NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with both generally accepted accounting principles for interim financial
information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited
condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the
opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results
are not necessarily indicative of results for a full year.
The unaudited condensed consolidated financial
statements and related disclosures have been prepared with the presumption that users of the interim financial information have
read or have access to the Company’s annual audited consolidated financial statements for the preceding fiscal year. Accordingly,
these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial
statements and the related notes for the years ended December 31, 2014 and 2013 thereto contained in the Annual Report on Form
10-K for the year ended December 31, 2014.
Organization and Nature of Operations
Legacy Card Company (“Legacy”)
was formed as a Limited Liability Company on August 29, 2001. On April 18, 2005, Legacy converted from a California Limited Liability
Company to a Nevada Corporation. On November 10, 2005, Legacy merged with Cardiff International, Inc. (“Cardiff”, the
“Company”), a publicly held corporation. In the first quarter of 2013, it was decided to restructure Cardiff into a
holding company that adopted a new business model known as "Collaborative Governance," a form of governance enabling
businesses to take advantage of the power of a public company. Cardiff began targeting the acquisition of undervalued, niche companies
with high growth potential, income-producing commercial real estate properties, and high return investments, all designed to pay
a dividend to the Company’s shareholders. The reason for this strategy was to protect the Company’s shareholders by
acquiring profitable small- to minimum-sized businesses with little to no debt, seeking support with both financing and management
that had the ability to offer a return to investors. The plan is to establish new classes of preferred stock to streamline voting
rights, negate debt, and acquire new businesses. By December of 2013, the Company had negated more than 90% of all its debt; by
July of 2014, the Company had completed the acquisition of three businesses: We Three, LLC; Romeo’s NY Pizza; and Edge View
Properties, Inc. The Company delayed the filing of its Annual Report on Form 10-K (“Form 10-K”) for the year ended
December 31, 2014 due to difficulty obtaining information from another acquisition, which was subsequently unwound.
Description of Business
Cardiff is a holding company that adopted a
new business model known as "Collaborative Governance.” To date, the Company is not aware of any other domestic holding
company using the same business philosophy or governing policies. The Company’s business footprint is to acquire strong companies
that meet the following criteria: (1) in business for a minimum of two years; (2) profitable; (3) good management team; (4) little
to no debt; and (5) assets of a minimum of $1,000,000. Cardiff continues to practice all business ethics under the Securities Exchange
Act of 1934
(“1934 Act”) and acknowledges that there are more than 43 successful
Business Development Companies subject to the Investment Company Act of 1940 (“1940 Act”), all of which may be considered
competition to Cardiff and that are established and available to the public for investment. These companies offer experienced management,
dividends and financial security.
To date, Cardiff consists of three subsidiaries:
We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc.
Going Concern
The accompanying consolidated financial statements
have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets
and liabilities and commitments in the normal course of business. The Company is in the development stage and, as such, has sustained
operating losses since its inception and has negative working capital and an accumulated deficit. These factors raise substantial
doubts about the Company’s ability to continue as a going concern. As of March 31, 2015, the Company had shareholders’
deficit of $175,688. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability
and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company
is unable to continue as a going concern. As a result, the Company’s independent registered public accounting firm, in its
report on the Company’s December 31, 2014 consolidated financial statements, has raised substantial doubt about the Company’s
ability to continue as a going concern.
The ability of the Company to continue as a
going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions.
Management has prospective investors and believes the raising of capital will allow the Company to pursue new acquisitions. There
can be no assurance that the Company will be able to obtain sufficient capital from debt or equity transactions or from operations
in the necessary time frame or on terms acceptable to it. Should the Company be unable to raise sufficient funds, it may be required
to curtail its operating plans. In addition, increases in expenses may require cost reductions. No assurance can be given that
the Company will be able to operate profitably on a consistent basis, or at all, in the future. Should the Company not be able
to raise sufficient funds, it may cause cessation of operations.
Recently Issued Accounting Pronouncements
The Company has reviewed all recently issued,
but not yet effective, accounting pronouncements up to ASU 2016-13, and does not believe the future adoption of any such pronouncements
may be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations.
