Kallo Inc. (KALO)

[Signus]

1. A year ago FE assumes liability for all Kallo debts in exchange for post r/s common shares
2. So liabilities removed from BS and Kallo becomes debt free
3. One year + later - post r/s shares issues to FE and to BoD as payment/bonus
4. Employees, CRA and suppliers r still owed money
5. Supplier gets a judgement for money owed them & Kallo accrues for judgement amount.

QUESTIONS:

1. Why did Kallo have to accrue for the judgement amount?
2. Did not FE assume liability for ALL debts?
3. A year+ later it appears no employees/CRA/consultants/suppliers have been paid. So they have to sue and Kallo will accrue for the judgement amount and rebook the losses? As per item 5 above

This sucks! This is not business which accounting principles r this company following?