UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2014
Commission File Number: 333-139482
Indie Growers Association
(Exact name of registrant as specified in its charter)
| |
Nevada
| 98-0492900
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(State or other jurisdiction of incorporation or organization)
| (IRS Employer Identification Number)
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311 Division St. Carson City, NV 89703
(Address of principal executive offices)(Zip code)
888-648-0488
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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.
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.01 - Completion of Acquisition or Disposition of Assets
On July 2, 2014, Indie Growers Associations (we or the Company) filed a Current Report on Form 8-K announcing that on June 30, 2014 the Company had acquired 100% of the member units of River Ridge Sunshine Farms LLC (RRSF), a Washington state corporation, from RRSFs sole Managing Member, Ricardo Esparza, in exchange for 62,000,000 of the Companys common shares. The Share Exchange Agreement was filed as an exhibit to the Current Report on Form 8-K filed by the Company on July 2, 2014 and is incorporated by reference.
As a result of this transaction, RRSF became a wholly owned subsidiary of the Company. This constitutes the purchase of a business and requires disclosure of audited financial statements of RRSF as well as pro forma financial information giving effect to the acquisition. Therefore, we are amending the Current Report on Form 8-K filed by the Company on July 2, 2014 to provide the required audited financial statements and pro forma financial information.
Item 9.01 - Financial Statements and Exhibits
(a)
Exhibit 99.1 Audited financial statements of RRSF, the acquired business, from inception (April 6, 2014) through June 30, 2014
(b)
Exhibit 99.2 Unaudited pro forma financial information giving effect to the acquisition of RRSF pursuant to the Share Exchange Agreement described under Item 2.01 above, including:
·
Unaudited pro forma consolidated balance sheet as of June 30, 2014;
·
Unaudited pro forma consolidated statement of operations for the three months ended June 30, 2014
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 31, 2015
INDIE GROWERS ASSOCIATION
/s/ Robert Coleridge
Robert Coleridge
President and Principal Financial Officer
- 2 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
August 31, 2015
Board of Directors
Indie Growers Association
Carson City, NV
We have audited the accompanying balance sheet of River Ridge Sunshine Farms LLC, a wholly owned subsidiary of Indie Growers Association (the Company), as of June 30, 2014 and the related statements of operations, stockholders equity, and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the River Ridge Sunshine Farms LLC on June 30, 2014 and the results of their operations and their cash flows for the period then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of the period ending June 30, 2014, the Company has yet to generate any revenue and has suffered losses and negative cash flow from operations. These factors raise doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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/s/ BF Borgers CPA PC
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______________________________
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BF Borgers CPA PC
Lakewood, CO
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- 1 -
RIVER RIDGE SUNSHINE FARMS LLC
BALANCE SHEET
| | |
| | June 30, 2014
|
| | |
ASSETS
| | |
Current Assets
| | |
Cash
| $
| 9,103
|
Advances to tenant
| | 2,000
|
Total current assets
| | 11,103
|
Non-current assets
| | |
Buildings and infrastructure, net
| | 144,485
|
TOTAL ASSETS
| $
| 155,589
|
| | |
LIABILITIES AND STOCKHOLDERS DEFICIENCY
| | |
Current Liabilities
| | |
Accounts payable and accrued liabilities
| $
| 13,639
|
Advances from Indie Growers Association
| | 103,500
|
TOTAL LIABILITIES
| | 117,139
|
COMMITTMENTS AND CONTINGENCIES
| | |
MEMBERS CAPITAL
Amounts received from member
| | 60,648
|
Accumulated deficit
| | (22,198)
|
TOTAL MEMBERS CAPITAL
| | 38,450
|
TOTAL LIABILITIES AND MEMBERS CAPITAL
| $
| 155,589
|
The accompanying notes are an integral part of these financial statements.
