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EXCEL - IDEA: XBRL DOCUMENT - SurePure, Inc.Financial_Report.xls
EX-32.1 - EXHIBIT 32.1 - SurePure, Inc.v345503_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - SurePure, Inc.v345503_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - SurePure, Inc.v345503_ex31-2.htm

 

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

FORM 10-Q/A

Amendment No. 1

 

 (Mark One)

 

¨ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2013

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________ to ________

 

Commission file number 000-54172

 

SUREPURE, INC.

 

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware 26-3550286
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
   
405 Lexington Avenue, 25th Floor, New York, NY 10174
(Address of Principal Executive Offices) (Zip Code)

 

(917) 368-8480
(Registrant’s Telephone Number, Including Area Code)
 
_____________________________________________
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ¨    No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ¨    No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

 

  Large accelerated filer  ¨ Accelerated filer  ¨
  Non-accelerated filer  ¨ Smaller reporting company  x
  (Do not check if a smaller reporting company)  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes x    No ¨

 

The number of shares outstanding of the issuer’s common stock, as of May 15, 2013 was 24,247,684.

 

 
 

 

EXPLANATORY NOTE

 

We are filing this Amendment No. 1 ("Form 10-Q/A-1") to our Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2013, originally filed with the Securities and Exchange Commission (the "SEC") on May 15, 2013 (the "Form 10-Q") in order to (a) to correct and add information to Note 9 of Notes to Consolidated Financial Statements for the three months ended March 31, 2013 and 2012 and (b) file the interactive data files in XBRL format required by Rule 405 of Regulation S-T and Item 601 of Regulation S-K.  These XBRL documents were inadvertently omitted on the initial Form 10-Q filing due to a technical issue by the filing agent.

 

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, each item of the Form 10-Q that is amended by this Form 10-Q/A-1 is restated in its entirety, and this Form 10-Q/A-1 is accompanied by currently dated certifications on Exhibits 31.1, 31.2, and 32.1 by our Chief Executive Officer and Chief Financial Officer.

 

Except as expressly set forth in this Form 10-Q/A-1, we are not amending any other part of the Form 10-Q. This Form 10-Q/A-1 does not reflect events occurring after the filing of the Form 10-Q or modify or update any related or other disclosures, including the forward-looking statements, unless expressly noted otherwise. Accordingly, this Form 10-Q/A-1 should be read in conjunction with the Form 10-Q and with our other filings made with the SEC subsequent to the filing of the Form 10-Q, including any amendments to those filings.

 

For reference purposes only, the index to exhibits related to Exhibit 101 (for interactive data files) is set forth below.

 

PART I

 

FINANCIAL INFORMATION

 

Item 1. Financial Statements.

     

SUREPURE, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2013 (UNAUDITED) AND DECEMBER 31, 2012

 

   March 31, 2013   December 31, 2012 
   (Unaudited)   (Audited) 
Assets          
           
Current assets:          
Cash  $19,468   $142,373 
Accounts receivable, net   21,859    19,948 
Prepaid expenses and other current assets   86,380    128,646 
Total current assets   127,707    290,967 
           
Property and equipment, net   3,255    4,616 
           
Other assets:          
Intangible assets, net   124,791    128,958 
           
Total assets  $255,753   $424,541 
           
Liabilities and Equity (Deficit)          
           
Current liabilities:          
Accounts payable  $974,916   $790,930 
Due to officers/stockholders   576,789    247,259 
Income taxes payable   394    409 
           
Total current liabilities   1,552,099    1,038,598 
           
Long-term liabilities:          
Loans from stockholders   2,965,138    3,241,768 
Other loans payable   222,312    219,549 
           
Total long-term liabilities   3,187,450    3,461,317 
           
Total liabilities   4,739,549    4,499,915 
           
Commitments and contingencies          
           
Equity (deficit):          
Stockholders’ equity (deficit):          
Common stock   23,890    23,542 
Preferred stock   226,654    226,654 
Additional paid-in capital   21,345,211    20,920,817 
Equity of variable interest entities   920,980    920,980 
Other comprehensive income   580,722    360,464 
Deficit accumulated during the development stage   (26,260,129)   (25,192,142)
Total stockholders’ equity (deficit)   (3,162,672)   (2,739,685)
           
Noncontrolling interest   (1,321,124)   (1,335,689)
           
Total Equity (Deficit)   (4,483,796)   (4,075,374)
           
Total Liabilities and Equity Deficit  $255,753   $424,541 

 

 

 

 

See notes to consolidated financial statements.

