Nevada | 13-4362274 | |
State of Incorporation | IRS Employer Identification No. |
Large accelerated filer
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o |
Accelerated filer
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o |
Non-accelerated filer
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o |
Smaller reporting company
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x |
(Do not check if a smaller reporting company)
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PART I – Financial Information |
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Item 1. |
Financial Statements
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3 | |||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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19 | |||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
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21 | |||
Item 4. |
Controls and Procedures
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21 | |||
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PART II – Other Information | |||||
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Item 1. |
Legal Proceedings
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22 | |||
Item 1A. |
Risk Factors
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22 | |||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
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22 | |||
Item 3. |
Defaults Upon Senior Securities
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22 | |||
Item 4. |
Mine Safety Disclosures
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22 | |||
Item 5. |
Other Information
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22 | |||
Item 6. |
Exhibits
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23 |
Iconic Brands, Inc. and Subsidiary
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(a development stage company)
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Consolidated Balance Sheets
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March 31,
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December 31,
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|||||||
2013
|
2012
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|||||||
(Unaudited)
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||||||||
Assets
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | - | $ | - | ||||
Current assets of discontinued operations (see Note 8)
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- | - | ||||||
Total current assets
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- | - | ||||||
Total assets
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$ | - | $ | - | ||||
Liabilities and Stockholders' Deficiency
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||||||||
Current liabilities:
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||||||||
Current portion of debt
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$ | 259,304 | $ | 294,040 | ||||
Accounts payable
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91,637 | 92,009 | ||||||
Accrued interest on Iconic Brands, Inc. debt
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30,379 | 77,233 | ||||||
Current liabilities of discontinued operations (see Note 8)
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- | 3,690,823 | ||||||
Total current liabilities
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381,320 | 4,154,105 | ||||||
Long term debt
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- | 71,869 | ||||||
Long term debt of discontinued operations (see Note 8)
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- | 1,477,338 | ||||||
Series B preferred stock, $2.00 per share stated value; designated 1,000,000 shares,
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||||||||
issued and outstanding 916,603 and 916,603 shares, respectively
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1,833,206 | 1,833,206 | ||||||
Total liabilities
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2,214,526 | 7,536,518 | ||||||
Stockholders' deficiency:
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Preferred stock, $.00001 par value; authorized 100,000,000 shares,
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Series A, designated 1 share, issued and outstanding 1 and 1 shares, respectively
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1 | 1 | ||||||
Common stock, $.00001 par value; authorized 100,000,000 shares,
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||||||||
issued and committed to be issued and outstanding 54,361,412 and 54,361,412 shares, respectively
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544 | 544 | ||||||
Additional paid-in capital
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8,955,666 | 8,955,666 | ||||||
Accumulated deficit prior to development stage period
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(16,124,330 | ) | (16,124,330 | ) | ||||
Retained earnings (accumulated losses) during the development stage period January 1, 2011 to March 31, 2013
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4,953,593 | (368,399 | ) | |||||
Total stockholders' deficiency
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(2,214,526 | ) | (7,536,518 | ) | ||||
Total liabilities and stockholders' deficiency
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$ | - | $ | - |
Iconic Brands, Inc. and Subsidiary
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|||||
(a development stage company)
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Consolidated Statements of Operations
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|||||
(Unaudited)
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Three Months Ended
March 31, |
Development Stage
Period January 1, 2011to March 31,
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2013
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2012
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2013
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Sales
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$ | - | $ | - | $ | - | ||||||
Expenses:
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Professional fees
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21,500 | - | 99,620 | |||||||||
Other general and administrative expenses (including stock-based compensation of $0, $4,535 and $36,282, respectively)
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- | 2,881 | 42,629 | |||||||||
Interest expense on Iconic Brands, Inc. debt (including amortization of debt discounts of $3,490, $4,122 and $36,466, respectively)
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10,009 | 11,509 | 101,514 | |||||||||
Total expenses
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31,509 | 14,390 | 243,763 | |||||||||
Loss from continuing operations
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(31,509 | ) | (14,390 | ) | (243,763 | ) | ||||||
Income (loss) from discontinued operations (see Note 8)
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5,353,501 | (19,746 | ) | 5,197,356 | ||||||||
Net income (loss)
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$ | 5,321,992 | $ | (34,136 | ) | $ | 4,953,593 | |||||
Basic income (loss) per common share:
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||||||||||||
Continuing operations
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Discontinued operations
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0.10 | (0.00 | ) | |||||||||
Total
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$ | 0.10 | $ | (0.00 | ) | |||||||
Diluted income (loss) per common share:
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||||||||||||
Continuing operations
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Discontinued operations
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0.00 | (0.00 | ) | |||||||||
Total
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$ | 0.00 | $ | (0.00 | ) | |||||||
Weighted average number of common shares outstanding:
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||||||||||||
Basic
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54,361,412 | 54,361,412 | ||||||||||
Diluted | 13,126,483,801 | 54,361,412 |
Iconic Brands, Inc. and Subsidiary
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(a development stage company)
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Consolidated Statements of Cash Flows
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(Unaudited)
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Three Months Ended
March 31, |
Development Stage
Period January 1, 2011
to March 31,
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2013
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2012
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2013
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Cash flows from operating activities
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Net income (loss)
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$ | 5,321,992 | $ | (34,136 | ) | $ | 4,953,593 | |||||
Loss (income) from discontinued operations
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(5,353,501 | ) | 19,746 | (5,197,356 | ) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities:
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Amortization of debt discounts charged to interest expense
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3,490 | 4,122 | 36,466 | |||||||||
Stock -based compensation
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- | 4,535 | 36,282 | |||||||||
Legal, audit and accounting, and consulting fees paid by two lenders on behalf of the Company
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6,872 | - | 81,162 | |||||||||
Changes in operating assets and liabilities:
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Accounts payable
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(372 | ) | (1,654 | ) | 8,796 | |||||||
Accrued expenses and other current liabilities
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6,519 | 7,387 | 65,048 | |||||||||
Net cash used in operating activities - continuing operations
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(15,000 | ) | - | (16,009 | ) | |||||||
Net cash provided by operating activities - discontinued operations
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- | - | 784 | |||||||||
Net cash used in operating activities
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(15,000 | ) | - | (15,225 | ) | |||||||
Cash flows from investing activities
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||||||||||||
Loans from continuing operations to discontinued operations
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- | - | - | |||||||||
Net cash provided by (used in) investing activities - continuing operations
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- | - | - | |||||||||
Net cash provided by (used in) investing activities - discontinued operations
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- | - | - | |||||||||
Net cash provided by (used in) investing activities
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- | - | - | |||||||||
Cash flows from financing activities:
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||||||||||||
Increases in debt
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15,000 | - | 15,000 | |||||||||
Repayment of debt
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- | - | - | |||||||||
Net cash provided by (used in) financing activities - continuing operations
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15,000 | - | 15,000 | |||||||||
Net cash provided by (used in) financing activities - discontinued operations
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- | - | - | |||||||||
Net cash provided by (used in) financing activities
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15,000 | - | 15,000 | |||||||||
Decrease in cash and cash equivalents
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- | - | (225 | ) | ||||||||
Cash and cash equivalents, beginning of period
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- | - | 225 | |||||||||
Cash and cash equivalents, end of period
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- | - | - | |||||||||
Less cash and cash equivalents of discontinued operations at end of period
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- | - | - | |||||||||
Cash and cash equivalents of continuing operations at end of period
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$ | - | $ | - | $ | - | ||||||
Supplemental disclosures of cash flow information:
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Interest paid
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$ | - | $ | - | $ | - | ||||||
Income taxes paid
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$ | - | $ | - | $ | - | ||||||
Non-cash, operating, investing and financing activities:
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Legal, audit and accounting, and consulting fees paid by two lenders on behalf of the Company
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$ | 6,872 | $ | - | $ | 81,162 | ||||||
Shares of common stock issued to noteholders in satisfaction of debt and accrued interest
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$ | - | $ | - | $ | 3,500 |
Numerator:
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Net income – basic
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$ | 5,321,992 | ||
Add: Interest expense on convertible notes
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10,069 | |||
Net income – diluted
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$ | 5,332,061 | ||
Denominator:
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Weighted average shares outstanding – basic
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54,361,412 | |||
6% convertible notes and accrued interest
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3,533,200,000 | |||
12% convertible notes and accrued interest
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9,487,000,000 | |||
Series B preferred stock owned by Capstone Capital Group I, LLC
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50,922,389 | |||
Warrants
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1,000,000 | |||
Weighted average shares outstanding - diluted
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13,126,483,801 |
March 31,
2013
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December 31,