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RIVER RIDGE SUNSHINE RIDGE LLC
STATEMENT OF OPERATIONS
| | |
| | From inception
(April 6, 2014) through
June 30, 2014
|
| | |
REVENUE
| $
| -
|
| | |
EXPENSES
| | |
Depreciation
| | 1,196
|
Equipment rental
| | 1,643
|
General and administrative
| | 2,859
|
Office expense
| | 1,357
|
Professional fees
| | 7,000
|
Repairs and maintenance
| | 8,143
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TOTAL OPERATING EXPENSES
| | 22,198
|
NET INCOME (LOSS)
| $
| (22,198)
|
| | |
RIVER RIDGE SUNSHINE FARMS LLC
STATEMENT OF MEMBERS CAPITAL
| | | | | | |
| | Amounts Receivable from Member
| | Accumulated deficit
| | Total
|
Opening Balance (April 6, 2014)
| $
| -
| $
| -
| $
| -
|
Amounts received from member
| | 60,648
| | -
| | 60,648
|
Net loss for the period
| | -
| | (22,198)
| | (22,198)
|
Balance as of June 30, 2014
| $
| 60,648
| $
| (22,198)
| $
| 38,450
|
The accompanying notes are an integral part of these consolidated financial statements.
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RIVER RIDGE SUNSHINE FARMS LLC
STATEMENT OF CASH FLOWS
| | |
| | From inception
(April 6, 2014) through
June 30, 2014
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OPERATING ACTIVITIES
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Net income (loss)
| $
| (22,198)
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Adjustments to reconcile net loss to net cash used in operating activities:
| | |
Depreciation
| | 1,196
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Changes in operating assets and liabilities:
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Accounts payable and accrued liabilities
| | 13,639
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Net cash used in operating activities
| | (7,363)
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INVESTING ACTIVITIES
| | |
Advances to tenant
| | (2,000)
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Buildings and infrastructure
| | (145,681)
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Net cash used in investing activities
| | (147,681)
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FINANCING ACTIVITIES
| | |
Advances from related parties
| | 60,648
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Advances from Indie Growers Association
| | 103,500
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Net cash provided by financing activities
| | 164,148
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Net change in cash
| | 9,103
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CASH, BEGINNING OF PERIOD
| | -
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CASH, END OF PERIOD
| $
| 9,103
|
The accompanying notes are an integral part of these financial statements.
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RIVER RIDGE SUNSHINE FARMS LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2014
1. ORGANIZATION
The company, River Ridge Sunshine Farms LLC, was formed under the laws of the state of Washington on April 6, 2014 to develop real estate for the purpose of leasing land and agricultural buildings to licensed cannabis producers.
On June 30, 2014, the Company was acquired by Indie Growers Association, a Nevada Corporation.
These financial statements are presented on the basis that we will continue as a going concern. The going concern concept contemplates the realization of assets and satisfaction of liabilities in the normal course of business. While the Company is attempting to generate sufficient revenues, the Companys cash position may not be enough to support the Companys daily operations. Management believes that the actions presently being taken to implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect.
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain of the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to the carrying values of unproven mineral properties, expected lives of equipment, determination of fair values of stock based transactions and valuation of deferred income taxes.
Capital Assets
A Capital Asset is defined as a unit of tangible property that: (1) has an economic useful life of more than 12 months; and (2) was acquired or produced for a cost of more than $500, including acquisition and installation costs on the same invoice.
Capital Assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All repairs and maintenance are charged to the statement of operations during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of operations.
Depreciation of capital assets is computed as follows:
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Furniture and fixtures
| 7 year straight line
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Computer equipment
| 5 year straight line
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Buildings and infrastructure
| 30 year straight line
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Leasehold Improvements
| Straight line over the term of lease
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Impairment of Long-lived Assets
The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.
Revenue Recognition
Revenue is recognized when all applicable recognition criteria have been met, which generally include (a) persuasive evidence of an existing arrangement; (b) fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) collectability is reasonably assured.
Fair Value of Financial Instruments
The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, trade payables, and loans approximates their carrying value due to their short-term nature.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.
Recent Accounting Pronouncements
On June 10, 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation, which removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has adopted the amendment as of fiscal year ended March 31, 2015.
There are several new accounting pronouncements issued by the Financial Accounting Standards Board (FASB) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of March 31, 2015, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.
3. ASSET DEPRECIATION
| | | |
June 30, 2014
| Cost
| Accumulated
Depreciation
| Net Book Value
|
Buildings and infrastructure
| $ 145,681
| $ (1,196)
| $ 144,485
|
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
During the period ended June 30, 2014, the company received $60,648 from its member. The advance has no set repayment terms and does not bear interest.
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
AS OF JUNE 30, 2014
Basis of Presentation
The accompanying unaudited pro forma consolidated balance sheet and statements of operations were prepared based on the historical financial information of Indie Growers Associations (the Company) and River Ridge Sunshine Farms LLC (the Subsidiary) giving effect to the acquisition of the Subsidiary by the Company for 62,000,000 shares of the Company on June 30, 2014.