1
 

 

SUREPURE, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

AND CUMULATIVE FROM AUGUST 24, 2005 (INCEPTION) TO MARCH 31, 2013

 

           Cumulative From 
   Three Months Ended   August 24, 2005 
   March 31,   (inception) to 
   2013   2012   March 31, 2013 
   (Unaudited)   (Unaudited)   (Unaudited) 
Sales  $36,355   $28,706   $2,300,765 
                
Cost of sales   7,565    5,293    1,545,061 
                
Gross profit   28,790    23,413    755,704 
                
Expenses:               
General and administrative expenses   1,013,648    786,270    21,406,155 
Promotion and marketing   28,731    37,537    620,117 
Research and development   33,566    16,537    3,662,866 
Depreciation and amortization   5,528    5,744    181,627 
Impairment of patent   -    -    537,631 
                
Total expenses   1,081,473    846,088    26,408,396 
                
Loss from operations   (1,052,683)   (822,675)   (25,652,692)
                
Other income (expense):               
Interest income   3    14    371,861 
Interest expense   (79,173)   (115,121)   (2,536,399)
Exchange rate gains and losses   (776)   -    (26,163)
Loss on disposition of fixed assets   -    -    (64,172)
                
Total other (expense) income   (79,946)   (115,107)   (2,254,873)
                
Loss before provision for taxes   (1,132,629)   (937,782)   (27,907,565)
                
Provision for income taxes   -    -    32,673 
                
Net loss   (1,132,629)   (937,782)   (27,940,238)
                
Net loss attributable to non-controlling interest   (64,642)   (34,917)   (1,680,109)
                
Net loss attributable to SurePure  $(1,067,987)  $(902,865)  $(26,260,129)
                
Loss per share – basic and diluted attributable               
to SurePure common stockholders  $(0.05)  $(0.03)   (0.99)
                
Weighted average shares outstanding -               
basic and diluted   23,669,784    36,094,215    26,537,506 

  

 

 

See notes to consolidated financial statements.

2
 

  

SUREPURE, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

AND CUMULATIVE FROM AUGUST 24, 2005 (INCEPTION) TO MARCH 31, 2013

 

           Cumulative From 
   Three Months Ended   August 24, 2005 
   March 31,   (inception) to 
   2013   2012   March 31, 2013 
   (Unaudited)   (Unaudited)   (Unaudited) 
             
Net loss  $(1,132,629)  $(937,782)  $(27,940,238)
                
Other comprehensive loss, net of tax               
                
Unrealized gain (loss) on foreign               
currency translation   299,465    (230,095)   746,148 
                
Comprehensive loss   (833,164)   (1,167,877)   (27,194,090)
                
Less: Comprehensive income (loss) attributable               
to noncontrolling interest   14,565    (91,119)   (1,514,684)
                
Comprehensive loss attributable               
to SurePure, net of tax  $(847,729)  $(1,076,758)  $(25,679,406)

 

 

 

 

See notes to consolidated financial statements.

 

 

3
 

  

SUREPURE, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2013

 

                   Equity in           Accumulated     
(Unaudited)  Common           Additional   Variable   Retained       Other     
   Shares   Common   Preferred   Paid-in   Interest   Earnings   Noncontrolling   Comprehensive     
   Issued   Stock   Stock   Capital   Entities   (Deficit)   Interest   Income   Total 
Balances-January 1, 2013   23,542,184   $23,542   $226,654   $20,920,817   $920,980   $(25,192,142)  $(1,335,689)  $360,464   $(4,075,374)
                                              
Issuance of common stock   348,000    348         347,652                        348,000 
                                              
Imputed interest on stockholder loans                  76,742                        76,742 
                                              
Net (loss) for the three months ended March 31, 2013                            (1,067,987)   (64,642)        (1,132,629)
                                              
Unrealized gain on foreign currency translation adjustment   -    -    -    -    -    -    79,207    220,258    299,465 
                                              
Balances- March 31, 2013   23,890,184   $23,890   $226,654   $21,345,211   $920,980   $(26,260,129)  $(1,321,124)  $580,722   $(4,483,796)

 

 

 

 

See notes to consolidated financial statements.

