|
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
_________________
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(Mark One)
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2011
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|
|
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[_]
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TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
__________ to __________
|
Commission File Number: 333-149978
_____________________
THERAPY
CELLS, INC.
fka DIAMOND
INFORMATION INSTITUTE, INC.
(Exact name of registrant as specified in
its charter)
_____________________
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New Jersey
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22-2935867
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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1870 E. Sahara Avenue, Suite 1515, Las Vegas, Nevada
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89104
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(Address of principal executive offices)
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(Zip Code)
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(702) 666-8570
Securities registered pursuant to Section
12(b) of the Act: None
Securities registered pursuant to Section
12(g) of the Act: None
Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [_] No [X]
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [X] No [_]
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes [X_] No [_]
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting
company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer [_]
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Accelerated filer [_]
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Non-accelerated filer [_]
|
Smaller reporting company [X]
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|
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Emerging Growth Company [_]
|
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes [_] No [X]
The number of shares of Common Stock, $0.0001 par value, outstanding
on June 30, 2011 was 1,898,480.
PART I – FINANCIAL INFORMATION
ITEM 1. Financial Statements.
THERAPY CELLS, INC., fka DIAMOND
INFORMATION INSTITUTE, INC.
FINANCIAL STATEMENTS
JUNE 30, 2011
(Unaudited)
THERAPY CELLS, INC., fka DIAMOND
INFORMATION INSTITUTE, INC.
TABLE OF CONTENTS
JUNE 30, 2011
(Unaudited)
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2011 AND DECEMBER 31,
2010
(Unaudited)
|
|
|
June 30, 2011
|
|
|
December 31, 2010
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
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Current Assets
|
|
|
|
|
|
|
|
|
|
Accounts Receivable – related party
|
|
$
|
29,505
|
|
|
$
|
29,505
|
|
|
Prepaid Expenses
|
|
|
33,333
|
|
|
|
33,333
|
|
|
Total Current Assets
|
|
|
62,838
|
|
|
|
62,838
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
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Property & Equipment – net
|
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|
983
|
|
|
|
983
|
|
|
Total Other Assets
|
|
|
983
|
|
|
|
983
|
|
|
TOTAL ASSETS
|
|
$
|
63,821
|
|
|
$
|
63,821
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
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Liabilities
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accrued Interest Payable
|
|
$
|
102,196
|
|
|
$
|
73,215
|
|
|
Accounts Payable – related Party
|
|
|
253,722
|
|
|
|
253,722
|
|
|
Accounts Payable & Accrued Liabilities
|
|
|
21,614
|
|
|
|
34,014
|
|
|
Bank Overdraft
|
|
|
0
|
|
|
|
6,429
|
|
|
Convertible Notes Payable
|
|
|
317,227
|
|
|
|
335,227
|
|
|
Total Current Liabilities
|
|
|
694,759
|
|
|
|
702,607
|
|
|
Total Liabilities
|
|
|
694,759
|
|
|
|
702,607
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder’s Equity
|
|
|
|
|
|
|
|
|
|
Accumulated Deficit
|
|
|
(1,672,349
|
)
|
|
|
(1,672,349
|
)
|
|
Additional Paid in Capital
|
|
|
2,440,034
|
|
|
|
2,233,173
|
|
|
Common stock, $0.0001 par value
|
|
|
192
|
|
|
|
153
|
|
|
Forex adjustments
|
|
|
(13,941
|
)
|
|
|
(13,941
|
)
|
|
Series A Preferred Stock, $0.0001 par value
|
|
|
90
|
|
|
|
0
|
|
|
Series B Preferred Stock, $0.0001 par value
|
|
|
23
|
|
|
|
13
|
|
|
Series C Preferred Stock, $0.0001 par value
|
|
|
25
|
|
|
|
25
|
|
|
Retained Earnings (Loss)
|
|
|
(1,185,860
|
)
|
|
|
0
|
|
|
Net Income
|
|
|
(205,581
|
)
|
|
|
(1,185,860
|
)
|
|
Total Stockholder’s Equity
|
|
|
(630,938
|
)
|
|
|
(638,786
|
)
|
|
Total Liabilities and Equity
|
|
$
|
63,821
|
|
|
$
|
63,821
|
|
See accompanying
notes to financial statement
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2011 AND 2010
(Unaudited)
|
|
|
For the Three Months Ended June 30,
|
|
|
For the Six Months Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
CONSULTING REVENUE
|
|
$
|
0
|
|
|
$
|
126,265
|
|
|
$
|
0
|
|
|
$
|
126,265
|
|
|
Total Income
|
|
|
0
|
|
|
|
126,265
|
|
|
|
0
|
|
|
|
126,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Expense
|
|
|
0
|
|
|
|
198
|
|
|
|
0
|
|
|
|
198
|
|
|
General and Administrative Expense
|
|
|
0
|
|
|
|
364,895
|
|
|
|
0
|
|
|
|
364,895
|
|
|
Impairment Expense
|
|
|
0
|
|
|
|
511,918
|
|
|
|
0
|
|
|
|
511,918
|
|
|
Forex Expense (or Gain)
|
|
|
0
|
|
|
|
6,049
|
|
|
|
0
|
|
|
|
6,049
|
|
|
Interest Expense
|
|
|
28,981
|
|
|
|
8,460
|
|
|
|
28,981
|
|
|
|
8,460
|
|
|
Loss on disposal of assets
|
|
|
0
|
|
|
|
8,039
|
|
|
|
0
|
|
|
|
8,039
|
|
|
Compensation Expense
|
|
|
176,600
|
|
|
|
0
|
|
|
|
176,600
|
|
|
|
0
|
|
|
Total Operating Expenses
|
|
|
205,581
|
|
|
|
899,559
|
|
|
|
205,581
|
|
|
|
899,559
|
|
|
NET INCOME (LOSS) FROM OPERATIONS
|
|
|
(205,581
|
)
|
|
|
(773,294
|
)
|
|
|
(205,581
|
)
|
|
|
(773,294
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAXES
|
|
|
(205,581
|
)
|
|
|
(773,294
|
)
|
|
|
(205,581
|
)
|
|
|
(773,294
|
)
|
|
