UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File #
MONEYLOGIX GROUP, INC.
(Exact name of registrant as specified in its charter)
| NEVADA | 33-0680443 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
260 Edgeley Blvd, Suite 12, Concord, Ontario L4K 3Y4
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (905) 761-1400
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 periods 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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in rule 12b-2 of the Exchange Act (Check one):
| Large accelerated filer | o | Accelerated filer | o |
| Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
Yes x No o
Indicate the number of shares outstanding of the Registrant’s common stock as of the latest practicable date.
| Class | | Outstanding at August 14, 2009 |
| Common Stock, $.001 par value | | 94,538,586 |
Aggregate market value of the voting common stock held by non-affiliates of the registrant as of August 14, 2009 is: $95,483,972
| Transfer Agent as of August 14, 2009: | OTR, Inc. Transfer Agent & Registrar 1000 SW Broadway, Suite 920 Portland, Oregon 97205 (503) 225-0375 www.transfer.com |
TABLE OF CONTENTS
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition | 4 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 6 |
| Item 4T. | Control and Procedures | 6 |
| | | |
| PART II— OTHER INFORMATION | |
| | | |
| Legal Proceedings | 8 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 8 |
| Item 3. | Defaults Upon Senior Securities | 8 |
| Submission of Matters to a Vote of Security Holders | 8 |
| Item 5. | Other Information | 8 |
| Exhibits and Reports on Form 8-K | 8 |
| | | |
| 9 |
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Basis of Presentation
The accompanying statements are presented in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring adjustments) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months and the six months ended June 30, 2009 are not necessarily indicative of results that may be expected for the year ending December 31, 2009.
The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements on page F-1 and ending on F-15.
The following is management’s discussion and analysis of the financial condition and results of operations of MoneyLogix Group, Inc. for the three months and six months ending June 30, 2009 and 2008. The following information should be read in conjunction with the reviewed financial statements for the period ending June 30, 2009 and notes thereto appearing elsewhere in this form 10-Q.
Overview
MoneyLogix Group, Inc. (“Company”, “We”, “Our”, or “MoneyLogix Group”), formerly Homelife, Inc., a corporation incorporated under the laws of Nevada, entered into a share exchange agreement on January 3, 2008 with MoneyLogix Inc., a Delaware private corporation. The reverse merger transaction effected a change of control of the Company. The accounting acquirer is MoneyLogix, Inc. and the historical operations of the Company are the operations of MoneyLogix, Inc. Pursuant to the terms of the share exchange agreement, the parties agreed to the following:
| 1. | Mr. Cimerman, the former Company Chief executive and majority shareholder, agreed to transfer 458,000 shares of the Company to the Company treasury in exchange for the spin off of all assets of the Company to Mr. Cimerman. This was executed at closing on May 28, 2008. Mr. Cimerman still had a shareholder loan to be satisfied by the Company; |
| 2. | MoneyLogix Group agreed to change the name of the Company from Homelife, Inc. to MoneyLogix Group, Inc. This was executed on January 29th , 2008; |
| 3. | MoneyLogix Group agreed to issue 100,000,000 shares of our common stock to MoneyLogix Inc. in exchange for 100% of MoneyLogix Inc.’s issued and outstanding stock. 80,000,000 shares of the Company were issued on May 28, 2008 to MoneyLogix Inc. 100% of the shares of MoneyLogix Inc. were transferred to MoneyLogix Group making MoneyLogix Inc. a wholly owned subsidiary of the Company on May 28, 2008. On June 13, 2008, 200,000 additional shares of the Company were issued to MoneyLogix Inc. shareholders. 19,800,000 shares of the Company are still to be transferred to MoneyLogix Inc. shareholders, post agreement closure on May 28, 2008, pending changes to the number of shares authorized for issuance; |
| 4. | MoneyLogix Inc. agreed to pay to the Company $250,000 for the satisfaction of all outstanding debt of the Company, including the outstanding amount owing to Mr. Cimerman. MoneyLogix Inc. made payment of $250,000 to an agreed upon trust agent on May 28, 2008, to be released to the Company upon on the complete satisfaction of all the terms of the agreement. The cash occurred between shareholders and did not run through Moneylogix, Inc., therefore this is a non cash transaction included in Capital in the accompanying Statements of Stockholder’s Deficit. |
| 5. | The Company will effect a 22 to 1 reverse split of the Company’s stock. The 22 to 1 reverse stock split took place on May 28, 2008; |
| 6. | Following the 22 to 1 reverse stock split, MoneyLogix Group agreed to issue 490,310 shares of common stock (post 22-for-1 reverse stock split) to Mr. Cimerman, the former Company Chief executive and majority shareholder, in consideration for Mr. Cimerman retiring a certain portion of debt the Company owes him and cancelling 10,000 of Our Class A preferred shares and 50 of Our Class AA Preferred Shares held by Mr. Cimerman. It was agreed that the 490,310 shares issued to Mr. Cimerman shall be restricted and locked up for transfer and monetization for 24 months. The 490,310 shares of common stock are included in the total 563,586 shares dated May 28, 2008 as Common Shares Outstanding to Former Homelife, Inc. Shareholders in the accompanying Statements of Stockholder’s Deficit. |
There are no material differences in accounting treatment or federal income tax consequences from the share exchange agreement. Similarly, we were not required to obtain any federal or state regulatory approvals to complete the share exchange agreement. Accordingly, We did not obtain any reports, opinions, or appraisals relating to the fairness of the transaction because we deemed it an unnecessary and costly expense given the nature of the transaction.
