		(16,102,400	)		(15,504,600	)
Total stockholders’ deficit		(774,500	)		(176,700	)
Total liabilities and stockholders’ deficit	$	13,660,400		$	13,935,800

Statements of Operations
	Quarter ended March 31
	2016			2015
	(unaudited)			(unaudited)
Net sales	$	2,592,300		$	2,373,700
Cost of goods sold		2,225,100			2,122,600
Selling, marketing, and retail expenses		291,500			353,400
General and administrative expenses		559,500			480,100
Loss from operations		(483,800	)		(582,400	)
Other (income)		(3,700	)		(3,100	)
Interest expense		117,700			123,000
Provision for taxes		-			3,800
Net loss	$	(597,800	)	$	(706,100	)

Statements of Cash Flows
	Quarter ended March 31
	2016			2015
	(unaudited)			(unaudited)
Cash flows from operating activities	$	45,100		$	(269,200	)
Purchase of property and equipment		-			-
Net borrowing (repayment) on line of credit		(332,400	)		(90,200	)
Borrowing on note payable		400,000			500,000
Repayment on long term debt		(133,700	)		(133,700	)
Payment on obligation under capital lease		(1,400	)		(1,300	)
Net change in payable to UBIUK		11,400			(30,800	)
Decrease in cash		(11,000	)		(25,200	)
Cash, beginning of period		61,300			61,500
Cash, end of period	$	50,300		$	36,300