Provision for Income Taxes
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
NET ORDINARY INCOME (LOSS)
|
|
$
|
(205,581
|
)
|
|
$
|
(773,294
|
)
|
|
$
|
(205,581
|
)
|
|
$
|
(773,294
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE - BASIC
|
|
$
|
(0.13
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.00
|
|
|
NET LOSS PER COMMON SHARE - DILUTED
|
|
$
|
(0.02
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.00
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC
|
|
|
1,530,000
|
|
|
|
256,912,044
|
|
|
|
1,720,000
|
|
|
|
256,917,944
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED
|
|
|
11,790,000
|
|
|
|
256,912,044
|
|
|
|
12,180,000
|
|
|
|
256,917,944
|
|
See accompanying
notes to financial statement
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
STATEMENT OF STOCKHOLDERS’ EQUITY
AS OF JUNE 30, 2011
(Unaudited)
|
|
Common
Shares
|
|
Preferred
Shares
|
|
Additional Paid- in
|
|
Accumulated Other Comprehensive
Income
|
|
Accumulated
|
|
Stockholders’
Equity
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
(Loss)
|
|
Deficit
|
|
(Deficit)
|
|
|
Balance 12-31-2009
|
|
11,813,100
|
|
$
|
11,814
|
|
|
–
|
|
$
|
–
|
|
$
|
1,660,535
|
|
$
|
–
|
|
$
|
(1,672,349
|
)
|
$
|
–
|
|
|
Reverse Split 1000:1
|
|
11,814
|
|
|
(11,813
|
)
|
|
–
|
|
|
–
|
|
|
11,813
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
Series B Preferred stock issued
for cash and services
|
|
–
|
|
|
–
|
|
|
134,000
|
|
|
13
|
|
|
334,977
|
|
|
–
|
|
|
–
|
|
|
334,990
|
|
|
Series C Preferred issued
to acquire Serengete
|
|
–
|
|
|
–
|
|
|
250,000
|
|
|
25
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
25
|
|
|
Common Stock issued for services
at $0.12
|
|
1,000,000
|
|
|
100
|
|
|
–
|
|
|
–
|
|
|
149,900
|
|
|
–
|
|
|
–
|
|
|
150,000
|
|
|
Common Stock issued for convertible
debt at $0.15
|
|
306,666
|
|
|
31
|
|
|
–
|
|
|
–
|
|
|
45,969
|
|
|
–
|
|
|
–
|
|
|
46,000
|
|
|
Common Stock issued for convertible
debt at $0.15
|
|
133,333
|
|
|
14
|
|
|
–
|
|
|
–
|
|
|
19,986
|
|
|
–
|
|
|
–
|
|
|
20,000
|
|
|
Common Stock issued for convertible
debt at $0.15
|
|
66,667
|
|
|
7
|
|
|
–
|
|
|
–
|
|
|
9,993
|
|
|
–
|
|
|
–
|
|
|
10,000
|
|
|
Foreign currency translation
adjustment
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(13,941
|
)
|
|
(13,941
|
)
|
|
Net loss for year ended 12-31-2010
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(1,185,860
|
)
|
|
(1,185,860
|
)
|
|
Balance 12-31-2010
|
|
1,518,480
|
|
$
|
153
|
|
|
384,000
|
|
$
|
38
|
|
$
|
2,233,173
|
|
$
|
–
|
|
$
|
(2,872,150
|
)
|
$
|
638,786
|
)
|
|
Common Stock issued for convertible debt at $0.15
|
|
120,000
|
|
|
12
|
|
|
–
|
|
|
–
|
|
|
17,988
|
|
|
–
|
|
|
–
|
|
|
18,000
|
|
|
Series B Preferred stock issued for compensation at $0.15
|
|
–
|
|
|
–
|
|
|
10,000
|
|
|
10
|
|
|
14,990
|
|
|
–
|
|
|
–
|
|
|
15,000
|
|
|
Common Stock issued for Company debts at $0.15
|
|
82,667
|
|
|
9
|
|
|
–
|
|
|
–
|
|
|
12,391
|
|
|
–
|
|
|
–
|
|
|
12,400
|
|
|
Common Stock issued for compensation at $0.15
|
|
177,333
|
|
|
18
|
|
|
–
|
|
|
–
|
|
|
26,582
|
|
|
–
|
|
|
–
|
|
|
26,600
|
|
|
Series A Preferred stock issued for compensation at $0.15
|
|
–
|
|
|
–
|
|
|
900,000
|
|
|
90
|
|
|
134,910
|
|
|
–
|
|
|
–
|
|
|
135,000
|
|
|
Bank overdraft
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
6,429
|
|
|
6,429
|
|
|
Net loss for the period ended
June 30, 2011
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
(205,581
|
)
|
|
(205,581
|
)
|
|
Balance, June 30, 2011
|
|
1,898,480
|
|
$
|
192
|
|
|
1,294,000
|
|
$
|
138
|
|
$
|
2,440,034
|
|
$
|
–
|
|
$
|
(3,071,302
|
)
|
$
|
(630,938
|
)
|
See accompanying notes to financial statements
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
STATEMENT OF CASH FLOWS
JANUARY 1 THROUGH JUNE 30, 2011 AND 2010
(Unaudited)
|
|
|
For the Six Months Ended
|
|
|
|
|
June 30, 2011
|
|
|
June 30, 2010
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
(205,581
|
)
|
|
$
|
0
|
|
|
Adjustments to reconcile Net Income (Loss) to net cash provided
by operations:
|
|
|
|
|
|
|
|
|
|
Accrued Interest Payable
|
|
|
28,981
|
|
|
|
|
|
|
Accounts Pay & Accrued Liabilities
|
|
|
(12,400
|
)
|
|
|
|
|
|
Bank Overdraft
|
|
|
(6,429
|
)
|
|
|
|
|
|
Convertible Notes Payable
|
|
|
(18,000
|
)
|
|
|
|
|
|
Accounts Pay – related Party
|
|
|
0
|
|
|
|
26,131
|
|
|
Net Cash provided by Operating Activities
|
|
|
(213,429
|
)
|
|
|
26,131
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
0
|
|
|
|
0
|
|
|
Net Cash Provided by (Used In) Investing Activities
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Additional Paid in Capital
|
|
|
206,861
|
|
|
|
|
|
|
Common Stock, $0.0001 par value
|
|
|
39
|
|
|
|
|
|
|
Series A Preferred Stock, $0.0001 par value
|
|
|
90
|
|
|
|
|
|
|
Series B Preferred Stock, $0.0001 par value
|
|
|
10
|
|
|
|
|
|
|
Accumulated Deficit
|
|
|
6,429
|
|
|
|
(26,131
|
)
|
|
Net Cash Provided by Financing Activities
|
|
|
213,429
|
|
|
|
(26,131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Cash at end of period
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS:
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Cash paid for interest
|
|
$
|
0
|
|
|
$
|
0
|
|
See accompanying notes to financial statement
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 – NATURE OF OPERATIONS AND BUSINESS CONTINUITY
Diamond Information Institute Inc., formerly doing business
as Designs by Bergio (the “Company”) was engaged in the design, manufacturing, distribution of fine jewelry throughout
the United States and is headquartered from its corporate office in Fairfield, New Jersey. Based on the nature of operations, the
Company’s sales cycle experienced significant seasonal volatility with the first two quarters of the year representing 15%
- 25% of annual sales and the remaining two quarters representing the remaining portion of annual sales.