2. PLANT AND EQUIPMENT, NET
Plant and equipment, net as of March 31, 2015
and December 31, 2014 was $549,130 and $534,212, respectively, consisting of the following:
|
|
March 31, 2015
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Furniture, fixture and equipment
|
|
$
|
277,263
|
|
|
$
|
268,055
|
|
Leasehold improvements
|
|
|
581,519
|
|
|
|
545,830
|
|
|
|
$
|
858,782
|
|
|
$
|
813,885
|
|
Less: accumulated depreciation
|
|
|
(309,652
|
)
|
|
|
(279,673
|
)
|
Plant and equipment, net
|
|
$
|
549,130
|
|
|
$
|
534,212
|
|
During the three months ended March 31, 2015
and 2014, depreciation expense was $29,979 and $0, respectively.
3. ACCRUED EXPENSES
As of March 31, 2015 and December 31, 2014,
the Company had accrued expenses of $811,046 and $626,330, respectively, consisted of the following:
|
|
March 31, 2015
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Accrued salaries
|
|
$
|
510,000
|
|
|
$
|
450,000
|
|
Accrued expenses - other
|
|
|
301,046
|
|
|
|
176,330
|
|
Total
|
|
$
|
811,046
|
|
|
$
|
626,330
|
|
4. RELATED PARTY TRANSACTIONS
Due to Officers and Officer Compensation
The Company borrows funds from Daniel Thompson,
who is a Shareholder and Officer of the Company. The terms of repayment stipulate the loans are due 24 months after the launch
of the Legacy Tuition Card (or prior to such date) at an annual interest rate of six percent. As of March 31, 2015, the Company
had $86,305 due to Daniel Thompson.
In addition, the Company has an employment
agreement, renewed May 15, 2014, with Daniel Thompson whereby the Company changed Daniel Thompson’s compensation to $20,000
per month from $25,000. Accordingly, a total salary of $60,000 and $75,000 were accrued and reflected as an expense to Daniel Thompson
during the three months ended March 31, 2015 and 2014, respectively. The accrued salaries payable to Daniel Thompson was $322,500
as of March 31, 2015.
The Company has an employment agreement with
a former President, Ms. Roberton, whereby the Company provides for compensation of $25,000 per month beginning May 15, 2014. A
total salary of $187,500 was reflected as an expense during the year ended December 31, 2014. The total balance due to Ms. Roberton
for accrued salaries at March 31, 2015 and December 31, 2014 was $187,500 and $0, respectively.
The Company had an employment agreement with
a former Chief Operating Officer, Mr. Levy, whereby the Company provided for compensation of $15,000 per month. A total salary
of $45,000 was accrued and reflected as an expense during the three months ended March 31, 2015. The total balance due to Mr. Levy
for accrued salaries at March 31, 2015 was $45,000.
The Company had an employment agreement with
the Chief Executive Officer, Mr. Cunningham, whereby the Company provided for compensation of $15,000 per month. A total salary
of $45,000 was accrued and reflected as an expense during the three months ended March 31, 2015. The total balance due to Mr. Cunningham
for accrued salaries at March 31, 2015 was $45,000.
Notes Payable – Related Party
The Company has entered into several loan agreements
with related parties (see above; Note 5, Notes Payable – Related Party; and Note 6, Convertible Notes Payable – Related
Party).
5. NOTES PAYABLE
Notes payable at March 31, 2015 and December
31, 2014 are summarized as follows:
|
|
March 31, 2015
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Notes Payable – Unrelated Party
|
|
$
|
67,545
|
|
|
$
|
129,032
|
|
Notes Payable – Related Party
|
|
|
100,000
|
|
|
|
100,000
|
|
Discount on notes
|
|
|
–
|
|
|
|
–
|
|
Total
|
|
$
|
167,545
|
|
|
$
|
229,032
|
|
Current portion
|
|
|
(67,545
|
)
|
|
|
(129,032
|
)
|
Long-term portion
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
Notes Payable – Unrelated Party
On March 12, 2009, the Company entered into
a preferred debenture agreement with a shareholder for $20,000. The note bore interest at 12% per year and matured on September
12, 2009. In conjunction with the preferred debenture, the Company issued 2,000,000 warrants to purchase its Common Stock, exercisable
at $0.10 per share and expired on March 12, 2014. As a result of the warrants issued, the Company recorded a $20,000 debt discount
during 2009 which has been fully amortized. The Company assigned all of its receivables from consumer activations of the rewards
program as collateral on this debenture. On March 24, 2011, the Company amended the note and the principal balance was reduced
to $15,000. The Company was due to pay annual principal payments of $5,000 plus accrued interest beginning March 12, 2012. On July
20, 2011, the Company repaid $5,000 of the note. As of December 31, 2012, the warrants had not been exercised. As of March 31,
2015, the Company is in default on this debenture. The balance of the note was $10,989 and $10,989 at March 31, 2015 and December
31, 2014, respectively.
