Annual report pursuant to Section 13 and 15(d)

SEGMENTS OF BUSINESS

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SEGMENTS OF BUSINESS
 12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
13. SEGMENTS OF BUSINESS

 

The Company is organized into two segments as of the end of 2011 and 2010.

 

Management and consulting services ("Management")

 

The Company provides management and consulting services for small companies which are generally seeking to become publicly traded. The Company also provides management and investment services for Investors LLC, Investors II and other unaffiliated companies.

 

Operation of restaurants ("Restaurants")

 

At December 31, 2011, the Company has majority ownership of four restaurants and a management company in South Africa. Three of the restaurants and the management company were operating at December 31, 2011 and the fourth restaurant opened in February 2012. Majority ownership was acquired effective September 30, 2011 and these operations are consolidated with the Company’s other operations since that date. At December 31, 2011, the Company has 49% ownership of two restaurants in Australia, one of which opened in January 2012 and the second is under construction and expected to open in the second quarter of 2012. The operations in Australia will be accounted for using the equity method. The Company has also begun activity in Hungary, Brazil and Europe, but has not finalized any arrangement.

 

Financial information regarding the Company's segments is as follows for 2011 and 2010.

 

Year ended December 31, 2011 (restated)

 

    Management     Restaurants     Total  
                   
Revenues   $ 496,402     $ 980,247     $ 1,476,649  
                         
Interest expense   $ 118,995     $ 64,472     $ 183,467  
                         
Depreciation and amortization   $ 8,013     $ 71,529     $ 79,542  
                         
Profit (loss)   $ (1,035,763 )   $ (228,258 )   $ (1,264,021 )
Investments and other                     -  
Non-controlling interest                     101,307  
                    $ (1,162,714 )
                         
Assets   $ 950,966     $ 2,762,782     $ 3,713,748  
Investments                     1,084,951  
                    $ 4,798,699  
                         
Liabilities   $ 3,327,318     $ 985,613     $ 4,312,931  
                         
Expenditures for non-current assets   $ 2,808     $ 217,003     $ 219,811  

 

Year ended December 31, 2010

 

    Management     Restaurants     Total  
                   
Revenues   $ 136,301     $ -     $ 136,301  
                         
Interest expense   $ 140,016     $ -     $ 140,016  
                         
Depreciation and amortization   $ 11,079     $ -     $ 11,079  
                         
Profit (loss)   $ (949,904 )   $ 58,337     $ (891,567 )
Investments and other                     (138,351 )
Non-controlling interest                     18,353  
                    $ (1,011,565 )
                         
Assets   $ 208,261     $ 87,200     $ 295,461  
Investments                     1,119,098  
                    $ 1,414,559  
                         
Liabilities   $ 1,332,134     $ -     $ 1,332,134  
                         
Expenditures for non-current assets   $ 4,517     $ -     $ 4,517  

 

The following is revenues and long-lived assets by geographic area as of and for the years ended December 31:

 

Revenue:   2011     2010  
United States   $ 496,402     $ 136,301  
South Africa     980,247       -  
    $ 1,476,649     $ 136,301  

 

Long-lived assets, end of year:   2011     2010  
United States   $ 1,649,049     $ 1,168,641  
South Africa     1,835,411       87,200  
Australia     672,175       -  
Brazil     101       -  
    $ 4,156,736     $ 1,255,841  

 

The Company used multiple foreign currency exchange rates during the periods presented. For South Africa, for the Statements of Operations we used average rates for the period ranging from 7.94-8.17 Rands per USD, and for the Balance Sheet current assets and liabilities were at 8.12 and non-current assets and liabilities ranging from 6.93-8.07. For Australia, for the Statement of Operations we used an average rate of 1.02 USD per AUD and for the balance sheet we used 1.06 for current assets and liabilities, and 1.02 for non-current assets and liabilities.