MoneyLogix Group is a development stage capital investment company focussed on opportunistic acquisitions in the real estate market. MoneyLogix Group focus is creating value through timely acquisitions, investing in high-yielding value enhancement tactics, and executing the best exit strategies for each unique investment property in Canada, USA and other international countries.
It is MoneyLogix' intent to use its capital for the acquisition of undervalued residential and commercial real estate and zoned property and, with limited redevelopment, sell the acquired property at a substantial profit in the future when real estate values return to historical norms or better.
Where ever possible, we will lease acquired premises to obtain rental income until such time as property values and market demands allow a divestiture of properties from our real estate portfolio that achieves a satisfactory return on investment to shareholders.
To execute the business strategy, MoneyLogix added the following individuals to its management team effective May 11th, 2009: Mike Knarr, President & Chief Executive Officer; Gary Cilevitz, Chief Financial Officer and Corporate Secretary; Tom Copeland, Executive Vice President; Adam Seanor, Executive Vice President. Concurrently, the Corporation elected Alex Haditaghi to the position of Chairman of the Board effective August 11, 2009. The Board of Directors consist of Alex Haditaghi, Mike Knarr and Gary Cilevitz as at May 11th, 2009 and are currently searching for independent directors. Majid Haditaghi resigned effectively May 12, 2009 as an officer and director.
On May 20, 2009 the Company acquired all of the stock of 2131059 Ontario Limited. The acquired business 100% owns an approximately 100 acre property in Barrie, Ontario, Canada which it is developing. The purchase price for 2131059 was approximately $23,000,000 (Canadian $26,300,000) which was funded by assumption of Mortgages Payable of $7,567,647(Canadian $8,630,000), Accounts Payable of $175,000(Canadian $200,000) and the issuance of 8,775,000 restricted common shares of MoneyLogix at $1.75 (Canadian $2.00) per share.
During the past two years, other than the share exchange agreement described here-to-fore, there has not been any negotiations, transactions or material contracts between the Company and MoneyLogix Inc. regarding a merger, consolidation, acquisition, tender offer, election of directors or sale/transfer of material assets of either company.
The Company’s corporate offices are at 260 Edgeley Blvd, Suite 12, Concord, Ontario L4K 3Y4. Our current contact information for our office is telephone number: (905) 761-1400.
Results of Operations
The Company reported no revenue from operations during the three month and six month period ending June 30, 2009. Comparatively, the Company reported no revenue from operations during the three month and six month period ending June 30, 2008.
The Company incurred expenses of $563,080 for the three month period ending June 30, 2009 and $565,330 for the six month period ending June 30, 2009. The expenses consist primarily of professional fees and office and general in regards to setting up the company and doing the necessary filings. Stock compensation expense and consulting and payroll fees are for management to commence operations in the necessary period. Comparatively, for the three month period and six month period ending June 30, 2008, the Company incurred professional fees expenditures of $23,814. The Company reported total operating expenses of $924,242 period from December 7, 2007 (the inception date.) to June 30, 2009
The Company recorded a Net Loss for the three month period and six month period ending June 30, 2009 of $563,080 and $565,330 with a comparative net loss for 2008 of $23,814 for both periods. For the period from December 7, 2007 (inception date) to June 30, 2009, the Company recorded a cumulative Net Loss of $924,242
Liquidity and Capital Resources
At June 30, 2009, we had $26,485 of cash and total assets of $22,767,496. Comparatively at December 31, 2008, we had zero cash and zero total assets.
At June 30, 2009, we had Liabilities of $8,312,469. Comparatively at December 31, 2008, the Company had $17,812 in accrued liabilities for a total of $17,812 in liabilities.
As there are no current revenues from operating activities, the Company must presently rely upon the issuance of common stock and additional capital contributions from shareholders and/or loans from shareholders and third-party lenders to meet our working capital needs. It is expected by management that the Company will need to rely upon new capital contributions to pay the accrued liabilities.
Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, and revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Going Concern
The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the three month period ending June 30, 2009, the Company incurred a Net Loss of $563,080 and for the six month period ending June 30, 2008 the Company incurred a Net Loss of $565,330. Certain conditions noted below raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is contingent upon its ability to secure additional debt or equity financing, initiate sales of its services and achieve profitable operations. Management’s plan is to secure additional funds through future debt or equity financings. Such financing may not be available or may not be available on reasonable terms to the Company. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
Off-Balance Sheet Arrangements
None.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.
ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2009. This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the quarterly Form 10-Q has been made known to them.
For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure, controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by in our reports filed under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based upon an evaluation conducted for the period ended June 30, 2009, our Chief Executive and Chief Financial Officer as of June 30, 2009 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:
| · | Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction. |
| · | Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control. |
In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.
This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report.
Changes in Internal Controls over Financial Reporting
We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of June 30, 2009. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3 .. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5: OTHER INFORMATION
None.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
31.1 Certification of the CEO and CFO Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
On May 19, 2009 the Company filed a Form 8K announcing the new management and the board of directors.
On May 27, 2009, the Company filed a Form 8K disclosing the purchase of a 100 acre development project in Barrie, Ontario, Canada.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
| MONEYLOGIX GROUP, INC. | |
| | | |
| By: | /s/ Mike Knarr | |
| | Mike Knarr | |
| | President and Chief Executive Officer | |
| | | |
Dated: August 14, 2009
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.
| NAME | | TITLE | | DATE |
| | | | | |
| /s/ Mike Knarr | | President and Chief Executive Officer | | August 14, 2009 |
| Mike Knarr | | | | |
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
JUNE 30, 2009
CONTENTS
| | | Page |
| FINANCIAL STATEMENTS | | |
| Condensed Consolidated Balance Sheets | | F3 |
| Condensed Consolidated Statements of Operations | | F4 |
| Condensed Consolidated Statements of Cash Flows | | F5 |
| Condensed Consolidated Statement of Stockholders’ Deficit | | F6 |
| Notes to the Condensed Consolidated Financial Statements | | F7 - F15 |
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
| | | June 30, 2009 (Unaudited) | | | December 31, 2008 | |
| ASSETS | | | | | | |
| Current Assets | | | | | | | | |
| Property undergoing development | | $ | 22,638,019 | | | | - | |
| Cash | | | 26,485 | | | | - | |
| Due from Baywood Homes Partnership(note 5) | | | 102,992 | | | | - | |
| | | | | | | | | |
| Total Assets | | $ | 22,767,496 | | | $ | - | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Mortgage Payable(note 6) | | $ | 7,353,040 | | | $ | - | |
| Accounts Payable and accrued liabilities | | | 352,554 | | | | 17,812 | |
| Stock Compensation Liability(note 8) | | | 408,000 | | | | - | |
| Advances from related party(note 7) | | | 198,875 | | | | - | |
| Total Liabilities | | | 8,312,469 | | | | 17,812 | |
| Stockholders' Deficit | | | | | | | | |
| Preferred Stock, $10 par value; 100,000 shares authorized, none issued (Note 10) | | | - | | | | - | |
| Capital stock, $.001 par value; 100,000,000 shares authorized; 89,538,586 issued and outstanding (Note 10) | | | 89,539 | | | | 80,764 | |
| Additional Paid in Capital | | | 15,655,876 | | | | 275,056 | |
| Stock subscription receivable | | | - | | | | (14,720 | ) |
| Other Comprehensive Loss | | | (366,146 | ) | | | - | |
