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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wisdom Homes of America Inc (CE) | USOTC:WOFA | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada | 43-2041643 | |
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
26497 Rancho Parkway South
Lake Forest, CA
|
92630
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o |
Smaller reporting company
|
x |
(Do not check if a smaller reporting company)
|
PART I – FINANCIAL INFORMATION | |||||
ITEM 1
|
Financial Statements
|
4 | |||
ITEM 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
24 | |||
ITEM 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
34 | |||
ITEM 4
|
Controls and Procedures
|
34 | |||
PART II – OTHER INFORMATION | |||||
ITEM 1
|
Legal Proceedings
|
36 | |||
ITEM 1A
|
Risk Factors
|
36 | |||
ITEM 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
36 | |||
ITEM 3
|
Defaults Upon Senior Securities
|
36 | |||
ITEM 4
|
Mine Safety Disclosures
|
36 | |||
ITEM 5
|
Other Information
|
36 | |||
ITEM 6
|
Exhibits
|
37 |
ITEM 1
|
Financial Statements
|
SEARCHCORE, INC.
|
Condensed Consolidated Balance Sheets
|
SEARCHCORE, INC.
|
Condensed Consolidated Statements of Operations (Unaudited)
|
Three Months Ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2013
|
2012
|
|||||||
REVENUE
|
||||||||
Sales
|
$ | 26,891 | $ | 3,613,339 | ||||
Total revenue
|
26,891 | 3,613,339 | ||||||
OPERATING EXPENSES
|
||||||||
Cost of sales
|
228 | 184,955 | ||||||
Selling, general and administrative expenses
|
664,518 | 2,679,630 | ||||||
Total operating expenses
|
664,746 | 2,864,585 | ||||||
Operating Income (loss)
|
(637,855 | ) | 748,754 | |||||
Other Income (Expense)
|
||||||||
Gain on change in fair value of earn-out liabilities
|
— | 2,964,115 | ||||||
Interest income
|
6,506 | — | ||||||
Interest expense
|
(152 | ) | (13,245 | ) | ||||
Total other income
|
6,354 | 2,950,870 | ||||||
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
|
(631,501 | ) | 3,699,624 | |||||
Provision for Income Taxes
|
— | 217,000 | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
(631,501 | ) | 3,482,624 | |||||
Loss from discontinued operations, net of zero and $39,000 tax benefit for the three months ended March 31, 2013 and 2012, respectively.
|
(7,777 | ) | (58,859 | ) | ||||
NET INCOME (LOSS)
|
$ | (639,278 | ) | $ | 3,423,765 | |||
Income (loss) per share, Basic and Diluted
|
||||||||
Income (loss) from continuing operations
|
$ | (0.01 | ) | $ | 0.04 | |||
Income (loss) from discontinued operations
|
0.00 | (0.00 | ) | |||||
Total income (loss) per share
|
$ | (0.01 | ) | $ | 0.04 | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
54,529,477 | 83,331,465 |
SEARCHCORE, INC.
|
Condensed Consolidated Statements of Cash Flows
|
Three Months Ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
$ | (639,278 | ) | $ | 3,423,765 | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Depreciation
|
1,184 | 98,467 | ||||||
Amortization
|
35,792 | 44,418 | ||||||
Gain on change in fair value of earn-out liabilities
|
— | (2,878,073 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
— | (11,161 | ) | |||||
Inventories
|
— | 9,830 | ||||||
Prepaid expenses and deposits
|
212,588 | (138,131 | ) | |||||
Other assets
|
293,494 | 51,976 | ||||||
Accounts payable and accrued liabilities
|
(1,125 | ) | 124,127 | |||||
Net cash (used in) provided by operating activities
|
(97,345 | ) | 725,218 | |||||
Cash flows used in investing activities:
|
||||||||
Purchases of property and equipment
|
(10,561 | ) | (106,131 | ) | ||||
Purchases of intangible assets
|
(85,260 | ) | (196,943 | ) | ||||
Net cash used in investing activities
|
(95,821 | ) | (303,074 | ) | ||||
Cash flows from financing activities:
|
||||||||
Payments on note payable
|
(22,500 | ) | (176,893 | ) | ||||
Payments on note payable - related party
|
— | (325,000 | ) | |||||
Net cash used in financing activities
|
(22,500 | ) | (501,893 | ) | ||||
Net decrease in cash and cash equivalents
|
(215,666 | ) | (79,749 | ) | ||||
Cash and cash equivalents at beginning of period
|
514,382 | 1,512,590 | ||||||
Cash and cash equivalents at end of period
|
$ | 298,716 | $ | 1,432,841 | ||||
Non-cash investing and financing activity:
|
||||||||
Shares issued pursuant to stock based compensation
|
$ | 27,000 | $ | — | ||||
Shares issued pursuant to MMJMenu acquisition
|
$ | — | $ | 262,000 |
SEARCHCORE, INC.