Effective October 19, 2009, as approved at our shareholder meeting
on October 8, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration, Inc. (“Alba”), a Delaware
Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue our shareholders a total of 2,585,175
shares of common stock of Alba in exchange for all of the shares owned by the Company’s shareholders. Alba was able to successfully
acquire over 99% of the shares of the Company which it later sold to an unrelated third party in the first quarter of 2010. Following
the transaction described in the Agreement and other accompanying transactions, our former shareholders own 60% of the common stock
issued and outstanding in Alba. Also pursuant to the Agreement, Alba acquired all of the assets and liabilities related to our
jewelry business. As a result of the transaction, the Company became a wholly-owned subsidiary of Alba, and all of our operations
related to the jewelry business we were in were discontinued due to the subsequent sale in the first quarter of 2010 of 99% of
the Company stock to an unrelated third party and the retention of the jewelry business assets and liabilities with the shareholders
of Alba. See Note 8
The financial statements have been prepared on a going concern
basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business
for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $1,653,737.00
as of December 31, 2010 and has assets of $63,821.00, liabilities of $717,328.00 and limited operations, which raises substantial
doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent
upon the Company finding new management to develop a new business that generates profitable operations in the future and/or to
obtain the necessary capital to fund a new business plan.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America (“GAAP” accounting) to prepare the financial statements,
which are presented in US dollars. The Company has adopted a December 31 fiscal year end.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Financial Instruments
The carrying value of the Company’s financial instruments
approximates their fair value because of the short maturity of these instruments.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Income Taxes
Income taxes are accounted for under the assets and liability
method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carryforwards for
income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the
Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted
earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted
average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted for any potentially dilutive debt or equity.
Dividends
The Company has not adopted any policy regarding payment of
dividends. No dividends have been paid during any of the periods shown.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances
that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances
are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets
will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying
amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value
of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
On June 30, 2010, the Company evaluated the carrying value of
its intangible assets, including goodwill. Due to the Company’s current net loss position and uncertainty of cash flow, the
Company impaired all intellectual property and goodwill. This resulted in an impairment expense of $138,738.
Advertising Costs
The Company’s policy regarding advertising is to expense
advertising when incurred.
Revenue Recognition
The Company recognizes revenue when products are fully delivered
or services have been provided and collection is reasonably assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance
with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock
options.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
New Authoritative Accounting Guidance
On July 1, 2009, the Accounting Standards Codification (“ACS”)
became the Financial Accounting Standards Board (“FASB”) officially recognized source of authoritative U.S. generally
accepted accounting principles applicable to all public and non-public non-governmental entities, superseding existing FASB, AICPA,
EITF and related literature. Rules and interpretive releases of the SEC under the authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch
to ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content
in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.
FASB ASC Topic 260, “Earnings Per Share”. On
January 1, 2009, the Company adopted new authoritative accounting guidance under FASB ASC Topic 260, “Earnings Per Share”,
which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to
the two-class method.
FASB ASC Topic 820, “Fair Value Measurements and Disclosures”.
New authoritative accounting guidance under ASC Topic 820, “Fair Value Measurements and Disclosures”, affirms that
the objective of fair value when the market for an asset is not active is the price what would be received to sell the asset in
an orderly transaction, and clarifies and includes additional factors for determining whether there has been a significant decrease
in market activity for an asset when the market for that asset is not active. The new accounting guidance amended prior guidance
to expand certain disclosure requirements. The Company adopted the new authoritative accounting guidance under ASC Topic 820 during
the first quarter of 2009. Adoption of the new guidance did not significantly impact the Company’s consolidated financial
statements.
Further new authoritative accounting guidance (Accounting Standards
Update No. 2009-5) under ASC Topic 820 provides guidance for measuring the fair value of a liability in circumstances in which
a quoted price in an active market for the identical liability is not available. In such instances, a reporting entity is required
to measure fair value utilizing a valuation technique that uses (i) the quoted price of the identical liability when traded as
an asset, (ii) quoted prices for similar liabilities or similar liabilities when traded as assets, or (iii) another valuation technique
that is consistent with the existing principles of ASC Topic 820, such as an income approach or market approach. The new authoritative
accounting guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include
a separate input or adjustment to other inputs relating to the existence of a restriction the prevents the transfer of the liability.
The foregoing new authoritative accounting guidance under ASC Topic 820 will be effective for the Company’s consolidated
financial statements beginning October 1, 2009 and is not expected to have s significant impact on the Company’s consolidated
financial statement.
FASB ASC Topic 825 “Financial Instruments”.
New authoritative accounting guidance under ASC Topic 825, “Financial Instruments”, requires an entity to provide disclosures
about the fair value of financial instruments in interim financial information and amends prior guidance to require those disclosures
in summarized financial information at interim reporting periods.
FASB ASC Topic 855, “Subsequent Events”.
New authoritative accounting guidance under ASC Topic 855, “Subsequent Events”, establishes general standards of accounting
for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to
be issued. ASC Topic 855 defines (i) the period after the balance sheet date during which a reporting entity’s management
should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii)
the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial
statements, and (iii) the disclosures an entity should make about events or transactions that occurred after the balance sheet
date. The new authoritative accounting guidance under ASC Topic 855 became effective for the Company’s financial statements
for periods ending after June 15, 2009. Effective, February 24, 2010, the FASB issued Accounting Standards Update (“ASU”)
No 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements” which revised
certain disclosure requirements. ASU No. 2010-09 did not have a significant impact on the Company’s consolidated financial
statements. The Company evaluated subsequent events, which are events or transactions that occurred after December 31, 2009 through
the issuance of the accompanying consolidated financial statements.
Management does not believe that any other recently issued by
not yet effective accounting pronouncements, if adopted, would affect the accompanying consolidated financial statements.
NOTE 3 – RELATED PARTY TRANSACTIONS
The Company received periodic advances from its principal stockholder
based on the Company’s cash flow needs. The Company has liabilities payable due to various related parties totaling $588,949
as of December 31, 2010. The liabilities are comprised of 1) short- term advances and trade payables bearing no interest, and 2)
convertible notes bearing interest at 10.0% per annum.
The Company has receivables due from various related parties
with a total balance of $29,505 as of December 31, 2010. The receivables do not accrue interest and are due upon demand and were
the result of services performed by the Company for the related parties.
NOTE 4 – COMMON STOCK
Articles of Incorporation Amendment and Stock Split - The
Company’s Certificate of Incorporation, as amended, authorizes the issuance of up to 25,000,000 shares of common stock at
a par value of $0.001 per share. On April 1, 2010, the Company’s Board of Directors ratified a reverse stock split of 1000
to 1.