2012
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Convertible promissory note, interest at 7%, due September 13, 2014, net of
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unamortized discount of $0 and $28,131, respectively
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(A)
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$ | - | $ | 71,869 | ||||
Loans payable, interest at 0%, due on demand
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(C)
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144,112 | 137,540 | ||||||
Convertible promissory note, interest at 6%, due June 30, 2010
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(B)
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30,000 | 30,000 | ||||||
Convertible promissory notes, interest at 12%, due June 30, 2010
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(B)
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70,000 | 70,000 | ||||||
Convertible promissory note, interest at 8% (default rate of 22%), due
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|||||||||
February 7, 2011 (in default)
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(A)
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- | 56,500 | ||||||
Convertible promissory note, interest at 9%, due January 31, 2014, net of
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|||||||||
unamortized discount of $1,308 at March 31, 2013
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(D)
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15,192 | - | ||||||
Total
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259,304 | 365,909 | |||||||
Less current portion of debt
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(259,304 | ) | (294,040 | ) | |||||
Long term debt
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$ | - | $ | 71,869 |
Three Months ended March 31,
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Year Ended December 31,
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2013 |
2012
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2011
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Legal fees
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$ | 2,500 | $ | 5,270 | $ | 27,500 | ||||||
Audit and accounting fees
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2,500 | 7,500 | 17,500 | |||||||||
Company’s stock transfer agent
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1,872 | 10,432 | - | |||||||||
Consulting fees
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- | 2,038 | 4,050 | |||||||||
Total
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$ | 6,872 | $ | 25,240 | $ | 49,050 |
Past due
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$ | 100,000 | ||
Year ending March 31, 2014
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160,612 | |||
Total
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260,612 | |||
Less debt discounts
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(1,308 | ) | ||
Net
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$ | 259,304 |
March 31,
2013
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December 31,
2012
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Convertible note, interest at 7%
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$ | - | $ | 23,088 | ||||
Convertible note, interest at 6%
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5,332 | 4,889 | ||||||
Convertible notes, interest at 12%
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24,877 | 22,805 | ||||||
Convertible note, interest at 8% (default rate of 22%)
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- | 26,451 | ||||||
Convertible note, interest at 9%
|
170 | - | ||||||
Total
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$ | 30,379 | $ | 77,233 |
March 31,
2013
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December 31,
2012
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Promissory note, interest at 20%, due January 29, 2009 (in default)
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$ | - | $ | 100,000 | ||||
Convertible promissory notes, interest at 10%, due October 25, 2007
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||||||||
to November 27, 2007 (in default) (A)
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- | 75,000 | ||||||
Promissory notes, interest at 13%, due May 31, 2010 (in default) (B)
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- | 220,000 | ||||||
Due Donald Chadwell (5% stockholder at December 31, 2012), interest at 0%,
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||||||||
no repayment terms
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- | 763,000 | ||||||
Due Richard DeCicco (officer, director and 29% stockholder at December 31,
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2012) and affiliates, interest at 0%, no repayment terms
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- | 714,338 | ||||||
Convertible notes, interest at 7% (default rate of 14%), due August 27, 2012
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||||||||
to November 27, 2012 (in default) (A)
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- | 150,000 | ||||||
Total
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- | 2,022,338 | ||||||
Less current portion of debt
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- | (545,000 | ) | |||||
Long term debt
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$ | - | $ | 1,477,338 |
March 31,
2013
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December 31,
2012
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Convertible note, interest at 7%
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$ | - | $ | 69,877 | ||||
Promissory note, interest at 20%
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- | 70,080 | ||||||
Promissory notes, interest at 13%
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- | 87,736 | ||||||
Convertible promissory notes, interest at 10%
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- | 47,270 | ||||||
Total
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$ | - | $ | 274,963 |
1)
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24,909 shares were issued to Harbrew Florida stockholders,
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2)
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19,634,112 shares valued at $1,963,411 were issued to Company management and employees for services, including 15,972,359 shares to the Company’s Chief Executive Officer, 100,000 shares to the Company’s Chief Financial Officer, and 2,586,753 shares to Donald Chadwell,
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3)
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2,086,973 shares valued at $208,697 were issued to Danny DeVito and affiliates for services,
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4)
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4,606,307 shares were issued to noteholders in satisfaction of $2,125,625 of debt and $177,529 of accrued interest, and
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5)
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1,000,000 shares were issued to Capstone as part of the Termination Agreement.
