UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 30, 2010
NUVILEX, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 333-68008 | 62-1772151 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 7702 E. Doubletree Ranch Rd, Suite #300, Scottsdale, AZ | 85541 |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code (480) 348-8050
EFOODSAFETY.COM, INC.
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 4 - Matters Related to Accountants and Financial Statements
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
In conjunction with the Company’s change of registered certified public accountant, a re-examination of the Company’s financial statements for the year ending April 30, 2009 and the application of generally accepted accounting principles for the application of the purchase method of accounting has caused the Company to restate its April 30, 2009 balance sheet, results of operations and cashflows for the year then ended. As part of this reevaluation the Company obtained a third party valuation analysis and purchase price allocation of the Freedom-2 Holdings, Inc. acquisition. An analysis of the restated April 30, 2009 balance sheet, results of operations and cashflows for the year then ended is as follows.
|
| April 30, 2009 | |||
|
| As Reported | Adjustment |
| As Restated |
| Cash | $ 603,727 | $ - |
| $ 603,727 |
| Marketable securities | 31,185 | - |
| 31,185 |
| Accounts receivable - net | 156,312 | - |
| 156,312 |
| Inventory | 117,095 | - |
| 117,095 |
| Prepaid expenses | 214,418 | - |
| 214,418 |
| Current portion of loan receivable | 60,000 | - |
| 60,000 |
| Total Current Assets | 1,182,737 | - |
| 1,182,737 |
|
|
|
|
|
|
| Property, plant and equipment - net | 2,643,875 | (152,745) | 1 | 2,491,130 |
| Goodwill | 2,113,412 | 33,141 | 4 | 2,146,553 |
| Intangible assets | 857,025 | (682,981) | 2,3 | 174,044 |
| Other non-current assets |
|
|
|
|
| Loan receivable, net of current portion | 45,000 | - |
| 45,000 |
| Total Assets | $ 6,842,049 | $ (802,585) |
| $ 6,039,464 |
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
| Accounts payable | $ 209,942 | $ - |
| $ 209,942 |
| Accrued expenses | 223,459 | - |
| 223,459 |
| Current portion of long-term debt | 485,395 | 135,000 | 7 | 620,395 |
| Debt discount | - | (123,904) | 5,8 | (123,904) |
| Total Current Liabilities | 918,796 | 11,096 |
| 929,892 |
|
|
|
|
|
|
| Long-term Liabilities |
|
|
|
|
| Long-term debt | 1,929,690 | 52,475 | 9,10 | 1,982,165 |
| Tenant deposits | 3,987 | - |
| 3,987 |
| Total Liabilities | 2,852,473 | 63,571 |
| 2,916,044 |
|
|
|
|
|
|
| Stockholders' Equity: |
|
|
|
|
| Preferred stock | 1 | 999,999 | 11 | 1,000,000 |
| Common stock | 24,517 | 144 | 6 | 24,661 |
| Additional paid in capital | 33,197,848 | (819,063) | 6,7,11 | 32,378,785 |
| Comprehensive income | 8,910 | - |
| 8,910 |
| Stock not yet issued | 250,000 | - |
| 250,000 |
| Accumulated deficit | (29,491,700) | (1,047,236) | 6 | (30,538,936) |
| Total Stockholders' Equity | 3,989,576 | (866,156) |
| 3,123,420 |
| Total Liabilities and Stockholders' | $ 6,842,049 | $ (802,585) |
| $ 6,039,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Twelve Months Ended April 30, 2009 | |||
|
| As Reported | Adjustment |
| As Restated |
| Revenues | $ 653,134 | $ - |
| $ 653,134 |
| Cost of revenues | 427,410 | - |
| 427,410 |
| Gross profit | 225,724 | - |
| 225,724 |
|
|
|
|
|
|
| Expenses: |
|
|
|
|
| Sales and marketing | 594,342 | - |
| 594,342 |
| Research and development | 473,514 | - |
| 473,514 |
| General and administrative | 5,199,963 | 134,836 | 3,6,10 | 5,334,799 |
| Total operating expenses | 6,267,819 | 134,836 |
| 6,402,655 |
| Net loss from operations | (6,042,095) | (134,836) |
| (6,176,931) |
|
|
|
|
|
|
| Other income (expense) |
|
|
|
|
| Interest income | 14,651 | - |
| 14,651 |
| Dividend income | 3,862 | - |
| 3,862 |
| Gain on sale of marketable securities | 9,133 | - |
| 9,133 |
| Impairment loss recognized for fixed assets | - | (857,024) | 3 | (857,024) |
| Interest expense | (27,175) | (9,296) | 10 | (36,471) |
| Total other income (expense) | 471 | (866,320) |
| (865,849) |
| Net loss | $ (6,041,624) | $ (1,001,156) |
| $ (7,042,780) |
|
|
|
|
|
|
| Loss per share |
|
|
|
|
| Basic and diluted | $ (0.03) |
|
| $ (0.03) |
|
|
|
|
|
|
| Weighted average shares outstanding |
|
|
|
|
| Basic and diluted | 227,949,900 |
|
| 201,914,344 |
2
|
|
| For the Year Ended April 30, | ||||
|
|
| As Reported |
| Adjustment |
| As Restated |
| Cash flows from operating activities: |
|
|
|
|
|
|
| Net loss |
| $ (6,041,624) |
| $ (1,001,156) |
| $ (7,042,780) |
| Adjustments used to reconcile net loss to net cash |
|
|
|
|
|
|
| provided by (used in) operating activities: |
|
|
|
|
|
|
| Stock issued to retained earnings |
| - |
| (46,080) | 6 | (46,080) |
| Comprehensive income |
| 8,910 |
| - |
| 8,910 |
| Depreciation and amortization |
| 28,830 |
| (165) | 1,2 | 28,665 |
| Common stock issued for services |
| 71,000 |
| 181,080 | 5,6 | 252,080 |