This resulted in common stock outstanding decreasing from 11,863,100
to 11,814 which were owned by the Company’s 10 shareholders.
Effective April 12, 2010, the Company’s Certificate of
Incorporation was amended to authorize 3,000,000,000 shares consisting of 2,900,000,000 common stock at par value $0.001 and 100,000,000
Preferred stock at par value of $0.001. Further designating 1,000,000 shares as Series A Preferred, par value $0.001, 34,000,000
shares as Series B Preferred, par value $0.001, 30,000,000 shares as Series C Preferred, par value $0.001 and 35,000,000 shares
as Series D Preferred, par value $0.001.
Effective May 18, 2010, the Company’s Certificate of Incorporation
was amended to reduce the par value from $0.001 to $0.0001 and to change the authorized 3,000,000,000 shares to consist of 2,900,000,000
common stock at par value $0.0001 and 100,000,000 Preferred stock at par value of $0.0001. Further designating 1,000,000 shares
as Series A Preferred, par value $0.0001, 50,000,000 shares as Series B Preferred, par value $0.0001, 30,000,000 shares as Series
C Preferred, par value $0.0001 and 5,000,000 shares as Series D Preferred, par value $0.0001.
On April 1, 2010, Company issued 10 Preferred A shares for $10,000
Cash.
On May 31, 2010, Company issued 1,000,000 (post-split) shares
of common stock at $0.15 per share, under employment agreements with its then three officers in advance of services totaling $150,000.
As of September 30, 2010, two of the officers have resigned and $116,667 has been recorded as compensation. (Form 10-Q/A2 filed
4-26-2011 for period 6-30-2010 ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds, Common Stock states: “On
May 31, 2010, the Company issued 1,500,000,054 shares of common stock at $0.0001 per share, in exchange for services totaling $150,010”.
Later, in the Company’s 10-Q filed 9-22-2011 for period 9-30-2010, under NOTE 9 – SUBSEQUENT EVENTS: ”On August
22, 2011 the Company effectuated a reverse-split of its common shares on a 1,500 shares for one basis. All references to common
stock in these financial statements have been retroactively restated to show the effect of this action”.).
NOTE 4 – COMMON STOCK (CONTINUED)
On April 8, 2011, Company converted $18,000 of Notes payable
at $0.15 into 120,000 common shares and recorded $18,000 reduction of Accrued Pay and Accrued Liabilities.
On April 8, 2011, Company issued 10,000 Series B preferred shares
@$0.15 for compensation and recorded $15,000 compensation expense.
On April 11, 2011, Company issued 900,000 Preferred A shares
to Christopher Glover for services at $0.15 per share in amount of $135,000.
On April 19, 2011, Company issued 82,667 common shares at $0.15
for payment of Company debts and recorded $12,400 of operating expenses.
On April 19, 2011, Company issued 177,333 common shares at $0.15
for payment of compensation and recorded $26,600 compensation expense.
On May 20, 2011, Company filed Articles of Amendment adopted
February 28, 2011 changing Article 1. Company Name from Diamond Information Institute Inc to Therapy Cells, Inc. and Article 4.
Authorized Shares as follows: “On May 20, 2011, an amendment to the Certificate of Incorporation was filed which authorizes
shares consisting of 2,800,000,000 shares of common stock, par value $0.0001, and 200,000,000 shares of preferred stock, par value
$0.0001, a decrease to the authorized shares of Series B preferred stock, from 50,000,000 to 10,000,000 shares, a decrease to the
authorized shares of Series C preferred stock, from 30,000,000 to 10,000,000 shares and to increase the authorized 5,000,000 shares
of Series D preferred to 30,000,000 shares.”
Debt Conversions - In July 2010, Company converted $46,000.00
of note debt at $0.15 into 306,667 common shares. On November 19, 2010, Company converted $10,000 of note debt into 66,667 common
shares. On November 22, 2010, Company converted $20,000 of note debt into 133,333 common shares. (Note conversions adjusted to
post 1500:1 RS of August 22, 2011).
Restricted Share Issuances - In January 2009, the Company
agreed to issue its SEC counsel, 100,000 shares of restricted common stock with a fair value of $0.40 per share or $40,000 for
services in connection with the effective filing of Form 15c-211 and submittal to FINRA through a market maker. The Share-Based
Compensation expense for the three and nine months ended September 30, 2009 amounted to $0 and $40,000, respectively.
In February 2009, the Company issued to its CEO 50,000 shares
of restricted common stock with a fair value of $0.40 per share or $20,000 for services as a Board of Directors member throughout
2009. The Share-based Compensation expense for the three and nine months ended September 30, 2009 amounted to $5,000 and $15,000,
respectively.
In February 2009, the Company issued its SEC counsel 20,000
shares of restricted common stock with a fair value of $0.40 per share or $8,000 for legal services to be provided for the Company’s
SEC filings for the 2009 reporting year.
On April 10, 2010, the Company issued 134,000 shares of Preferred
B stock at $2.50 per share as compensation for $274,990 services and $60,000 cash.
On May 17, 2010, the Company issued 250,000 shares of Preferred
C stock (“Series C”) in exchange for all the shares issued and outstanding of Serengeti Consulting, Inc. valued at
$0.0001 per share.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
Employment Agreement
On May 31, 2010, the Company entered into an employment agreement
(“Employment Agreement”) with its Chief Financial Officer (“CFO”), which requires that the CFO be paid
an annual base salary of $50,000 for one (1) year from the date of signing and the issuance of 500,000,000 shares of the Company’s
common stock. Either party may extend the Employment Agreement for additional one (1) year periods.
At December 31, 2010, the Company owned minimal property and
equipment with depreciated book value of $983
NOTE 6 – INCOME TAXES
At December 31, 2009, the Company had approximately $1,600,000
of federal net operating tax loss carryforwards expiring at various dates through 2029. The Tax Reform Act of 1986 enacted a complex
set of rules which limits a company’s ability to utilize net operating loss carryforwards and tax credit carryforwards in
periods following an ownership change. These rules define an ownership change as a greater than 50 percent point change in stock
ownership within a defined testing period which is generally a three-year period. As a result of stock which may be issued by us
from time to time and the conversion of warrants, options or the result of other changes in ownership of our outstanding stock,
the Company may experience an ownership change and consequently our utilization of net operating loss carryforwards could be significantly
limited.
Based upon the net losses historically incurred and, the prospective
global economic conditions, management believes that it is not more likely than not that the deferred tax asset will be realized
and has provided a valuation allowance of 100% of the deferred tax asset.