River Ridge Sunshine Farms LLC holds a 10 year lease on a 40 acre property which has been subleased to licensed cannabis producers. In the year ended March 31, 2015 no revenue was generated from the sub leases held by the Subsidiary so Management has determined that the acquisition goodwill should be fully impaired (see Notes (b) and (e) below).
In order to present a consolidated pro forma balance sheet, we have included the unaudited balance sheet of the Company on June 30, 2014 just prior to the acquisition and consolidated it with the audited balance sheet of the Subsidiary on June 30, 2014.
The consolidated pro forma statement of operations only reflects the income and expenses of the Company. The income and expenses of the Subsidiary are carried through as a component of goodwill on the balance sheet of the Company.
The accompanying unaudited pro forma consolidated financial information should be read in conjunction with the audited financial statements and notes of the Subsidiary accompanying this amended Current Report on Form 8-K/A as well as the Companys annual and quarterly reports filed with the Securities and Exchange Commission on Form 10-K/A and Form 10-Q, respectively.
The unaudited pro forma consolidated balance sheet and statement of operations includes pro forma adjustments which reflect transactions and events that are directly attributable to the acquisition and are factually supportable. These pro forma adjustments are described in the accompanying notes.
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INDIE GROWERS ASSOCIATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2014
| | | | | | | | | | | | |
| | Company prior to Acquisition
| | Subsidiary prior to Acquisition
| | Acquisition
Adjustments
| | Notes
| | Consolidated Pro Forma after Acquisition
| | Consolidated Pro Forma after Impairment
|
| | 6/30/14
| | 6/30/14
| | 6/30/14
| | | 6/30/14
| | 6/30/14
|
ASSETS
| | | | | | | | | | | | |
Current Assets
| | | | | | | | | | | | |
Cash
| $
| 201
| $
| 9,103
| $
| -
| | | $
| 9,304
| $
| 9,304
|
Advances to tenant
| | -
| | 2,000
| | -
| | | | 2,000
| | 2,000
|
Total current assets
| | 201
| | 11,103
| | -
| | | | 11,304
| | 11,304
|
Non-current assets
| | | | | | | | | | | | |
Advances to River Ridge Sunshine Farms LLC
| | 103,500
| | -
| | (103,500)
| | (a)
| | -
| | -
|
Buildings and infrastructure, net
| | -
| | 144,485
| | -
| | | | 144,485
| | 144,485
|
Goodwill
| | -
| | -
| | 51,482,198
| | (b)/(e)
| | 51,482,198
| | -
|
Total non-current assets
| | 103,500
| | 144,485
| | -
| | | | 51,626,683
| | 144,485
|
TOTAL ASSETS
| $
| 103,701
| $
| 155,589
| $
| 51,378,698
| | | $
| 51,637,987
| $
| 155,791
|
LIABILITIES AND
STOCKHOLDERS/MEMBERS DEFICIENCY
| | | | | | | | | | | | |
Current Liabilities
| | | | | | | | | | | | |
Accounts payable and accrued liabilities
| $
| 26,439
| $
| 13,639
| $
| -
| | | $
| 40,078
| $
| 40,078
|
Advances from Indie Growers Association
| | -
| | 103,500
| | (103,500)
| | (a)
| | -
| | -
|
Convertible notes payable
| | 317,930
| | -
| | -
| | | | 317,930
| | 317,930
|
Total current liabilities
| | 344,369
| | 117,139
| | $ (103,500)
| | | | 358,008
| | 358,008
|
Long Term Liabilities
| | | | | | | | | | | | |
Deferred vendor incentive, net
| | 5,050
| | -
| | -
| | | | 5,050
| | 5,050
|
Due to related parties
| | -
| | -
| | 60,648
| | (c)
| | 60,648
| | 60,648
|
Total long term liabilities
| | 5,050
| | -
| | 60,648
| | | | 65,698
| | 65,698
|
TOTAL LIABILITIES
| | 349,419
| | 117,139
| | (42,852)
| | | | 423,706
| | 423,706
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STOCKHOLDERS/MEMBERS DEFICIENCY
| | | | | | | | | | | | |