| Deficit accumulated during the development stage | | | (924,242 | ) | | | (358,912 | ) |
| Total Stockholders' Deficit | | | 14,455,027 | | | | (17,812 | ) |
| Total Liabilities and Stockholders' Deficit | | $ | 22,767,496 | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| | | | | | | | | | | | | | | For the Period | |
| | | | | | | | | | | | | | | from December 7, | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | | 2007 (inception) | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | | | to June 30, 2009 | |
| | | (Unaudited) | | | | - | | | (Unaudited) | | | | - | | | | |
| | | | | | | | | | | | | | | | | | |
| REVENUES | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Professional Fees | | | 39,992 | | | | 23,814 | | | | 42,242 | | | | 23,814 | | | | 68,990 | |
| Office and General | | | 33,198 | | | | | | | | 33,198 | | | | - | | | | 33,198 | |
| Stock Compensation expense | | | 408,000 | | | | - | | | | 408,000 | | | | - | | | | 408,000 | |
| Consulting and Payroll Fees | | | 81,890 | | | | - | | | | 81,890 | | | | - | | | | 163,490 | |
| Cost of Reorganization | | | | | | | | | | | | | | | | | | | 250,564 | |
| TOTAL OPERATING EXPENSES | | | 563,080 | | | | 23,814 | | | | 565,330 | | | | 23,814 | | | | (924,242 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| NET LOSS | | $ | (563,080 | ) | | $ | (23,814 | ) | | $ | (565,330 | ) | | $ | (23,814 | ) | | $ | (924,242 | ) |
| Foreign Currency Translation | | | (366,146 | ) | | | - | | | | (366,146 | ) | | | - | | | | (366,146 | ) |
| COMPREHENSIVE LOSS | | | (929,226 | ) | | | (23,814 | ) | | | (931,476 | ) | | | (23,814 | ) | | | (1,290,388 | ) |
| Net loss per share - basic and diluted | | $ | (0.01 | ) | | $ | - | | | $ | (0.01 | ) | | $ | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average number of shares | | | | | | | | | | | | | | | | | | | | |
| outstanding - basic and diluted | | | 85,541,086 | | | | 80,247,933 | | | | 87,513,586 | | | | 80,123,967 | | | | | |
The accompanying notes are an integral part of these financial statements.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| | | Sic Months Ended June 30, 2009 | | | Six Months Ended June 30, 2008 | | | For the Period from Inception (December 7, 2007) to June 30, 2009 | |
| | | | | | | | | | |
| Cash Flows from Operating Activities | | | | | | | | | |
| Net loss | | | (565,330 | ) | | | (23,814 | ) | | $ | (924,242 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
| Non-Cash consulting fees | | | - | | | | - | | | | 81,600 | |
| Non-Cash Cost of Reorganization | | | - | | | | - | | | | 250,564 | |
| Expenses paid by Stockholder | | | - | | | | 15,564 | | | | 8,936 | |
| Stock subscription receivable(services) | | | 14,720 | | | | - | | | | 14,720 | |
| Stock compensation expense | | | 408,000 | | | | - | | | | 408,000 | |
| Accounts Payable and accrued liabilities | | | 47,100 | | | | 8,250 | | | | 64,912 | |
| | | | | | | | | | | | | |
| Net Cash Used in Operating Activities | | | (95,510) | | | | - | | | | (95,510 | ) |
| | | | | | | | | | | | | |
| Cash Flows from Investing Activities | | | | | | | | | | | | |
| Increase in Property undergoing development | | | (60,131 | ) | | | - | | | | (60,131 | ) |
| Cash acquired on purchase of subsidiary | | | 1,460 | | | | - | | | | 1,460 | |
| | | | | | | | | | | | | |
| Net Cash Provided by Investing Activities | | | (58,671 | ) | | | - | | | | (58,671 | ) |
| | | | | | | | | | | | | |
| Cash Flows from Financing Activities | | | | | | | | | | | | |
| Due from Shareholder | | | 198,875 | | | | - | | | | 198,875 | |
| Decrease in Mortgage Payable | | | (34,240 | ) | | | - | | | | (34,240 | ) |
| Due from Baywood Homes Partnership | | | 8,560 | | | | - | | | | 8,560 | |
| | | | | | | | | | | | | |
| Net Cash Provided by Financing Activities | | | 173,195 | | | | - | | | | 173,195 | |
| | | | | | | | | | | | | |
| Foreign Exchange on Balances | | | 7,471 | | | | - | | | | 7,471 | |
| | | | | | | | | | | | | |
| Net Increase in Cash and Cash Equivalents | | | 26,485 | | | | - | | | | 26,485 | |
| | | | | | | | | | | | | |
| Cash and Cash Equivalents - Beginning of Period | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Cash and Cash Equivalents - End of Period | | $ | 26,485 | | | $ | - | | | $ | 26,485 | |
| Supplemental Cash Flow Information | | | | | | | | | | | | |
| Interest paid | | $ | 116,583 | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