NOTE 7 – DISCONTINUED OPERATIONS
The Company’s former jewelry business, which was discontinued
on October 19, 2009 when all assets and liabilities related to this business were acquired by Bergio International, Inc. (formerly
known as Alba Mineral Exploration, Inc.) has been accounted for as discontinued operations in accordance with FASB ASC Topic 205
“Discontinued Operations”. The results of operations of this business have been removed from the results of continuing
operations for all periods presented. The assets and liabilities of discontinued operations have been reclassified and are segregated
in the balance sheets.
NOTE 8 – SUBSEQUENT EVENTS
On February 2, 2010 Bergio International, Inc. (the “Seller”),
owner of 99% of the outstanding common shares of the Company, entered into a share purchases agreement (the “Agreement”)
with Macau Consultants and Advisory Services Inc. (the “Buyer”). In accordance with the terms and provisions of the
Agreement, the Seller sold and aggregate of 11,852,700 shares of common stock of the Company to Buyer in exchange for $225,000.
The closing and consummation of the Agreement occurred March 18, 2010. New officers and directors of the Company were appointed
and a change of control of the Company occurred.
NOTE 9 – ACQUISITION OF SUBSIDIARIES
On September 28, 2009 Diamond Information Institute Inc. (“Diamond”)
entered into a Memorandum of Understanding (“MOU”) with Serengeti Consulting Inc. (“Serengeti”) to purchase
all of the capital stock of Serengeti. This agreement was approved by the Board on May 14, 2010 and completed on May 17, 2010.
Diamond issued 250,000 shares of Preferred C stock in a stock for stock transaction for all of the shares of Serengeti. Serengeti
is currently a wholly owned subsidiary of Diamond. As part of this transaction, the Company recognized a purchase price of $25,
which is comprised of the following components:
|
Property and equipment, net
|
|
$
|
277,279
|
|
|
Intangible assets
|
|
|
373,767
|
|
|
Net liabilities acquired
|
|
|
(651,021
|
)
|
|
Purchase Price
|
|
$
|
25
|
|
On June 30, 2010 the Company evaluated the carrying value of
its intangible assets, including goodwill. Due to the Company’s current net loss position and uncertainty of cash flow, the
Company impaired all intellectual property and goodwill. This resulted in an impairment expense of $373,767.
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements”.
All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and
state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements
of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or
developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements
of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may”,
“could”, “estimate”, “intend”, “continue”, “believe”, “expect”,
or “anticipate”, or other similar words. These forward-looking statements present our estimates and assumptions only
as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation,
to update and forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however,
consult further disclosures we make in future filings of our Annual Report on Form 10-Q, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
Although we believe the expectations reflected in any of our
forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our
forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements,
are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are
not limited to:
|
|
·
|
Our current lack of working capital;
|
|
|
·
|
Increased competitive pressures from existing competitors and new entrants;
|
|
|
·
|
Increases in interest rates or our cost of borrowing or default under any material debt agreements;
|
|
|
·
|
Inability to raise additional financing;
|
|
|
·
|
Deterioration in general or regional economic conditions;
|
|
|
·
|
Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
|
|
|
·
|
Changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
|
|
|
·
|
The fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;
|
|
|
·
|
Inability to efficiently manage our operations;
|
|
|
·
|
Loss of customers or sales weakness;
|
|
|
·
|
Inability to achieve future sales levels or other operating results;
|
|
|
·
|
Key management or other unanticipated personnel changes;
|
|
|
·
|
The unavailability of funds for capital expenditures; and
|
|
|
·
|
Operational inefficiencies in distribution or other systems
|
For a detailed description of these and other factors that could
cause actual results to differ materially from those expressed in any forward-looking statement, please see Item 1A, Risk Factors,
in this document.
Throughout this Annual Report references to “we”, our”, “us”, “Diamond”,
“the Company”, “Therapy Cells” and similar terms refer to Therapy Cells, Inc., fka Diamond Information
Institute, Inc.
Our securities as of September 8, 2008 are registered under
the Securities Act of 1933 and we will file reports and other information with the Securities and Exchange Commission as a result.
Additionally, we shall file supplementary and periodic information, documents and reports that are required under section 13(a)
and Section 15(d) of the Exchange Act , as amended.
Any annual, quarterly, special reports and other information
filed with the SEC can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room
1580, Washington, DC 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning
1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval
System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained
by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed
rates.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Diamond Information Institute, Inc. was incorporated in the
State of New Jersey in October of 1988 and had minimal activity until 1995 when it began in the business of jewelry manufacturing.
Diamond has been engaged in the design and manufacture of upscale jewelry from 1995 through October 2009. Effective October 19,
2009, as approved at our shareholder meeting on October 5, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration,
Inc. (“Alba”), a Delaware Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue
our shareholders a total of 2,585,175 shares of common stock in Alba in proportion to their holdings in our company. Following
the transaction described in the Agreement and other accompanying transactions, our shareholders own 60% of the common stock issued
and outstanding in Alba. Also pursuant to the Agreement, Alba acquired all of the assets and liabilities related to our business.
As a result of the transaction the company became a wholly-owned subsidiary of Alba, and all of our operations related to the jewelry
business we were in were discontinued. Based upon consummation of this Share Purchase Agreement and the subsequent change in control
of the Company, the business operations of the Company will change as follows:
OVERVIEW OF CURRENT OPERATIONS
The Company’s business operations will involve embarking
upon a project to make Venture Capital Investments into private and public Companies. Management plans on obtaining the necessary
capital for these venture capital investments via borrowings and investments into the Company. The eligible companies qualifying
for an investment from the Company will be companies who currently have a dynamic business plan and are nearing completion of the
establishment of that business plan or are currently established businesses with a very low overhead and cost of sales thus giving
them a large increase in positive cash flow with the injection of new capital into the company. A specific emphasis of the Company
will be in the Green Energy as well as the renewable energy fields and the development of Software as a Service (SAAS) sector.
The Company will also be operating a consultancy division to assist existing private companies to go public as well as assisting
companies who are already public to restructure and raise additional money from the capital markets. There are numerous projects
already submitted which are currently being considered for funding.
The Company plans on using consultants to execute its business
plan as much as possible. That way management is able to access the very best in the industry sectors that the Company will be
operating in and the Company will not be encumbered with considerable expensive overhead when the marketplace becomes soft as they
all do from time to time. Management believes that the Company’s business model should insulate it from major market downturns
since the market sector the Company will be operating in will be fee based. Management further believes that when the general market
enters a Bear Market phase, there will be the most demand for the services the Company will be providing. As well as the consultancy
side of the Company’s business, the Company will be able to monitor and assist any companies it invests in to ensure the
Company’s investments grow and mature on a timely basis with as little harm from cycles in the specific investment sectors
that the Company invests in as possible
General Business Development
Diamond Information Institute, Inc. was incorporated in the
State of New Jersey in October of 1988 and had minimal activity until 1995 when it began in the business of jewelry manufacturing.