The balance of $56,556 in notes payable to
unrelated party was due to the auto loan for the vehicles used in the Pizza restaurants.
Notes Payable – Related Party
On September 7, 2011, the Company entered into
a Promissory Note agreement (“Note 1”) with a related party for $50,000. Note 1 bears interest at 8% per year and matures
on September 7, 2016. Interest is payable annually on the anniversary of Note 1, and the principal and any unpaid interest will
be due upon maturity. In conjunction with Note 1, the Company issued 2,500,000 shares of its Common Stock to the lender. As a result
of the shares issued in conjunction with Note 1, the Company recorded a $50,000 debt discount during 2011. The balance of Note
1, net of debt discount, was $50,000 and $50,000 at March 31, 2015 and December 31, 2014, respectively.
On November 17, 2011, the Company entered into
a Promissory Note agreement (“Note 2”) with a related party for $50,000. Note 2 bears interest at 8% per year and matures
on November 17, 2016. Interest is payable annually on the anniversary of Note 2, and the principal and any unpaid interest will
be due upon maturity. In conjunction with Note 2, the Company issued 2,500,000 shares of its Common Stock to the lender. As a result
of the shares issued in conjunction with Note 2, the Company recorded a $50,000 debt discount during 2011. The balance of Note
2, net of debt discount, was $50,000 and $50,000 at March 31, 2015 and December 31, 2014, respectively.
The following is a schedule showing the future
minimum loan payments in the future 5 years.
Year ending December 31,
|
|
|
|
|
2015
|
|
$
|
67,545
|
|
2016
|
|
|
100,000
|
|
2017
|
|
|
0
|
|
2018
|
|
|
0
|
|
2019
|
|
|
0
|
|
Total
|
|
$
|
167,545
|
|
6. CONVERTIBLE NOTES PAYABLE
Some of the Convertible Notes issued as described
below included an anti-dilution provision that allowed for the adjustment of the conversion price. The Company considered the guidance
provided by the FASB in “
Determining Whether an Instrument Indexed to an Entity’s Own Stock
,” the result
of which indicates that the instrument is not indexed to the issuer’s own stock. Accordingly, the Company determined that,
as the conversion price of the Notes issued in connection therewith could fluctuate based future events, such prices were not fixed
amounts. As a result, the Company determined that the conversion features of the Notes issued in connection therewith are not considered
indexed to the Company’s stock and characterized the value of the conversion feature of such notes as derivative liabilities
upon issuance.
Convertible notes at March 31, 2015 and December 31, 2014 are summarized
as follows:
|
|
March 31, 2015
|
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Convertible Notes Payable – Unrelated Party
|
|
$
|
9,000
|
|
|
$
|
9,000
|
|
Convertible Notes Payable – Related Party
|
|
|
165,000
|
|
|
|
165,000
|
|
Discount on notes
|
|
|
–
|
|
|
|
–
|
|
Total - Current
|
|
$
|
174,000
|
|
|
$
|
174,000
|
|
Convertible Notes Payable – Unrelated Party
On April 17, 2014, the Company entered into
an unsecured Convertible Note (“Note 3”) in the amount of $9,000. Note 3 was convertible into Common Shares of the
Company at $0.005 per share at the option of the holder. Note 3 bore interest at eight percent per year, matured on June 17, 2014,
and was unsecured. All principal and unpaid accrued interest was due at maturity. As of March 31, 2015, the Company is in default
on Note 3. The balance of the note was $9,000 and $9,000 at March 31, 2015 and December 31, 2014, respectively.
Convertible Notes Payable – Related Party
On April 21, 2008, the Company entered into
an unsecured Convertible Debenture (“Debenture 1”) with a shareholder in the amount of $150,000. Debenture 1 was convertible
into Common Shares of the Company at $0.03 per share at the option of the holder no earlier than August 21, 2008. Debenture 1 bore
interest at 12% per year, matured in August 2009, and was unsecured. All principal and unpaid accrued interest was due at maturity.