| Income taxes paid | | $ | - | | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
MONEYLOGIX GROUP, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM THE DATE OF INCEPTION
(DECEMBER 7, 2007) TO JUNE 30, 2009
| | | Common Stock | | | Preferred Stock | | | Additional Paid-In | | | Stock Subscription | | | Accumulated Other Comprehensive | | | Deficit Accumulated During the Development | | | Total Stockholders' | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Receivable | | | Loss | | | Stage | | | Deficit | |
| Issuance of common stock for services | | | 65,280,000 | * | | $ | 65,280 | | | | - | | | $ | - | | | $ | 16,320 | | | $ | - | | | $ | - | | | | - | | | $ | 81,600 | |
| Issuance of common stock | | | 14,720,000 | * | | $ | 14,720 | | | | - | | | $ | - | | | $ | - | | | $ | (14,720 | ) | | $ | - | | | | - | | | $ | - | |
| Net loss | | | - | | | $ | - | | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | | (86,600 | ) | | $ | (86,600 | ) |
| Balance, December 31, 2007 | | | 80,000,000 | | | $ | 80,000 | | | | - | | | $ | - | | | | 16,320 | | | $ | (14,720 | ) | | $ | - | | | | (86,600 | ) | | $ | (5,000 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| May 28, 2008 Common Shares Outstanding to former HomeLife, Inc. Shareholders | | | 563,586 | | | $ | 564 | | | | - | | | $ | - | | | | 250,000 | | | $ | - | | | $ | - | | | | - | | | $ | 250,564 | |
| June 13, 2008 Issuance to former MoneyLogixInc. Shareholder | | | 200,000 | | | $ | 200 | | | | - | | | $ | - | | | | (200 | ) | | $ | - | | | $ | - | | | | - | | | $ | - | |
| September 17, 2008 – Invoices Paid by Shareholder | | | - | | | $ | - | | | | - | | | $ | - | | | | 1,436 | | | $ | - | | | $ | - | | | | - | | | $ | 1,436 | |
| May 28, 2008 Preferred Shares Outstanding of Former HomeLife, Inc. Shareholders | | | - | | | $ | - | | | | 1,500 | | | $ | 15,000 | | | | - | | | $ | - | | | $ | - | | | | - | | | $ | 15,000 | |
| September 25, 2008 – Preferred Shares Cancelled | | | - | | | $ | - | | | | (1,500 | ) | | $ | (15,000 | ) | | | - | | | $ | - | | | $ | - | | | | - | | | $ | (15,000 | ) |
| November 18, 2008 - Invoice Paid | | | - | | | | - | | | | | | | | | | | | 7,500 | | | | | | | | - | | | | - | | | | 7,500 | |
| Net Loss | | | - | | | $ | - | | | | - | | | $ | - | | | | - | | | $ | - | | | $ | - | | | | (272,312 | ) | | $ | (272,312 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2008 | | | 80,763,586 | | | $ | 80,764 | | | | - | | | $ | - | | | | 275,056 | | | $ | (14,720 | ) | | $ | - | | | | (358,912 | ) | | $ | (17,812 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| May 20, 2009 Purchase of 2031059 Ontario Limited | | | 8,775,000 | | | | 8,775 | | | | - | | | | - | | | | 15,380,820 | | | | - | | | | - | | | | - | | | | 15,389,595 | |
| June 30, 2009 Stock subscription exchanged for services | | | - | | | | - | | | | - | | | | - | | | | - | | | | 14,720 | | | | - | | | | - | | | | 14,720 | |
| Foreign Currency Translation | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (366,146 | ) | | | - | | | | (366,146 | ) |
| Net Loss | | | - | | | $ | - | | | | - | | | $ | - | | | | - | | | $ | - | | | $ | - | | | | (565,330 | ) | | $ | (565,330 | ) |
| Balance, June 30, 2009 | | | 89,538,586 | | | $ | 89,539 | | | | - | | | $ | - | | | | 15,655,876 | | | $ | - | | | $ | (366,146 | ) | | | (924,242 | ) | | $ | (14,445,027 | ) |
* Share and per share amounts reflect the effect of the May 28, 2008 reorganization.
The accompanying notes are an integral part of these financial statements.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 1. | NATURE OF OPERATIONS AND ORGANIZATION |
Nature of Operations
MoneyLogix Group, Inc. ("MoneyLogix" or the “Company”), (formerly Homelife, Inc.), which registered a change of name with the State of Nevada on January 29, 2008 was formerly know as Homelife, Inc. and is organized under the laws of the State of Nevada.
MoneyLogix are presently conducted through the Company’s subsidiaries, MoneyLogix Group, Inc(an Ontario, Canada company) and 2131059 Ontario Limited(“2131059’)(an Ontario, Canada company). MoneyLogix Group is a development stage capital investment company focussed on opportunistic acquisitions in the real estate market. MoneyLogix Group focus is creating value through timely acquisitions, investing in high-yielding value enhancement tactics, and executing the best exit strategies for each unique investment property in Canada, USA and other international countries.