Diamond has been engaged in the design and manufacture of upscale jewelry from 1995 through October 2009. Effective October 19,2009,
as approved at our shareholder meeting on October 8, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration,
Inc. (“Alba), a Delaware Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue our shareholders
a total of 2, 585,175 shares of common stock in Alba in proportion to their holdings in our company. Following the transaction
described in the Agreement and other accompanying transactions, our shareholders own 60% of the common stock issued and outstanding
in Alba. Also pursuant to the Agreement, Alba acquired the assets and liabilities related to our business. As a result of the transaction
the company became a wholly-owned subsidiary of Alba, and all of our operations related to the jewelry business were discontinued.
Pursuing a new line of business: On May 10, 2011, Company authorized
the formation of Therapy Cells JV, Inc. and filed Articles of Incorporation on May 13, 2011 with the first Board of Directors consisting
of Christopher Glover, Patrick Casey, and Garry Green.
Domestication into Wyoming
Pursuant to Board of Director’s Resolution dated April
11, 2011, The company “Resolved, that the Company authorize and enact the following two corporate actions: (a) a change of
state of incorporation and domicile from the state of New Jersey to the state of Wyoming; and (b) a change of the name of the Company
from DIAMOND INFORMATION INSTITUTE, INC. to THERAPY CELLS, INC. ….” With an effective date of May 20, 2011. Company
filed Articles of Domestication of Diamond Information Institute, Inc. from New Jersey to Wyoming.
Name Change from Diamond Information Institute Inc. to Therapy
Cells Inc.
Concurrent with domestication into Wyoming on May 20, 2011,
Company filed Articles of Amendment changing its name from Diamond Information Institute Inc to Therapy Cells Inc.
Agreement for the Purchase of Common Stock and Warrants
Bergio International, Inc. (the “Seller”), as record
owner or agent representing 11,863,100 shares of common stock of Diamond Information Institute, Inc., a corporation formed under
the laws of the State of New Jersey (the “Company”) entered into a share purchase agreement dated February 2, 2010
(the “Share Purchase Agreement”) with Macau Consultants and Advisory Services Inc. (the “Buyer”). In accordance
with the terms and provisions of the Share Purchase Agreement, the Seller sold an aggregate of 11,863,100 shares of common stock
(the “Common Stock”) of the Corporation to the Buyer in exchange for $225,000 (the “Purchase Price”). The
closing and consummation of the Share Purchase Agreement occurred March 18, 2010 (the Closing Date”). The Purchase Price
shall be paid as follows: (i) $50,000 initial deposit, which as of the date of this Current Report has been paid; (ii) $55,000
within thirty days from the Closing Date, which is due approximately April 18, 2010’ (iii) $60,000 within sixty days from
the Closing Date, which is due approximately May 18, 2010; and (iv) $60,000 within ninety days from the Closing Date, which is
approximately June 18, 2010. As of the date of this Current Report, new officers and directors of the Company have been appointed
and the change in control is being effected. A subsequent current report on form 8-K will be filed disclosing beneficial ownership
and control of the Company.
Current Business Operations
The Company was organized under the laws of the State of New
Jersey in October of 1988. Since approximately 1995, the Company had been involved in the business of designing and manufacturing
jewelry under its trade name of the Bergio” line. Based upon consummation of the Share Purchase Agreement and the subsequent
change in control of the Company, the business operations of the Company will change.
The Company’s business operations will involve embarking
upon a project to make Venture Capital Investments into private and public Companies. The eligible companies qualifying for and
investment from the Company will be companies who currently have a dynamic business plan and are nearing completion of the establishment
of that business plan or are currently established businesses with positive cash flow but require additional funding to develop
existing markets or expand into new markets. Emphasis will be on businesses with a very low overhead and cost of sales thus giving
them a large increase in positive cash flow with the injection of new capital into the company. A specific emphasis of the Company
will be in the Green Energy as well as the renewable energy fields and the development of Software as a Service (SAAS) sector.
The Company will also be operating a consultancy division to assist existing private companies to go public as well as assisting
companies who are already public to restructure and raise additional money from the capital markets.
The Company plans on using consultants to execute its business
plan as much as possible. That way management is able to access the very best in the industry sectors that the Company will be
operating in and the Company will not be encumbered with considerable expensive overhead when the marketplace becomes soft as they
all do from time to time. Management believes that the Company’s business model should insulate it from major market downturns
since the market sector the Company will be operating in will be fee based. Management further believes that when the general market
enters a Bear Market phase, there will be the most demand for the services the Company will be providing. As well as the consultancy
side of the Company’s business, the Company will be able to monitor and assist any companies it invests in to ensure the
Company’s investments grow and mature on a timely basis with as little harm from cycles in the specific investment sectors
that the Company invests in as possible.
Management believes that regardless of whether the Company is
in a Bear cycle or a Bull market run, there will always be a healthy demand for funds and always a need for business management
services to assist those who are floundering. Management believes that the Company has the best of both worlds since the Company
should prosper from the Bear and Bull Market cycles. The only determinant for the Company in determining how fast it can grow its
business will be in the Company’s success in obtaining the necessary funds for deployment into good qualifying business models.
Management of the Company looks forward to the future with great anticipation.
Environmental Regulation and Compliance
The Unites States environmental laws do not materially impact
Diamond’s operations.
Government Regulation
Currently, the Company is subject to all government regulations
that regulate businesses generally such as compliance with regulatory requirements of federal, state, and local agencies and authorities,
including regulations concerning workplace safety, labor relations, and disadvantaged businesses. In addition, the Company’s
operations are affected by federal and state laws relating to marketing practices in the retail jewelry industry. Diamond is subject
to the jurisdiction of federal, various state and other taxing authorities. From time to time, these taxing authorities review
or audit the Company.
PROPERTIES
Currently, the Company leases office space in a shared executive
suite located in Las Vegas, Nevada on a monthly basis.
On May 6, 2011, Company moved its primary office space to 1870
E Sahara Ave, Suite 1515, Las Vegas, NV 89104.
ITEM 3. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES
Market Information
During the year ended December 31, 2008, we filed for inclusion
of our common stock on the Over-the-Counter Bulletin Board (“OTC:BB”). Our Common Stock was approved for trading by
FINRA for trading on the OTC:BB under the symbol DIII on January 26, 2009.Since being quoted on the OTC:BB, our common stock has
not traded.
Holders of Common Stock
As of June 30, 2011 we had approximately 32 stockholders of
record of the 1,898,480 common shares outstanding.