| Loss on disposal of fixed assets |
| - |
| - |
| - |
| Abandonment of intangible asset |
| 6,378 |
| - |
| 6,378 |
| Loan receivable accrued interest |
| (6,875) |
| - |
| (6,875) |
| Loss on impairment of assets |
| - |
| 857,025 | 3 | 857,025 |
| Net amortization of discount/premium |
| - |
| (1,800) | 10 | (1,800) |
| Change in assets and liabilities: |
|
|
|
|
|
|
| (Increase) decrease in accounts receivable |
| 223,484 |
| - |
| 223,484 |
| (Increase) decrease in inventory |
| 172,470 |
| - |
| 172,470 |
| (Increase) decrease in prepaid expenses |
| 4,464,625 |
| - |
| 4,464,625 |
| Increase (decrease) in accounts payable |
| (299,194) |
| - |
| (299,194) |
| Increase (decrease) in accrued expenses |
| 194,124 |
| - |
| 194,124 |
| Increase in debt discount |
| - |
| (123,904) | 7 | (123,904) |
| Increase (decrease) in short term debt |
| - |
| 135,000 | 5 | 135,000 |
| (Decrease) in deferred revenue |
| (7,500) |
| - |
| (7,500) |
| Net cash used in operating activities |
| (1,185,372) |
| - |
| (1,185,372) |
| Cash flows from investing activities: |
|
|
|
|
|
|
| Cash proceeds from acquisition of Freedom2 |
| 7,592 |
| - |
| 7,592 |
| Collection of loan receivable |
| 15,000 |
| - |
| 15,000 |
| Purchase of fixed assets |
| (5,080) |
| - |
| (5,080) |
| Proceeds from or (purchase) of marketable securities |
| (31,185) |
| - |
| (31,185) |
| Net cash provided by (used in) investing activities |
| (13,673) |
| - |
| (13,673) |
| Cash flows from financing activities: |
|
|
|
|
|
|
| Cash received for stock not issued |
| 250,000 |
| - |
| 250,000 |
| Proceeds from borrowings |
| 61,629 |
| - |
| 61,629 |
| Repayment of debt |
| (22,398) |
| - |
| (22,398) |
| Net cash provided by financing activities |
| 289,231 |
| - |
| 289,231 |
| Net decrease in cash and cash equivalents |
| (909,814) |
|
|
| (909,814) |
| Cash and cash equivalents at beginning of period |
| 1,513,541 |
|
|
| 1,513,541 |
| Cash and cash equivalents at end of period |
| $ 603,727 |
|
|
| $ 603,727 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
| Franchise and income taxes |
| $ 2,200 |
|
|
| $ 2,200 |
| Cash paid for interest |
| $ 26,508 |
|
|
| $ 26,508 |
| Stock issued for acquisition |
| $ 2,265,634 |
|
|
| $ 2,265,634 |
1.
A change in value from the originally recorded book value of $2,644,437 in Freedom-2 Holdings, Inc. property, plant and equipment to fair value of $2,489,571. The adjustment of Freedom-2 Holdings, Inc. property, plant and equipment generated a reversal of $2,120 in Q4 depreciation expense for the same assets. The depreciation reversal is reflected in a decrease in general and administrative expenses.
2.
The addition of $176,000 of intangible assets acquired from Freedom-2 Holdings, Inc. Related amortization expense of $1,956 was recorded for the fourth quarter.
3.
Impairment of $857,025 in intangible assets. The impairment is charged to impairment loss recognized for acquired and intangible assets. See Note – 8 Goodwill and Intangible Assets.
4.
A net increase to goodwill as a result in the change to fair value for property, plant & equipment, certain liabilities and the addition of the intangible assets.
5.
An increase in short term debt of $135,000 and general & administrative expenses for the issuance of a convertible note to Kurt Mussina for unpaid severance.
6.
On February 3, 2006, 1,440,000 Common Stock were issued to a shareholder and not placed on the Company’s registry. The shares are valued at $46,080 ($0.32/share). The share issuance was charged to retained earnings. The shares were issued without registration under the Securities Act of 1933, as amended, in reliance upon the exemption afforded by Section 4(2) of that Act. No underwriters were involved.
7.
Pursuant to the beneficial conversion provisions of the Mussina note (see item 4), a debt discount of $135,000 was charged to additional paid in capital in the amount of $135,000.
8.
Amortization of $11,096 of the debt discount is charged to interest expense for the month of April 2009.
9.
A net increase to long term debt as a result of adjusting certain liabilities to fair value.
10.
A net decrease to long term debt for the amortization of the discount and premium which resulted from recording the mortgage and license fee payables at fair value.
11.
A reclass of $999,999 from APIC to preferred stock in order to show the full value of the convertible preferred stock outstanding.
3
Total assets for the period ending April 30, 2009 were decreased, pursuant to the above restatements, to $6,039,464 from $6,842,049.
Results of operations for the year ended April 30, 2009 of the above restatements increased the net loss attributable to Common Stockholders by $1,001,156 for a total loss attributable to Common Stockholders for the year then ended of $7,042,780 or ($0.03 per share).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NUVILEX, INC.
(Registrant)
Date: January 31, 2011
/s/ Patricia Gruden
Patricia Gruden
Interim Chief Executive Officer
4