MoneyLogix Group, Inc. entered into a share exchange agreement on January 3, 2008 with MoneyLogix Inc., a Delaware private corporation. The reverse merger transaction effected a change of control of the Company. The accounting acquirer is MoneyLogix, Inc. and the historical operations of the Company are the operations of MoneyLogix, Inc. Pursuant to the terms of the share exchange agreement, the parties agreed to the following:
| 1. | Mr. Cimerman, the former Company Chief executive and majority shareholder, agreed to transfer 458,000 shares of the Company to the Company treasury in exchange for the spin off of all assets and liabilities of the Company to Mr. Cimerman. This was executed at closing on May 28, 2008. Mr. Cimerman still had a shareholder loan to be satisfied by the Company; |
| 2. | MoneyLogix Group agreed to change the name of the Company from Homelife, Inc. to MoneyLogix Group, Inc. This was executed on January 29th , 2008; |
| 3. | MoneyLogix Group agreed to issue 100,000,000 shares of our common stock to MoneyLogix Inc. in exchange for 100% of MoneyLogix Inc.’s issued and outstanding stock. 80,000,000 shares of the Company were issued on May 28, 2008 to MoneyLogix Inc. 100% of the shares of MoneyLogix Inc. were transferred to MoneyLogix Group making MoneyLogix Inc. a wholly owned subsidiary of the Company on May 28, 2008. On June 13, 2008, 200,000 additional shares of the Company were issued to MoneyLogix Inc. shareholders. 19,800,000 shares of the Company are still to be transferred to MoneyLogix Inc. shareholders, post agreement closure on May 28, 2008, pending changes to the number of shares authorized for issuance; |
| 4. | MoneyLogix Inc. agreed to pay to the Company $250,000 for the satisfaction of all outstanding debt of the Company, including the outstanding amount owing to Mr. Cimerman. MoneyLogix Inc. made payment of $250,000 to an agreed upon trust agent on May 28, 2008, to be released to the Company upon on the complete satisfaction of all the terms of the agreement. The cash occurred between shareholders and did not run through Moneylogix, Inc., therefore this is a non cash transaction included in Capital in the accompanying Statements of Stockholder’s Deficit. |
| 5. | The Company will effect a 22 to 1 reverse split of the Company’s stock. The 22 to 1 reverse stock split took place on May 28, 2008; |
| 6. | Following the 22 to 1 reverse stock split, MoneyLogix Group agreed to issue 490,310 shares of common stock (post 22-for-1 reverse stock split) to Mr. Cimerman, the former Company Chief executive and majority shareholder, in consideration for Mr. Cimerman retiring a certain portion of debt the Company owes him and cancelling 10,000 of Our Class A preferred shares and 50 of Our Class AA Preferred Shares held by Mr. Cimerman. It was agreed that the 490,310 shares issued to Mr. Cimerman shall be restricted and locked up for transfer and monetization for 24 months. The 490,310 shares of common stock are included in the total 563,586 shares dated May 28, 2008 as Common Shares Outstanding to Former Homelife, Inc. Shareholders in the accompanying Statements of Stockholder’s Deficit. |
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
The Company has not earned any revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development Stage Enterprises (“SFAS No. 7 “). Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' deficit and cash flows disclose activity since the date of the Company's inception.
These financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet is obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
| 4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America. Presented below are those policies considered particularly significant:
Interim Financial Statements
The accompanying interim unaudited financial information has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. The interim financial statements should be read in conjunction with the Company's annual financial statements, notes and accounting policies included in the Company's annual report on form 10 K for the year ended December 31, 2008 as filed with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, are necessary to present fairly the financial position of the Company as of June 30, 2009 and the related operating results and cash flows for the interim period presented have been made. The results of operations of such interim period are not necessarily indicative of the results of the full year.
Basis of Consolidation and Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company, its wholly-owned subsidiaries MoneyLogix Group, Inc and 2131059 Ontario Limited Inc. All significant inter-company transactions and balances have been eliminated upon consolidation.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) |
Comprehensive Income or Loss
The Company adopted SFAS No. 130, “Reporting Comprehensive Income.” SFAS No. 130 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income is presented in the statements of stockholders’ deficit, and consists of net loss and unrealized gains (loss) on available for sale marketable securities; foreign currency translation adjustments and changes in market value of future contracts that qualify as a hedge; and negative equity adjustments recognized in accordance with SFAS No. 87. SFAS No. 130 requires only additional disclosures in the financial statements and does not affect the Company’s financial position or results of operations.
Concentration of Credit Risk
SFAS No. 105, “Disclosure of Information About Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentration of Credit Risk”, requires disclosure of any significant off-balance sheet risk and credit risk concentration. The Company does not have significant off-balance sheet risk or credit concentration.
Earnings or Loss Per Share
The Company accounts for earnings per share pursuant to SFAS No. 128, Earnings per Share , which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.
There were no dilutive financial instruments for the period from December 7, 2007 (inception) to June 30, 2009.
Financial Instruments
In accordance with Statement of Financial Accounting Standards ("SFAS") SFAS No. 107, "Disclosures About Fair Value of Financial Instruments" ("SFAS No. 107"), the estimated fair value of financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair value. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange. As of June 30, 2009, the carrying value of accounts payable and accrued liabilities, advances from related party, and Mortgage Payable approximate their fair value because of the limited terms of these instruments.