Dividends
The payment of dividends is subject to the discretion of our
Board of Directors and will depend, among other things, upon our earnings, our capital requirements, our financial condition, and
other relevant factors.
We currently do not intend to pay cash dividends in the foreseeable
future on the shares of common stock. We intend to reinvest any earnings in the development an expansion of our business. Any cash
dividends in the future to common stockholders will be payable, when, as and if declared by our Board of Directors, based upon
the Board’s assessment of :
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Oure financial condition;
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Prior claims of preferred stock to the extent issued and outstanding; and
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Other factors, including any applicable laws.
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Therefore, there can be no assurance that any dividends on the
common stock will ever be paid.
Securities Authorized for Issuance under Equity Compensation
Plans
We currently do not maintain any equity compensation plans
Issuer Purchases of Equity Securities
We did not repurchase any of our securities during the year
ended December 31, 2009.
ITEM 4. CONTROLS AND PROCEDURES
Included in 10-Q filed 09-22-2011 for period 09-30-2010, Company
reported as follows: “Our new Chief Executive Officer, Christopher Glover, and Chief Financial Officer, Lorne Gale, evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 as amended, as of the end of the period covered by this Report. Based on the evaluation effect of this restatement of the
financial statements, management has concluded that prior disclosures of disclosure controls and procedures were inaccurate, and
as further explained in Footnote 8 to the financial statements for the Company above, Messrs. Glover and Gale concluded that our
disclosure controls and procedures are not effective in timely alerting them to material information relating to us as required
to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that
we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal
financial officer, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.
In order to address and remedy deficiencies in the Company’s disclosure controls and procedures, management has initiated
the engagement of an experienced third party consultant to address disclosure controls and procedures on an ongoing basis and has
also engaged a PCAOB registered accounting firm to review the Form 10-Q and the Company’s financial statements for the period
ended September 30, 2010 and all subsequent reporting periods for the Company.
There were no changes in our internal control over financial
reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially
affect, our internal control over financial reporting.”
Management’s Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate internal control, as is defined in the Securities Exchange Act of 1934. These internal controls are designed to provide
reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments
inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any
system of internal controls, including the possibility of human error and overriding of controls. Consequently, an effective internal
control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.
Our internal control over financial reporting includes policies
and procedures that : (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions;
(ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance
with generally accepted accounting principles and the receipts and expenditures of company assets are made and in accordance with
our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection
of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Management has undertaken an assessment of the effectiveness
of our internal control over financial reporting based on the framework and criteria established in the Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based
upon this evaluation, management concluded that our internal control over financial reporting was effective as of December 31,
2009.
This conclusion has subsequently proved to be inadequate.
AUDIT COMMITTEE
Our Board of Directors has not established an audit committee.
The respective role of an audit committee has been conducted by our Board of Directors. If and when an audit committee is established,
the audit committee’s primary function will be to provide advice with respect to our financial matters and to assist our
Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit
committee’s primary duties and responsibilities will be to : (i) serve as an independent and objective party to monitor our
financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants;
(iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management’s
establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among
the independent accountants, management and our Board of Directors.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Following the acquisition of Serengeti Consulting, Inc., Company
and auditor were unable to agree over the proper way to account for the acquisition on the books of the Company which resulted
in repeated amended 10-Qs for period 06-31-2010. This resulted in late filing of the required 10-Q/A2 for period 06-30-2010 on
04-26-2011. Subsequent to that date, on 9-22-2011, Company filed the Form 10-Q for period 9-30-2010. No further filings with SEC
were filed after that date. Company subsequently filed a Form 15 on 02-29-2012 to formally end their duty to file reports under
Sections 13 and 15(d) of the Securities Exchange Act. Form 15 Rule 12h-3(b)(1)(i) is relied upon as Company had only 22 shareholders
on that date and has never had over 300 shareholders of record. The Company’s 15(d) obligation to file was automatically
suspended under previous rules.
This Year End 2010 10-Q is being filed almost 9 years after
its due date, voluntarily, to file the missing reports prior to the Form 15 with SEC as noted by FINRA. This 10-Q has been prepared
without assistance of accountants or auditors from the Company history that has previously been filed with SEC and the OTC. These
reports have been prepared from the historical and sometimes conflicting record to the best of the ability of current management.
Management believes that filing these reports will have no material effect or change on the Company as all events were reported
contemporaneously on the OTC and are already reflected in the Company filings of record with the OTC thru 03-31-2015.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits
and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a
party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially
affect our financial position or results of operations.
ITEM 1A. RISK FACTORS
Risks Relating To Our Planned Business and Marketplace
You should carefully consider the risks described below and
all other information contained in this annual report on Form 10-Q, including financial statements and the related notes thereto.
The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known
to us, or not presently deemed material by us, may also impair our future operations and performance. If any of the following risks
actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens,
the trading price of our common stock could decline, and you may lose all or part of your investment.
Our business may be adversely affected by the recent financial
crisis and our ability to access the capital markets.
The global financial markets are in turmoil, and the economies
of the U.S. and many other countries are in recession, which may be severe and prolonged. This status has resulted in diminished
opportunities for liquidity and credit availability, declines in consume confidence, declines in economic growth, increases in
unemployment rates, and uncertainty about overall economic stability, and there can be no assurance against further decline. The
end markets for certain of our portfolio of prospective companies’ products and services have experienced, and continue to
experience, negative economic trends. We are unable to predict the likely duration and severity of this global financial turmoil,
and if the current uncertainty continues or economic conditions further deteriorate, our business and the businesses of our portfolio
companies could be materially and adversely affected.
There is uncertainty regarding the value of our planned investments
in restricted securities.
We may be required to carry our planned portfolio investments
at market value or, if there is no readily available market value, at fair value as determined by us with our Board of Directors
having final responsibility for overseeing, reviewing and approving, in good faith, our estimate of fair value. Because of the
inherent uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values, our fair value
determinations may differ materially from the values a third party would be willing to pay for such securities or the values which
would be applicable to unrestricted securities having a public market.
The lack of liquidity of restricted securities may adversely
affect our planned business.
Our portfolio may contain many securities which are subject
to restrictions on sale because they will have been acquired from issuers in “private placement” transactions or because
we are deemed to be an affiliate of the issuer. Unless an exemption from the registration requirements of the Securities Act of
1933 is available, we will not be able to sell these securities publicly without the expense and time required to register the
securities under applicable federal and state securities laws. In addition, contractual or practical limitations may restrict our
ability to liquidate our securities in planned portfolio companies, because we may own a relatively large percentage of the issuer’s
outstanding securities. Sales may also be limited by unfavorable market conditions. The illiquidity of our investment may preclude
or delay the disposition of such securities, which may make it difficult for us to obtain cash equal to the value at which we record
our investments.