 

 

4
 

 

SUREPURE, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

AND CUMULATIVE FROM AUGUST 24, 2005 (INCEPTION) TO MARCH 31, 2013

  

           Cumulative From 
   Three Months Ended   August 24, 2005 
   March, 31   (inception) to 
   2013   2012   March 31, 2013 
   (Unaudited)   (Unaudited)   (Unaudited) 
Cash from operating activities:            
Net loss  $(1,132,629)  $(937,782)  $(27,940,238)
                
Adjustments to reconcile net loss to cash used in operating activities:               
Depreciation and amortization   5,528    5,744    181,627 
Impairment of patent   -    -    537,631 
Loss on sale of property and equipment   -    -    64,172 
Imputed interest on stockholders loans   76,742    110,489    2,440,679 
Changes in assets and liabilities:               
Accounts receivable   (1,911)   66,118    (21,859)
Prepaid expenses and other current assets   42,266    (11,836)   (86,380)
Accounts payable   183,986    69,618    974,916 
Due to officers/stockholders   329,530    (36,322)   576,789 
Income taxes payable   (15)   (307)   394 
                
Total cash used in operating activities   (496,503)   (734,278)   (23,272,269)
                
Cash from investing activities:               
Purchase of property and equipment   -    -    (181,760)
Proceeds from sales of property and equipment   -    -    16,860 
Acquisition of patents   -    -    (746,576)
                
Total cash provided by (used in) investing activities   -    -    (911,476)
                
Cash from financing activities:               
Proceeds from sale of equity   348,000    -    14,006,469 
Proceeds from equity of variable interest entities   -    -    83,309 
(Decreases)/Increases in loans from stockholders   (276,630)   1,090,138    9,144,975 
Increases in other loans payable   2,763    -    222,312 
                
Total cash provided by financing activities   74,133    1,090,138    23,457,065 
                
Effect of exchange rate changes on cash and cash equivalents   299,465    (230,095)   746,148 
                
Net (decrease) increase in cash   (122,905)   125,765    19,468 
                
Cash, beginning of period   142,373    35,475    - 
                
Cash, end of period  $19,468   $161,240   $19,468 
                
Supplemental disclosures:               
Interest paid  $2,431   $4,932   $95,720 
                
Income taxes paid  $-   $-   $32,673 
                
Conversion of stockholders’ loans to equity  $-   $-   $5,065,437 
                
Conversion of other loans payable to stockholders’ loans            $300,000 
                
Conversion of stockholders’ loans to equity of variable interest entities  $-   $-   $1,114,400 
                
Imputed interest on stockholder's loans reported as an               
increase to additional paid-in capital  $76,742   $110,189   $2,440,679 

 

 

 

See notes to consolidated financial statements.

5
 

  

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements

  

Three Months Ended March 31, 2013 and 2012

 

 

 

1. Organization and Significant Accounting Policies

 

Description of Business

 

SurePure Investment Holding AG (“SPI”) was incorporated in Switzerland in 2007. From 2007 to December 12, 2012 SPI was the holding company of the SurePure Group (the “Group”), which included subsidiaries and other entities whose activities primarily benefit the Group. On December 12, 2012, SPI entered into an Amended and Restated Share Exchange Agreement with SurePure, Inc. (“SurePure US” or the “Company”) pursuant to which SurePure US acquired SPI in a share exchange (the “Share Exchange”) and became the holding company for the Group, including SPI. Although SurePure US is the legal acquirer of SPI, SPI is treated as the acquirer for accounting and financial reporting purposes and under this method, SurePure US retains SPI’s financial reporting history.

 

Under the Share Exchange, each share of the capital stock of SPI was exchanged for one share of SurePure US common stock, par value $.001 per share (“Common Stock”), and, in the case of one shareholder of SPI, one share of Nonvoting Convertible Preferred Stock, par value $.01 per share (the “Nonvoting Convertible Preferred Stock”).