|
Condensed Consolidated Statements of Stockholders' Equity (Deficit)
|
Preferred Stock
|
Common Stock
|
Treasury Stock
|
Additional
Paid-In
|
Accumulated (Deficit) |
Total
Shareholders’
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Earnings |
Equity (Deficit)
|
||||||||||||||||||||||||||||
BALANCES, December 31, 2011
|
—
|
—
|
83,140,256
|
$
|
83,140
|
—
|
$
|
—
|
$
|
(15,965,044
|
) |
$
|
(2,871,925
|
) |
$
|
(18,753,829
|
) | |||||||||||||||||||
Issuance of common stock, MMJmenu
|
200,000
|
200
|
261,800
|
262,000
|
||||||||||||||||||||||||||||||||
Issuance of common stock, WeedMaps earnouts
|
6,000,000
|
6,000
|
9,114,000
|
9,120,000
|
||||||||||||||||||||||||||||||||
Issuance of common stock, ChangeWave
|
250,000
|
250
|
127,250
|
127,500
|
||||||||||||||||||||||||||||||||
Issuance of common stock, stock-based compensation
|
150,000
|
150
|
55,350
|
55,500
|
||||||||||||||||||||||||||||||||
Treasury stock, retirements
|
(9,190,693
|
) |
(9,191
|
) |
(9,191
|
) | ||||||||||||||||||||||||||||||
Treasury stock, purchases
|
(42,581,596
|
) |
(42,581
|
) |
(4,604,774
|
) |
(4,647,355
|
) | ||||||||||||||||||||||||||||
Net income from continuing operations | 15,263,771 | 15,263,771 | ||||||||||||||||||||||||||||||||||
BALANCES, December 31, 2012
|
—
|
—
|
80,549,563
|
$
|
80,549
|
(42,581,596
|
) |
$
|
(42,581
|
) |
$
|
(11,011,418
|
) |
$
|
12,391,846
|
$
|
1,418,396
|
|||||||||||||||||||
Issuance of common stock, stock-based compensation
|
60,000
|
60
|
26,940
|
27,000
|
||||||||||||||||||||||||||||||||
Treasury stock, retirements
|
(42,581,596
|
) |
(42,581
|
) |
42,581,596
|
42,581
|
-
|
|||||||||||||||||||||||||||||
Net loss from continuing operations
|
(639,278
|
) |
(639,278
|
) | ||||||||||||||||||||||||||||||||
BALANCES, March 31, 2013
|
—
|
—
|
38,027,967
|
$
|
38,028
|
—
|
$
|
—
|
$
|
(10,984,478
|
) |
$
|
11,752,568
|
$
|
806,118
|
Level 1
|
Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2
|
Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
|
Level 3
|
Inputs to the valuation methodology are unobservable and significant to the fair value.