There may be limited publicly available information regarding
the companies in which we are contemplating investment.
It is possible that some of the securities in our future portfolio
may be issued by privately held companies. Many of the securities in our portfolio are issued by privately held companies. There
is generally little or no publicly available information about such companies, and we may have to rely on the diligence of our
management to obtain the information necessary for our decision to invest. There can be no assurance that such diligence efforts
will uncover all material information necessary to make fully informed investment decisions.
Some of our planned portfolio companies may be highly leveraged.
Some of our planned portfolio companies may have incurred substantial
indebtedness in relation to their overall capital base. Such indebtedness often has a term that will require the balance of the
loan to be refinanced when it matures. If these companies cannot generate adequate cash flow to meet the principal and interest
payments on their indebtedness, the value of our investment in them could be reduced or eliminated through foreclosure on the portfolio
company’s assets or by the portfolio company’s reorganization or bankruptcy.
Fluctuations may occur in our quarterly results.
Our future quarterly operating results may fluctuate materially
due to a number of factors including, among others, variation in and the timing of the recognition of realized and unrealized gains
or losses, the degree to which we encounter competition in our planned portfolio companies’ markets, the ability to find
and close suitable investments, and general economic conditions. As a result of these factors, results for any future period should
not be relied upon as being indicative of performance in future periods.
Our future financial condition and results of operation will
depend on our ability to effectively manage any future growth
Sustaining growth will depend upon our ability to identify,
evaluate, finance, and invest in companies that meet our investment criteria. Accomplishing such results on a cost-effective basis
is a function of our marketing capabilities and skillful management of the investment process. Failure to achieve future growth
could have a material adverse effect on our business, financial condition, and results of operations.
We will be dependent upon management for our future success.
Selection, structuring and closing our investments will depend
upon the diligence and skill of our management, which is responsible for identifying, evaluating, negotiating, monitoring and disposing
of our investments. Our management’s capabilities may significantly impact our results of operations. If we lose any member
of our management team and they cannot be promptly replaced with an equally capable team member, our results of operations could
be significantly impacted.
We will operate in a highly competitive market for investment
opportunities.
We will compete for attractive investment opportunities with
private equity funds, venture capital partnerships and corporations, venture capital affiliates of industrial and financial companies,
SBICs and wealthy individuals. Some of these competitors will be substantially larger and have greater financial resources, and
some are subject to different and frequently less stringent regulation. As a result of this competition, we may not be able to
take advantage of attractive investment opportunities from time to time and there can be no assurance that we will be able to identify
and make investments that satisfy our objectives.
Changes in laws or regulations governing our operations or
our failure to comply with those laws or regulation may adversely affect our business.
We and our planned portfolio companies are subject to regulation
by laws at the local, state and federal level. These laws and regulations, as well as their interpretation, may be changed from
time to time. Accordingly, any changes in these laws and regulations or failure to comply with them could have a material adverse
effect on our business.
Failure to deploy new capital may reduce our return on equity.
If we fail to invest our capital effectively, our return on
equity may be decreased, which could reduce the price of the shares of our common stock.
The market price of our common stock may fluctuate significantly.
The market price and marketability of shares of our common stock
may from time to time be significantly affected by numerous factors, including our investment results, market conditions, and other
influences and events over which we have no control and that may not be directly related to us.
Risks Relating to our Common Stock
If we fail to remain current on our reporting requirements,
we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the
ability of stockholders to sell their securities in the secondary market.
Companies trading on the OTC Bulletin Board, such as us, must
be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports
under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, the Financial Industry
Regulatory Authority (“FINRA”) has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin
Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports
late with the commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure
to timely file twice in a two-year period then we will be ineligible for quotation on the OTC Bulletin Board. As a result, the
market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealer to sell our securities
and the ability of stockholders to sell their securities in the secondary market. We have not been late in any of our SEC reports
through December 31, 2009.
Our common stock could be deemed a low-priced “Penny”
stock which could make it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock
less liquid and negatively affect the price of our stock.
In the event where our securities are accepted for trading in
the over-the-counter market, trading of our common stock may be subject to certain provisions of the Securities Exchange Act of
1934, commonly referred to as the “penny stock” rule as defined in Rule 3a51.1. A penny stock is generally defined
to be any equity security that has a market price less than $5.00 per share, subject to certain exception. If our stock is deemed
to be a penny stock, trading will be subject to additional sales practice requirements of broker-dealers. These require a broker-dealer
to:
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Deliver to the customer, and obtain a written receipt for, a disclosure document;
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Disclose certain price information about the stock;
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Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
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Send monthly statements to customers with market and price information about the penny stock; and
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In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.
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Consequently, penny stock rules may restrict the ability or
willingness of broker-dealers to trade and/or maintain a market in our common stock. Also, prospective investors may not want to
get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares.
FINRA sales practice requirements may also limit a stockholder’s
ability to buy and sell our stock.
In addition to the “penny stock” rules described
above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable
ground for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities
to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s
financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes
that there is a high probability that speculative low-priced securities will not be suitable for a least some customers. The FINRA
requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit
your ability to buy and sell our stock and have an adverse effect on the market for our shares.
ITEM 2. Recent Sales of Unregistered Securities
On January 30, 2009, we authorized the issuance of 100,000 shares
of our common stock to Stoecklein Law Group pursuant to its retainer agreement for legal services.
On February 11, 2009, we authorized the issuance of 50,000 shares
of our common stock to Berge Abajian as compensation for his board services during the 2009 year.
On February 26, 2009, we authorized the issuance of 20,000 shares
of our common stock to Stoecklein Law Group pursuant to a new retainer agreement for legal services during the 2009 year.
We believe that the issuance of the shares was exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The shares were issued
directly by us and did not involve a public offering or general solicitation. The recipients of the shares were afforded an opportunity
for effective access to files and records of our company that contained the relevant information needed to make their investment
decision, including our financial statements. We reasonably believe that the recipients, immediately prior to issuing the shares,
had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks
of their investment. The recipients had the opportunity to speak with our management on several occasions prior to their investment
decision. There were no commissions paid on the issuance of the shares.
ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following exhibits are files as part of this Annual Report.
THERAPY CELLS, INC., FKA DIAMOND
INFORMATION INSTITUTE, INC.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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THERAPY CELLS, INC.,fka DIAMOND INFORMATION INSTITUTE INC.
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Dated: October 10, 2019
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By:
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/s/ Paul Knudson
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Paul Knudson, CEO & CFO
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Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.
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THERAPY CELLS, INC.,fka DIAMOND INFORMATION INSTITUTE INC.
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Dated: October 10, 2019
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By:
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/s/ Paul Knudson
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Paul Knudson, - Director
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