In conjunction with the Debenture 1, the Company also issued warrants to purchase 5,000,000 shares of the Company’s Common
Stock at $0.03 per share. The warrants expired on April 20, 2013. As a result of issued warrants, the Company recorded a $150,000
debt discount during 2008 which has been fully amortized. The Company is in default on Debenture 1, and the warrants have not been
exercised. The balance of Debenture 1 was $150,000 and $150,000 at March 31, 2015 and December 31, 2014, respectively.
On March 11, 2009, the Company entered into
an unsecured Convertible Debenture (“Debenture 2”) with a shareholder in the amount of $15,000. Debenture 2 was convertible
into Common Shares of the Company at $0.03 per share at the option of the holder. Debenture 2 bore interest at 12% per year, matured
on March 11, 2014, and was unsecured. All principal and unpaid accrued interest was due at maturity. The balance of Debenture 2
was $15,000 and $15,000 at March 31, 2015 and December 31, 2014, respectively.
The following is a schedule showing the future
minimum loan payments in the future 5 years.
Year ending December 31,
|
|
|
|
|
2015
|
|
$
|
174,000
|
|
2016
|
|
|
0
|
|
2017
|
|
|
0
|
|
2018
|
|
|
0
|
|
2019
|
|
|
0
|
|
Total
|
|
$
|
174,000
|
|
7. PAYROLL TAXES
The Company previously reported that it has
failed to remit payroll tax payments since 2006, as required by various taxing authorities. Payroll taxes and estimated penalties
were accrued in recognition of accrued salaries subsequently settled via stock issue and other agreements that did not result in
reportable or taxable payroll transactions. These accruals were reversed for prior years, and a similar estimated accrual established
for 2014. As of March 31, 2015 and December 31, 2014, the Company estimated the amount of taxes, interest, and penalties that the
Company could incur as a result of payroll related taxes and penalties to be $39,530 and $38,400, respectively.
8. NET LOSS PER SHARE
Basic net loss per share is computed using
the weighted average number of common shares outstanding during the periods. There were no dilutive earnings per share
for the three months ended March 31, 2015 and 2014 due to net loss during the periods.
The following table sets forth the computation
of basic net loss per share for the periods indicated:
|
|
For the three months ended
|
|
|
|
March 31, 2015
|
|
|
March 31, 2014
|
|
Numerator:
|
|
|
|
|
|
|
|
|
- Net loss
|
|
$
|
(124,491
|
)
|
|
$
|
(107,786
|
)
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
- Weighted average common shares outstanding
|
|
|
4,952,159
|
|
|
|
89,306
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
|
|
$
|
(0.03
|
)
|
|
$
|
(1.21
|
)
|
9. CAPITAL STOCK
During the three months ended March 31, 2015,
383,479 shares of Series “B” Preferred Stock were converted into 1,529,726 shares of Common Stock of the Company per
the preferred shareholder’s instruction.
During the three months ended March 31, 2015,
the Company issued 33,197 shares of Series “B” Preferred stock and 4 shares of Series “C” Preferred Stock
to several investors for total cash payment of $82,500 pursuant to the executed subscription agreements.
During the three months ended March 31, 2015,
the Company issued 6,249 shares of Series “F-1” Preferred stock and 1 share of Series “C” Preferred Stock
to an investor for total cash payment of $25,000 pursuant to the executed subscription agreement.
10. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company had operating leases of $65,703
for the three months ended March 31, 2015, consisting of the followings. There was no rent expense for the three months ended March
31, 2014 as such office space was contributed at no cost by Daniel Thompson, the imputed effects of which are immaterial to the
consolidated financial statements taken as a whole.
|
|
For the three months ended
|
|
|
|
March 31, 2015
|
|
|
March 31, 2014
|
|
|
|
|
|
|
|
|
Restaurants
|
|
$
|
43,777
|
|
|
$
|
–
|
|
Lot
|
|
|
13,081
|
|
|
|
–
|
|
Office
|
|
|
7,300
|
|
|
|
–
|
|
Equipment Rentals
|
|
|
1,545
|
|
|
|
–
|
|
Total
|
|
$
|
65,703
|
|
|
$
|
–
|
|
11. SEGMENT REPORTING
The Company has two reportable operating segments
as determined by management using the “management approach” as defined by the authoritative guidance on
Disclosures
about Segments of an Enterprise and Related Information
: (1) Mobile home lease (We Three), and (2) Company-owned
Pizza Restaurants (Romeo’s NY Pizza). These segments are a result of differences in the nature of the products
and services sold. Corporate administration costs, which include, but are not limited to, general accounting, human resources,
legal and credit and collections, are partially allocated to the two operating segments. Other revenue consists of nonrecurring
items.