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Number of Shares
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||||
April 19, 2010 satisfaction of $455,635 debt in exchange for Company commitment to issue to the respective 5 creditors a total of 4,556,350 shares of its common stock and 4,556,350 three year warrants exercisable at $0.20 per share
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4,556,350 | |||
April 19, 2010 commitment to issue 250,000 shares of its common stock to a noteholder in consideration of the noteholder’s extension of the due date from March 31, 2010 to May 31, 2010 of a $110,000 promissory note
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250,000 | |||
Total
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4,806,350 |
March 31,
2013
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March 31,
2012
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Federal income tax benefit attributable to:
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Net operating loss carryover
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$ | 3,798,051 | $ | 5,556,669 | ||||
Less: variation allowance
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$ | 3,798,051 | $ | 5,556,669 | ||||
Net provision for Federal income taxes
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$ | 0 | $ | 0 |
Stock
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Options
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Warrants
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|||||||
Outstanding at December 31, 2010
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1,300,000 | 20,722,184 | ||||||
Granted and Issued
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- | - | ||||||
Exercised
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- | - | ||||||
Forfeited/expired/cancelled
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(300,000 | ) | (1,400,000 | ) | ||||
Outstanding at December 31, 2011
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1,000,000 | 19,322,184 | ||||||
Granted and issued
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- | - | ||||||
Exercised
|
- | - | ||||||
Forfeited/expired/cancelled
|
- | (5,162,500 | ) | |||||
Outstanding at December 31, 2012
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1,000,000 | 14,159,684 | ||||||
Granted and issued
|
- | - | ||||||
Exercised
|
- | - | ||||||
Forfeited/expired/cancelled
|
- | (385,000 | ) | |||||
Outstanding at March 31, 2013
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1,000,000 | 13,774,684 |
Date
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Number
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Number
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Exercise
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Expiration
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|||||||||||||||
Granted
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Outstanding
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Exercisable
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Price
|
Date
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January 1, 2008
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1,000,000 | - | $ | 0.10 |
(a)
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June 30, 2013
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|||||||||||||
Total
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1,000,000 | - |
Date
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Number
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Number
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Exercise
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Expiration
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|||||||||
Issued
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Outstanding
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Exercisable
|
Price
|
Date
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June 10, 2008
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27,500 | 27,500 | $ | 1.00 |
June 10, 2013
|
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June 10, 2008
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27,500 | 27,500 | $ | 1.50 |
June 10, 2013
|
||||||||
June 10, 2008