|
|
March 31,
|
December 31,
|
||||||
Property and Equipment
|
2013
|
2012
|
||||||
Furniture and Computer Equipment
|
$ | 21,872 | $ | 11,310 | ||||
Less: Accumulated Depreciation
|
(7,377 | ) | (6,192 | ) | ||||
Property and Equipment, net
|
$ | 14,495 | $ | 5,118 |
March 31,
|
December 31,
|
|||||||
Intangible Assets
|
2013
|
2012
|
||||||
Domain names
|
$ | 1,030,903 | $ | 805,643 | ||||
Web software
|
429,503 | 429,503 | ||||||
Trademarks
|
1,000 | 1,000 | ||||||
Goodwill
|
59,060 | 59,060 | ||||||
Subtotal
|
$ | 1,520,466 | $ | 1,295,206 | ||||
Accumulated amortization
|
(35,792 | ) | — | |||||
Total intangible Assets
|
$ | 1,484,674 | $ | 1,295,206 |
Intangible assets subject to amortization:
|
Amount
|
Useful life
|
Weighted-average amortization period
|
|||||||||
Web software
|
$ | 429,503 | 3 | 3 | ||||||||
Total intangible assets subject to amortization
|
$ | 429,503 | 3 |
Intangible assets not subject to amortization
|
Amount
|
|||
Domain Names and trademarks
|
$ | 1,031,903 | ||
Goodwill
|
59,060 | |||
Total intangible assets not subject to amortization
|
$ | 1,090,963 |
Summary of our premium and non-premium domain names
|
Amount
|
|||
Sportify.com
|
$ | 10,000 | ||
Karate.com and Rodeo.com
|
500,000 | |||
ToyHaulers.com
|
31,000 | |||
TravelTrailer.com
|
51,000 | |||
ModularHomes.com
|
141,000 | |||
Manufacturedhome.com and Manufacturedhouse.com
|
50,000 | |||
Manufacturedhomes.com
|
130,000 | |||
Manufacturedhomes.net
|
14,000 | |||
Various other non-premium domain names
|
104,000 | |||
Total premium and non premium domain names
|
$ | 1,031,000 |
March 31,
|
December 31,
|
|||||||
Accrued liabilities
|
2013
|
2012
|
||||||
Tax payable
|
$ | 2,094,000 | $ | 2,144,000 | ||||
Obligations on stock based compensation
|
— | 27,000 | ||||||
Obligations on marketing agreements
|
27,000 | 27,000 | ||||||
Payroll liabilities
|
21,000 | 21,000 | ||||||
Obligations on insurance
|
77,000 | — | ||||||
Total accrued liabilities
|
$ | 2,219,000 | $ | 2,219,000 |
Notes payable - current portion
|
March 31,
2013
|
December 31,
2012
|
||||||
Sportify
|
$ | 29,000 | $ | 54,000 | ||||
Rodeo.com/Karate.com promissory note
|
222,000 | 400,000 | ||||||
ToyHaulers.com
|
13,000 | - | ||||||
TravelTrailer.com
|
30,000 | - | ||||||
ModularHomes.com
|
75,000 | - | ||||||
$ | 369,000 | $ | 454,000 |
Notes payable - noncurrent portion
|
March 31,
2013
|
December 31,
2012
|
||||||
Sportify
|
$ | 25,000 | $ | - | ||||
Rodeo.com/Karate.com promissory note
|
178,000 | - | ||||||
$ | 203,000 | $ | - |
Summary of all notes payable
|
March 31,
2013
|
December 31,
2012
|
||||||
Sportify
|
$ | 54,000 | $ | 54,000 | ||||
Rodeo.com/Karate.com promissory note
|
400,000 | 400,000 | ||||||
ToyHaulers.com
|
13,000 | - | ||||||
TravelTrailer.com
|
30,000 | - | ||||||
ModularHomes.com
|
75,000 | - | ||||||
$ | 572,000 | $ | 454,000 |
Notes payable - related party
|
March 31,
2013
|
December 31,
2012
|
||||||
Current portion
|
$ | 86,000 | $ | 161,000 | ||||
Noncurrent portion
|
76,000 | - | ||||||
$ | 162,000 | $ | 161,000 |
March 31,
2013
|
December 31,
2012
|
|||||||
Current
|
||||||||
Federal
|
$ | - | $ | 1,184,225 | ||||
State
|
- | 285,075 | ||||||
- | 1,469,300 | |||||||
Deferred
|
||||||||
Federal
|
(218,000 | ) | 895,000 | |||||
State
|
(37,000 | ) | 186,000 | |||||
(255,000 | ) | 1,081,000 | ||||||
Change in valuation allowance
|
255,000 | (68,000 | ) | |||||
Total provision
|
$ | - | $ | 2,482,300 |
March 31,
2013
|
December 31,
2012
|
|||||||
Deferred income tax assets:
|
||||||||
State taxes
|
$ | 129,000 | $ | 129,000 | ||||
Net operating losses
|
530,000 | 434,000 | ||||||
Accruals and other
|
8,000 | 8,000 | ||||||
667,000 | 571,000 |
Office share payments
|
Minimum
Payments
|
Monthly
Base Rent
|
||||||
2013
|
$
|
72,000
|
$
|
8,000
|
||||
2014
|
$
|
96,000
|
$
|
8,000
|
Outstanding
|
Exercisable
|
||||||||||||||
Exercise
Price
|
Number
Outstanding
|
|
Weighted Average
Remaining Contractual Life (years)
|
|
Weighted Exercise
Price Average
|
Number
Exercisable
|
|
Weighted Average
Exercise Price
|
|||||||
$ | 4 |
250,000
|
|
|
1.62
|
|
$ |
4
|
250,000
|
|
$
|
4
|
ITEM 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
-
|
Clear focus and strategic direction:
scale the proven paid content model to specifically identified industry niches;
|
|
-
|
Valuable internet real estate in attractive industry verticals:
ensure the portfolio is comprised of highly attractive pieces of internet real estate (i.e. premium domain names and supporting domain names) in underserved but large markets;
|
|
-
|
Highly experienced, in-house sales staff with proven consultative sales capabilities:
having sales personnel that can manage, advise and consult with business owners;
|
|
-
|
State-of-the-art, multi-channel technology platform:
depth of technical knowledge/ability to adapt and benefit from the ever evolving state of search and digital marketing technologies; and
|
|
-
|
Established culture that fosters client service, innovation and adaptability:
individual accountability and innovation.