The mobile home lease segment establishes mobile
home business as an option for a homeowner wishing to avoid large down payments, expensive maintenance costs, monthly mortgage
payments and high property taxes. If bad credit is an issue preventing people from purchasing a traditional house, the Company
will provide a financial leasing option with "0" interest on the lease providing a "lease to own" option for
their family home.
The Company-owned Pizza Restaurant segment
includes sales and operating results for all Company-owned restaurants. Assets for this segment include equipment, furniture
and fixtures for the Company-owned restaurants.
Corporate administration and other assets primarily
include the deferred tax asset, cash and short-term investments, as well as furniture and fixtures located at the corporate office
and trademarks and other intangible assets. All assets are located within the United States.
Summarized in the following tables are net
sales and operating revenues, depreciation and amortization expense, income from continuing operations before taxes, capital expenditures
and assets for the Company's reportable segments as of and for the three months ended March 31, 2015:
|
|
March 31, 2015
|
|
Revenues:
|
|
|
|
|
We Three
|
|
$
|
41,748
|
|
Romeo’s NY Pizza
|
|
|
377,120
|
|
Others
|
|
|
10,945
|
|
Consolidated revenues
|
|
$
|
429,813
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
We Three
|
|
$
|
28,993
|
|
Romeo’s NY Pizza
|
|
|
272,406
|
|
Others
|
|
|
0
|
|
Consolidated depreciation
|
|
$
|
301,399
|
|
|
|
|
|
|
Income (Loss) before taxes
|
|
|
|
|
We Three
|
|
$
|
9,286
|
|
Romeo’s NY Pizza
|
|
|
68,158
|
|
Others
|
|
|
(201,935
|
)
|
Consolidated loss before taxes
|
|
$
|
(124,491
|
)
|
|
|
|
|
|
Assets:
|
|
|
|
|
We Three
|
|
$
|
203,704
|
|
Romeo’s NY Pizza
|
|
|
153,923
|
|
Others
|
|
|
940,685
|
|
Combined assets
|
|
$
|
1,298,312
|
|
12. SUBSEQUENT EVENTS
In accordance with ASC Topic 855-10, the Company
has analyzed its operations subsequent to March 31, 2015 to the date these consolidated financial statements were issued, and has
determined that it does not have any material subsequent events to disclose in these financial statements other than those specified
below.
First Acquisition:
As previously disclosed on June 30, 2016, the Company completed
the acquisition of Titancare, LLC. The acquisition became effective (the “Effective day”) on June 27, 2016, a Pennsylvania
At Home Care franchise. The acquisition is subject to Franchisor approval and the completion of an independent audit.
In connection with the closing of the acquisition,
at the Effective Time, each outstanding class of preferred shares of Titan, par value $0.17 per share ("Titan Preferred Class
Stock"), was converted into $0.17 preferred shares (the "Stock Consideration") of the Company’s Preferred
Class “G” Stock, par value $0.001 per share ("CDIF Preferred “G” Stock"). The preferred share
Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred Titan stockholders
at $0.17 per share with a conversion rate of 1 to 1.3 Common Stock payable to Titan shareholders of record as of the close of business
on June 27, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the
sale of certain interests in assets of Titan to certain parties designated the Company, which closed on June 27, 2016 (the "Asset
Sale"). Pursuant to the terms of the Acquisition.
Pending
Franchisor approval and the completion of the independent audit, CDIF will issue approximately 977,247 shares of CDIF Preferred
“G” Shares to Titancare shareholders as Stock Consideration in the Acquisition. Based on the price of CDIF’s
Common stock as of June 27 and 29, 2016 at $0.17 per share, the acquisition consideration represents an approximate value of $166,132
.
The LLC has filed to convert to a Pennsylvania
Corporation.
Second Acquisition:
As previously disclosed on June 29, 2016, the Company completed
the acquisition of York County In Home Care, Inc. The acquisition became effective (the “Effective day”) on June 27,
2016, a Pennsylvania At Home Care franchise. The acquisition is subject to Franchisor approval and the completion of an independent
audit.