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25,000 | 25,000 | $ | 1.00 |
December 10, 2013
|
||||||||
June 10, 2008
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25,000 | 25,000 | $ | 1.50 |
December 10, 2013
|
||||||||
June 11, 2008
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30,000 | 30,000 | $ | 1.00 |
December 11, 2013
|
||||||||
June 11, 2008
|
30,000 | 30,000 | $ | 1.50 |
December 11, 2013
|
||||||||
July 2, 2008
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110,000 | 110,000 | $ | 1.00 |
January 2, 2014
|
||||||||
July 2, 2008
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110,000 | 110,000 | $ | 1.50 |
January 2, 2014
|
||||||||
July 23, 2008
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50,000 | 50,000 | $ | 1.00 |
January 23, 2014
|
||||||||
July 23, 2008
|
50,000 | 50,000 | $ | 1.50 |
January 23, 2014
|
||||||||
August 11, 2008
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1,000,000 | 1,000,000 | $ | 1.00 |
August 11, 2013
|
||||||||
August 12, 2009
|
400,000 | 400,000 | $ | 1.00 |
August 12, 2014
|
||||||||
August 12, 2009
|
533,334 | 533,334 | $ | 1.50 |
August 12, 2014
|
||||||||
August 19, 2009
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1,000,000 | 1,000,000 | $ | 0.01 |
August 19, 2014
|
||||||||
August 19, 2009
|
1,000,000 | 1,000,000 | $ | 1.00 |
August 19, 2014
|
||||||||
September 14, 2009
|
200,000 | 200,000 | $ | 1.00 |
September 14, 2014
|
||||||||
September 14, 2009
|
200,000 | 200,000 | $ | 1.50 |
September 14, 2014
|
||||||||
January 6, 2010
|
100,000 | 100,000 | $ | 0.22 |
January 6, 2015
|
||||||||
January 13, 2010
|
100,000 | 100,000 | $ | 0.23 |
January 13, 2015
|
||||||||
February 8, 2010
|
500,000 | 500,000 | $ | 1.00 |
February 8, 2015
|
||||||||
February 8, 2010
|
500,000 | 500,000 | $ | 1.50 |
February 8, 2015
|
||||||||
March 16, 2010
|
2,000,000 | 2,000,000 | $ | 0.25 |
March 16, 2015
|
||||||||
April 15, 2010
|
1,200,000 | 1,200,000 | $ | 0.20 |
April 15, 2013
|
||||||||
April 19, 2010
|
4,556,350 | 4,556,350 | $ | 0.20 |
April 19, 2013
|
||||||||
Total
|
13,774,684 | 13,774,684 |
2013
|
2012
|
|||||||
Revenues
|
$ | - | $ | - | ||||
Cost of goods sold
|
- | - | ||||||
Gross profit
|
- | - | ||||||
Selling, general and administrative expenses
|
- | - | ||||||
Operating income
|
- | - | ||||||
Gain from United States Bankruptcy Court discharge of indebtedness
|
5,366,639 | - | ||||||
Interest expense (including amortization of debt discounts of $0 and $3,143, respectively)
|
(13,138 | ) | (19,746 | ) | ||||
Income (loss) before income tax provision
|
5,353,501 | (19,746 | ) | |||||
Income tax provision
|
- | - | ||||||
Income (loss) from discontinued operations
|
$ | 5,353,501 | $ | (19,746 | ) |
2013
|
2012
|
|||||||
Assets
|
||||||||
Current assets
|
$ | - | $ | - | ||||
Total assets
|
$ | - | $ | - | ||||
Liabilities
|
||||||||
Current portion of debt
|
$ | - | $ | 545,000 | ||||
Accounts payable
|
- | 1,219,768 | ||||||
Accrued interest payable
|
- | 274,963 | ||||||
Other accrued expenses and other current liabilities
|
- | 1,651,092 | ||||||
Current liabilities
|
- | 3,690,823 | ||||||
Long – term debt
|
- | 1,477,338 | ||||||
Total liabilities
|
- | 5,168,161 | ||||||
Net liabilities
|
$ | - | $ | (5,168,161 | ) |
Exhibit No.
|
Description
|
|
31.1
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Rule 13a-14(a)/15d-14(a) Certifications of Richard DeCicco, President, Principal Executive, Financial and Accounting Officer
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32.1
|
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Section 1350 Certifications of Richard DeCicco, President, Principal Executive, Financial and Accounting Officer
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101.INS **
|
XBRL Instance Document
|
|
101.SCH **
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL **
|
XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
|
XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
|
XBRL Taxonomy Extension Presentation Linkbase Document
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|
ICONIC BRANDS, INC. | ||
|
|||
Dated: June 10, 2013
|
By: |
/s/ Richard DeCicco
|
|
Name: | Richard DeCicco | ||
Title: | President (Principal Executive, Financial and Accounting Officer) |