In accordance with Statement of Financial Accounting Standards ("SFAS") SFAS No. 157, “Defining Fair Value Measurement” ("SFAS No. 157"), the Company adopted the standard which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements
Foreign Currency Translation
The Company accounts for foreign currency translation pursuant to SFAS No. 52, “Foreign Currency Translation”. The Company’s functional currency is the Canadian dollar. All assets and liabilities are translated into United States dollars using the exchange rates prevailing at the end of the period. Revenues and expenses are translated using the average exchange rates prevailing throughout the year.
Unrealized foreign exchange amounts resulting from translations at different rates according to their nature are included in accumulated other comprehensive income.
Realized foreign currency transaction gains and losses are recognized in operations.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) |
Income Taxes
The Company accounts for income taxes pursuant to SFAS No. 109, Accounting for Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.
Impairment of Long-lived Assets
In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell. As described in note 3, the long-lived assets have been valued on a going concern basis; however, substantial doubt exists as to the ability of the Company to continue as a going concern. If the Company ceases operations, the asset values may be materially impaired.
Property undergoing development
In accordance with Statement of Financial Accounting Standards No. 34, “Capitalization of Interest Cost” (“SFAS 34”) and Statement of Financial Accounting Standards No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects” (“SFAS 67”), we capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a project. Pursuant to SFAS 34 and SFAS 67, capitalization of construction, development and redevelopment costs is required while activities are ongoing to prepare an asset for its intended use. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Costs previously capitalized related to abandoned acquisitions or development opportunities are written off. Should development, redevelopment or construction activity cease, interest, property taxes, insurance and certain costs would no longer be eligible for capitalization, and would be expensed as incurred
In accordance with SFAS 144, we classify a property as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition, subject only to the terms that are usual and customary; (3) an active program to locate a buyer, and other actions required to complete the plan to sell, have been initiated; (4) the sale of the property is probable and is expected to be completed within one year; (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as “held for sale”, its operations, including any interest expense directly attributable to it, are classified as discontinued operations in our consolidated statements of income and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. A loss is recognized for any initial adjustment of the asset’s carrying amount to fair value less costs to sell in the period the asset qualifies as “held for sale”. Depreciation of assets ceases upon designation of a property as “held for sale”.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) |
Stock-Based Compensation
In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, Share-Based Payment ("SFAS No. 123R"). SFAS No. 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123R requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued.
Use of Estimates
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 the 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. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.
Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (R) Business Combinations. SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after 15 December 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company's financial statements.
In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS 160 on its financial statements but does not expect it to have a material effect.
In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 161, " Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”. SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS 161 on its financial statements but does not expect it to have a material effect.
In May 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
in Conformity With Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.
In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 163, " Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60 " (“SFAS 163”). SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS 163 on its financial statements but does not expect it to have a material effect.
In May 2009, the FASB issued SFAS No.165, “Subsequent Events,” which establishes general standards for accounting for disclosure of events that occur after the balance sheet day but before the financial statement are issued or are available to be issued. The pronouncement requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, whether that date represents the date the financial statements were issued or were available to be issued. SFAS 165 is effective with interim and annual financial periods ending after June 15, 2009. Management has evaluated the impact of the adoption of SFAS 165 and it has no impact the Company’s results of operations, financial position or cash flows.
In July 2009, the FASB issued SFAS No. 168, “FASB Accounting Standards Codification (“SFAS 168’), as the single source of authoritative nongovernmental U.S. generally accepted accounting principles(GAAP). The Codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is non-authoritative. Management is currently evaluating the impact of the adoption of SFAS 168 but does not expect the adoption of SFAS 168 to impact the Company’s result of operation, financial position or cash flows.
| 5. | ACQUISITION OF 2131059 ONTARIO LIMITED |
On May 20, 2009 the Company acquired all of the stock of 2131059 Ontario Limited. The acquired business 100% owns an approximately 100 acre property in Barrie, Ontario, Canada which it is developing.
The purchase price for 2131059 was approximately $23million (Canadian $26,300,000) which was funded by assumption of Mortgages Payable of $7,568,000(Canadian $8,630,000), Accounts Payable of $175,000(Canadian $200,000) and the issuance of 8,775,000 restricted common shares of MoneyLogix at $1.75(Canadian $2.00) per share.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| 5. | ACQUISITION OF 2131059 ONTARIO LIMITED(cont’d) |
| | | At May 20, 2009 | |
| | | | |
| Property under Development | | $ | 23,113,000 | |
| Cash and Other Assets | | | 3,500 | |
| Accounts Receivable | | | 130,000 | |
| Total assets acquired | | | 23,246,500 | |
| | | | | |
| Mortgages Payable | | | 7,568,000 | |
| Accounts Payable | | | 289,500 | |
| Total Liabilities acquired | | | 7,857,500 | |
| | | | | |
| Net assets acquired | | | 15,389,000 | |
| | | | | |
| Stock Issued to sellers [8,775,000@$1.7538 US} | | | 15,389,000 | |
| Net assets acquired | | $ | 15,389,000 | |
The above table comprises our supplemental disclosure of non-cash investing and financing activities.