In connection with the closing of the acquisition,
at the Effective Time, each outstanding class of preferred shares of York, par value $0.17 per share ("York Preferred Class
Stock"), was converted into $0.17 preferred shares (the "Stock Consideration") of the Company’s Preferred
Class “G” Stock, par value $0.001 per share ("CDIF Preferred “G” Stock"). The preferred share
Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred York stockholders
at $0.17 per share with a conversion rate of 1 to 1.3 Common Stock payable to York shareholders of record as of the close of business
on June 29, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the
sale of certain interests in assets of York to certain parties designated by the Company, which closed on June 29, 2016 (the "Asset
Sale"). Pursuant to the terms of the Acquisition.
Pending
Franchisor approval and the completion of the independent audit, CDIF will
issued approximately 8,235,294 shares of CDIF
Preferred “G” Shares as Stock Consideration in the Acquisition. Based on the price of the Company’s Preferred
“G” Class of stock on June 29, 2016. The acquisition consideration (based on the value of $0.17 in CDIF Preferred
Stock, represents approximately $1,400,000.00.
Third Acquisition:
On August 10
th
,
2016, Cardiff International, Inc. (CDIF) completed the acquisition of Refreshment Concepts, LLC. The acquisition became effective
(the "Effective day") on August 10
th
, 2016.
In connection with the closing of the acquisition, at the Effective
Time, each outstanding class of preferred shares of Refreshment Concepts, par value $0.20 per share ("Refreshment Concepts
Preferred Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of CDIF’s Preferred
Class “H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock"). The preferred share
Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred Refreshment
Concepts stockholders at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable to Refreshment Concepts shareholders
of record as of the close of business on July 22, 2016 (the "Special Conversion"). The Special Conversion right is granted
as a result of the closing of the sale of certain interests in assets of Refreshment Concepts to certain parties designated by
CDIF, which closed on July 22, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition.
CDIF issued approximately 1,440,000 shares of CDIF Preferred “H”
Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock on
July 1
st
, 2016. The acquisition consideration (based on the value of $0.20 in CDIF Preferred Stock, represents approximately
$288,000.00. The LLC has filed to convert to a Georgia Corporation. An amended 8K will be filed with audited financials by October
10
th
t
, 2016.
Forth Acquisition
On August 10
th
, 2016, Cardiff International, Inc. (CDIF)
completed the acquisition of F.D.R. Enterprises. The acquisition became effective (the "Effective day") on August 10th,
2016.
In connection with the closing of the acquisition, at the Effective
Time, each outstanding class of preferred shares of F.D.R. Enterprises par value $0.20 per share ("F.D.R. Enterprises Preferred
Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of CDIF’s Preferred Class
“H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock"). The preferred share Consideration
was adjusted as a result of the authorization and declaration of a special distribution to the preferred F.D.R. Enterprises stockholders
at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable to F.D.R. Enterprises shareholders of record as of
the close of business on July 22, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result
of the closing of the sale of certain interests in assets of F.D.R. Enterprises to certain parties designated by CDIF, which closed
on July 22, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition.
CDIF issued approximately 1,206,870 shares of CDIF Preferred “H”
Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock on
July 1
st
, 2016. The acquisition consideration (based on the value of $0.20 in CDIF Preferred Stock, represents approximately
$241,374.00. The LLC has filed to convert to a Tennessee Corporation. An amended 8K will be filed with audited financials by October
10
th
, 2016.
Fifth Acquisition
On August 10
th
, 2016, Cardiff International, Inc. (CDIF)
completed the acquisition of Repicci’s Franchise Group. The acquisition became effective (the "Effective day")
on August 10
th
, 2016.
In connection with the closing of the acquisition, at the Effective
Time, each outstanding class of preferred shares of Repicci’s Franchise Group par value $0.20 per share ("Repicci’s
Franchise Group Preferred Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of
CDIF’s Preferred Class “H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock").
The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the
preferred Repicci’s Franchise Group stockholders at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable
to Repicci’s Franchise Group shareholders of record as of the close of business on July 22, 2016 (the "Special Conversion").
The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of Repicci’s
Franchise Group to certain parties designated by CDIF, which closed on July 22, 2016 (the "Asset Sale"). Pursuant to
the terms of the Acquisition.
CDIF issued approximately 1,770,000 shares of CDIF Preferred “H”
Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock
on July 1
st
, 2016. The acquisition consideration (based on the value of $0.20 in CDIF Preferred Stock, represents approximately
$354,000.00. The LLC has filed to convert to a Tennessee Corporation. An amended 8K will be filed with audited financials by October
10
th
, 2016.