Advances from member
| | -
| | 60,648
| | (60,648)
| | (c)
| | -
| | -
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Common stock
| | 16,382
| | -
| | 62,000
| | (b)
| | 78,382
| | 78,382
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Additional paid-in capital
| | 62,359,481
| | -
| | 51,398,000
| | (b)
| | 113,757,481
| | 113,757,481
|
Accumulated deficit
| | (62,621,581)
| | (22,198)
| | 22,198
| | (b)
| | (62,621,581)
| | (114,103,779)
|
TOTAL DEFICIENCY
| | (245,718)
| | 38,450
| | 51,421,550
| | | | 51,214,282
| | (267,916)
|
TOTAL LIABILITIES AND
STOCKHOLDERS/MEMBERS DEFICIENCY
| $
| 103,701
| $
| 155,589
| $
| 51,378,698
| | | $
| 51,637,987
| $
| 155,791
|
- 2 -
INDIE GROWERS ASSOCIATION
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE 3 MONTHS ENDED JUNE 30, 2014
| | | | | | | | | | |
| | Company prior to Acquisition
| | Subsidiary prior to Acquisition
| | Acquisition
Adjustments
| | Consolidated Pro Forma after Acquisition
| | Consolidated Pro Forma after Impairment
|
| | For the 3 months ended 06/30/14
| | Inception through 06/30/14
| | 6/30/14
| | 6/30/14
| | 6/30/14
|
EXPENSES
| | | | | | | | | | |
Depreciation
| $
| -
| $
| 1,196
| $
| (1,196)
| $
| -
| $
| -
|
Equipment rental
| | -
| | 1,643
| | (1,643)
| | -
| | -
|
Management Fees
| | 31,090,552
| | -
| | -
| | 31,090,552
| | 31,090,552
|
General and administrative
| | 7,410
| | 2,859
| | (2,859)
| | 7,410
| | 7,410
|
Interest
| | 246,240
| | -
| | -
| | 246,240
| | 246,240
|
Office Expense
| | -
| | 1,357
| | (1,357)
| | -
| | -
|
Professional fees
| | 8,365
| | 7,000
| | (7,000)
| | 8,365
| | 8,365
|
Repairs and maintenance
| | -
| | 8,143
| | (8,143)
| | -
| | -
|
TOTAL OPERATING EXPENSES
| | 31,352,746
| | 22,198
| | (22,198)
| | 31,352,746
| | 31,352,746
|
NET LOSS FROM OPERATIONS
| | (31,352,746)
| | (22,198)
| | 22,198
| | (31,352,746)
| | (31,352,746)
|
OTHER EXPENSES
| | | | | | | | | | |
Investment loss
| | ( 156,212)
| | -
| | -
| | ( 156,212)
| | ( 156,212)
|
Impairment of Goodwill
| | -
| | -
| | -
| | -
| | (51,482,198)
|
TOTAL OTHER EXPENSES
| | (156,212)
| | -
| | -
| | (156,212)
| | (51,636,410)
|
NET LOSS
| $
| (31,508,958)
| $
| (22,198)
| $
| 22,198
| $
| (31,508,958)
| $
| (82,991,156)
|
| | | | | | Note (d)
| | | | Note (e)
|
- 3 -
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
JUNE 30, 2014
Balance Sheet
(a)
Elimination of intercompany advances by the Company to the Subsidiary prior to the closing of the acquisition
(b)
The Company acquired the Subsidiary in exchange for 62,000,000 shares. The market value of the Companys shares on the acquisition date was $0.83 per share thereby valuing the shares at $51,460,000. The Net Book Value of the acquired assets and liabilities at June30, 2014 was (22,198) therefore the transaction has been recorded as an acquisition of goodwill as follows:
| | | | |
| Shares
| Par value
| Additional Paid-in Capital
| Total
|
Stock issued
| 62,000,000
| 62,000
| 51,398,000
| 51,460,000
|
Net book value of acquired assets
| -
| -
| -
| 22,198
|
Goodwill
| | | | 51,482,198
|
(c)
To adjust presentation format of Subsidiary to that of the Company by moving Advance from member in Members Deficiency to Due to related parties in Long Term Liabilities
Statement of Operations
(d)
To eliminate expenses and net income of Subsidiary and reflect as a component of goodwill on the Balance Sheet of the Company.
(e)
No revenue was generated from sub leases held by the Subsidiary for the year ended March 31, 2015 so Management has determined that the value of the acquisition should be fully impaired. Therefore, impairment of goodwill has been recorded as of the date of acquisition.
- 4 -