The following table represents MoneyLogix proforma consolidated results of operations as if the acquisition of 2131059 had occurred at the beginning of each period presented. Such results have been prepared by adjusting the historical MoneyLogix results to include 2131059 results of operations The proforma results do not include any cost savings or additional sales that may result from the combination of MoneyLogix and
2131059 operations. The proforma results may not necessarily reflect the consolidated operations that would have existed had the acquisition been completed at the beginning of such periods nor are they necessary indicative of future results.
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, 2009 | | | June 30, 2008 | | | June 30, 2009 | | | June 30, 2008 | |
| | | | | | | | | | | | | |
| Revenue | | | - | | | | - | | | | - | | | | - | |
| Total Operating Expenses | | $ | 563,080 | | | $ | 23,814 | | | $ | 565,330 | | | $ | 23,814 | |
| Net Loss | | $ | (563,080 | ) | | $ | (23,814 | ) | | $ | (565,330 | ) | | $ | (23,814 | ) |
| Net Loss per share- basis and diluted | | $ | (0.01 | ) | | $ | - | | | $ | (0.01 | ) | | $ | - | |
| Weighted average number of shares-basis and diluted | | | 89,583,586 | | | | 89,022,933 | | | | 89,583,586 | | | | 88,898,967 | |
| | | | | | | | | | | | | | | | | |
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
| | | June 30, 2009 | | | December 31, 2008 | |
| Mortgage notes payable (a) | | $ | 5,641,040 | | | $ | - | |
| Mortgage notes payable (b) | | | 1,027,200 | | | | - | |
| Mortgage notes payable (c) | | | 684,800 | | | | - | |
| | | | | | | | | |
| Totals | | $ | 7,353,040 | | | $ | - | |
| (a) | Mortgage note payable to Firm Capital payable in monthly installments, bearing interest at a floating rate at the greater of 10.75% per annum or the Toronto Dominion Interest rate plus 4.00%. The term is 1 year expiring October 1, 2009 with $20,000 principal payments per month being calculated on a declining balance method. This mortgage note is secured by a first mortgage interest in a real estate property in Ontario, Canada. |
| (b) | Mortgage note payable to Sora Development Corp payable in monthly installments of interest only, at a rate at of 10% per annum. The mortgage is currently month to month and has been guaranteed by an unrelated third party. This mortgage note is secured by a second mortgage interest in a real estate property in Ontario, Canada. |
| (c) | Mortgage note payable to C-1 Holdings Inc. payable in monthly installments of interest only, at a rate at of 10% per annum. The mortgage is currently month to month and has been guaranteed by an unrelated third party. This mortgage note is secured by a third mortgage interest in a real estate property in Ontario, Canada. |
| 7. | ADVANCES FROM RELATED PARTY |
Amounts due from a related party are non-interest bearing, due on demand and have no fixed repayment terms.
| 8. | STOCK COMPENSATION LIABILITY |
The Company has recorded stock compensation liability for its Company Management and Officers in the amount of $408,000 for 800,000 shares in regards to their employment agreements. The shares will be issued in May 2010.
MONEYLOGIX GROUP, INC.
[Formerly Known as Homelife, Inc.]
(A Development Stage Company)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009
The Company accounts for income taxes in accordance with SFAS No. 109. SFAS No. 109 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The effects of future changes in tax laws or rates are not anticipated.
Under SFAS No. 109 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.
The Company has income tax losses available to be applied against future years income as a result of the losses incurred since inception. However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax payments. Accordingly a 100% valuation allowance has been recorded for income tax losses available for carry forward.
a) Authorized
100,000 Class A Preferred shares of no par value, 6% non-cumulative dividend, voting, convertible to common shares at the option of the shareholder at a price equal to the face value of the Class A shares. Each Class A Preferred share carries 1,000 votes as compared with 1 vote for each Common share. There were no shares issued and outstanding at June 30, 2009 and December 31, 2008.
100,000,000 Common shares of $0.001 par value
Issued
| | | June 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| Shares Issued and Outstanding | | | 89,538,586 | | | | 80,763,586 | |
| | | $ | 89,539 | | | $ | 80,764 | |
Subsequent to the quarter end, the company issued 5 million shares and took back a mortgage in the amount of approximate $819,000 to cancel an obligation to issue 19,800,000 as discussed in Note 1, item 3