|
Quarters Ended
|
||||||||
March 31,
2013
|
March 31,
2012
|
|||||||
|
||||||||
Sales
|
$ | 27,000 | $ | 3,613,000 | ||||
Total revenue
|
27,000 | 3,613,000 | ||||||
Total operating expenses
|
665,000 | 2,865,000 | ||||||
|
||||||||
Operating income
|
$ | (638,000 | ) | $ | 748,000 |
Quarters Ended
|
||||||||
March 31,
2013
|
March 31,
2012
|
|||||||
|
||||||||
Average number of clients
|
20 | 1,137 | ||||||
Total clients at the end of the period
|
53 | 1,271 |
March 31,
2013
|
December 31,
2012
|
|||||||
(unaudited)
|
(audited)
|
|||||||
Cash
|
$ | 299,000 | $ | 514,000 | ||||
Total current assets
|
1,809,000 | 2,237,000 | ||||||
Intangible assets:
|
||||||||
Domain names
|
1,031,000 | 806,000 | ||||||
Trademarks
|
1,000 | 1,000 | ||||||
Web software
|
394,000 | 430,000 | ||||||
Goodwill
|
59,000 | 59,000 | ||||||
Total intangible assets
|
1,485,000 | 1,296,000 | ||||||
Total assets
|
4,673,000 | 5,196,000 | ||||||
Total current liabilities
|
2,905,000 | 3,094,000 | ||||||
Total long term liabilities
|
961,000 | 683,000 | ||||||
Total liabilities
|
$ | 3,867,000 | $ | 3,777,000 |
ITEM 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4
|
Controls and Procedures
|
ITEM 1
|
Legal Proceedings
|
ITEM 1A
|
Risk Factors
|
ITEM 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
ITEM 3
|
Defaults Upon Senior Securities
|
ITEM 4
|
Mine Safety Disclosures
|
ITEM 5
|
Other Information
|
ITEM 6
|
Exhibits
|
2.1 (1)
|
Agreement and Plan of Reorganization dated December 11, 2012.
|
|
2.2 (1)
|
Securities Purchase Agreement dated December 31, 2012.
|
|
3.1 (1)
|
Amended and Restated Articles of Incorporation of General Cannabis, Inc.
|
|
3.2 (1)
|
Certificate of Amendment to Articles of Incorporation
|
|
3.3 (1)
|
Bylaws of General Cannabis, Inc.
|
|
10.1 (1)
|
Management Agreement dated January 21, 2013
|
|
10.2 (1)
|
Escrow Instructions and Agreement re: modularhomes.com
|
|
10.3 (2)
|
Domain Name Purchase Agreement re: traveltrailer.com
|
|
10.4 (2)
|
Domain Name Purchase Agreement re: toyhaulers.com
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
32.1
|
Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Schema Document
|
|
101.CAL*
|
XBRL Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Definition Linkbase Document
|
|
101.LAB*
|
XBRL Lables Linkbase Document
|
|
101.PRE*
|
XBRL Presentation Linkbase Document
|
(1)
|
Incorporated by reference from our Registration Statement on Form 10 dated January 29, 2013 and filed with the Commission on January 30, 2013.
|
(2)
|
Incorporated by reference from our First Amended Registration Statement on Form 10/A dated March 27, 2013 and filed with the Commission on March 28, 2013.
|
SearchCore, Inc . | |||
Dated: May 15, 2013
|
/s/ James Pakulis
|
||
By: |
James Pakulis
|
||
Its: |
President and Chief Executive Officer
|
1 Year Wisdom Homes of America (CE) Chart |
1 Month Wisdom Homes of America (CE) Chart |
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