But, but, B&L have other pressing financial obligations to deal with before thinking of buying a $2.25M parcel of property, right?
****The Company was delinquent on certain filings and payments of required federal and state payroll taxes. The Company has provided an estimate of related penalty assessments and interest. The amount of payroll taxes, penalties and interest due at September 30, 2012 and December 31, 2011 totaled $872,270 and $797,422, respectively.****
****On August 9, 2012, the Company settled litigation with the holder of a $150,000 note bearing interest at 10% which was in default. Principal and accrued interest of the note was $300,497 as of August 9, 2012. Under the terms of the settlement, the Company will pay the note holder $300,000 with 8% interest accruing on the unpaid balance. The Company made two payments of $25,000 on August 13, 2012 and one payment of $30,000 on September 26, 2012. The Company will make 8 additional quarterly payments of $30,000 commencing on January 1, 2013 and continuing through October 1, 2014. A final payment of $4,265 is due on January 1, 2015. In the event of any default of this settlement agreement, the note holder can enter a stipulated judgment against the Company, CEO Barry Schwartz and President, Lisa Bershan, as individuals, in the amount of $1,197,190. The Company recognized a gain on settlement in the amount of $497 in the three months ending September 30, 2012.****
****The Company was and is involved in various litigation involving trade creditors, professionals and former employees. A videographer filed suit in Small Claims Court in Mercer, New Jersey for $2,000 and received a default judgment in November of 2007. The Company has contacted the plaintiff in this matter, and a settlement agreement has been reached. A materials handling company was granted a judgment for $3,654 by Superior Court of California on January 18, 2008. There has been no further collection activity on this account. A media company filed a suit to collect unpaid fees dating from October 30, 2007 of $71,033. The media company was granted a judgment for $71,033 by Los Angeles Superior Court on April 6, 2010, which is still owed by the Company. There have been no efforts on the part of the media company to collect the judgment and the Company believes that it will be able to settle the amount for a reduced final payment. Three former employees hold judgments for unpaid wages in the amounts of $9,274, $15,600 and $16,995 from labor board judgments in 2008. With penalties and accrued interest, the three labor judgments amounted to $65,184 as of September 30, 2012. An internet marketing company filed suit against the Company and agreed to arbitration which was settled for $20,000 in October of 2010. There have been no payments made on this settlement. A public relations firm obtained a judgment in the amount of $44,323 on April 9, 2010 for fees owed for services. There has been no collection activity and the Company intends to negotiate a reduced settlement of the final balance owed. An accounting firm that provided services to the company obtained a judgment through arbitration that was confirmed by the Circuit Court in West Palm Beach for $150,000 on August 25, 2010. On October 18, 2012, the Circuit Court in West Palm Beach issued a final judgment confirming the arbitration award to the plaintiff in the amount of $153,781, plus interest at $4.75% from May 5, 2010 plus attorney fees and the Company recognized a loss on settlement in the amount of $71,463 in the three months ending September 30, 2012. A grocery services company filed suit to collect $22,000 in fees for advertising services incurred in 2009. The Company has not been in contact with the Company or their legal counsel since February 22, 2011. The Company believes it will be settled for a nominal amount, if anything, based on the age of the payable. On April 6, 2010, the Company settled litigation with a former controller in which the former controller agreed to return 400,000 shares of Company stock valued at $52,000 in exchange for $8,000 and payments of $1,571 over a 27 month period. The former controller delivered the shares to an escrow agent and the escrow agent will return all of the shares to the Company once all of the payments are made to the former employee. As of September 30, 2012, the balance due the former controller was $31,432. On February 3, 2011, through mediation, the Company and a Federal Bankruptcy Trustee settled litigation with a former sales person in which the former employee would return 750,000 shares of Company stock valued at $90,000 in exchange for payments of $92,069 over a 14 month period. The Federal Bankruptcy trustee will return all of the shares to the Company once all of the payments are made to the Bankruptcy Trustee. The Company has recorded a $90,000 liability to the former sales person and a $90,000 common stock receivable for the shares being held by the bankruptcy trustee.****
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