 

The Group has developed the technology for using shortwave ultraviolet light (“UV-C”) to purify turbid liquids such as wine, fruit juice and milk. Although initially designed to treat food-grade applications, it has successfully been applied to liquids such as bovine blood plasma, water, brines and sugar syrup solutions. The Group holds international patents for this technology. The Group has been engaged in raising capital, continuing research and development of its technologies and processes and developing markets for its products.

 

Basis of Presentation and Consolidation

 

The accompanying unaudited consolidated financial statements of the Company and subsidiaries have been prepared in accordance accounting principles generally accepted in the United States of America (“GAAP”), with the instructions to Form 10-Q and with the requirements of Regulation S-X of the U. S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual consolidated financial statements. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

 

The accompanying unaudited consolidated financial statements include the accounts and results of operations of the Company, its subsidiaries and its variable interest entities (“VIE’s”). All inter-group balances and transactions have been eliminated in the consolidation. As a development stage entity, the Company is devoting most of its efforts to establishing its business; therefore, the accompanying consolidated statements of operations, comprehensive income (loss), and cash flows present cumulative amounts since inception.

  

The Company’s wholly-owned subsidiaries are as follows:

 

· SurePure Operations AG (“SPO”), which markets the products of the Group and earns its revenue by selling equipment utilizing the Group technology globally. SPO owns a patent for its technology in a number of countries;

 

6
 

  

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

· SurePure Latin America Maqinas de Purificasao UVC Ltda. (“SPLAM”), which conducts no operations currently; and

 

· SurePure Participations AG (“SPP”) which was a minority stockholder of SPI and is part of the common holding structure of the Group. SPP has no operations and all of its expenses have been and will continue to be paid by SPI. Formerly a VIE, SPP became a subsidiary as a result of the Share Exchange on December 12, 2012.

 

VIE’s are entities whose activities primarily benefit the Company and are primarily supported by the Company. The Company continues to have a variable interest in the following entities: SurePure Holdings South Africa (Pty) Ltd. (“SPHSA”) and its wholly-owned subsidiary, SurePure Marketing South Africa (Pty) Ltd. (“SPMSA”), which hold the South African patent, make the products of the Group and earn revenue from selling equipment utilizing the SurePure technology.

  

The Group’s reporting currency is the United States Dollar (“USD”) and these consolidated financial statements are presented in USD or “$.”

 

Use of Estimates

 

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

  

Income Taxes

 

The Group accounts for income taxes using the liability method. Under this method, deferred income taxes are recognized based on the tax effects of temporary differences between the financial statement and tax bases of assets and liabilities, as measured by current enacted tax rates. Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not provide a future tax benefit.

 

GAAP requires that, in applying the liability method, the consolidated financial statement effects of an uncertain tax position be recognized based on the outcome that is more likely than not to occur. Under this criterion, the most likely resolution of an uncertain tax position should be analyzed based on technical merits and one that will likely be sustained under examination. There are no uncertain tax positions requiring adjustment to or disclosure in these consolidated financial statements.

 

7
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

Accounts Receivable

 

The Group performs regular credit evaluations of customers to which it provides sales on credit terms, and adjusts credit limits based on the customer’s payment history and reassessments of their creditworthiness. The Group continuously monitors its collections and establishes a provision for estimated doubtful accounts, if necessary. No allowance for doubtful accounts was deemed to be necessary at March 31, 2013 or at December 31, 2012.

 

Property, Equipment and Related Depreciation

 

Property and equipment are recorded at cost, less accumulated depreciation. Cost includes the price paid to acquire the asset and any expenditures that substantially increase the asset’s value or extend the useful life of an existing asset. Depreciation is computed using the straight-line method over the estimated useful lives of the property and equipment. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Expenditures for routine repairs and maintenance are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is recognized in operations.

 

Depreciation is provided over the following estimated useful lives:

 

Plant machinery 3 to 5 years

 

Furniture and fixtures 3 to 5 years

 

Motor vehicles 5 years

 

Office and computer equipment 3 to 5 years

 

Intangible Assets

 

Intangible assets consist of patents in various countries around the world for the Company’s UV-C purification technology. The patents were initially recognized at their cost and are being amortized on a straight-line basis over their remaining estimated useful lives of twelve years.

 

The Group evaluates the carrying value of its intangible assets for impairment at least annually or when events or changes in circumstances are identified by management that indicate that such carrying values may not be fully recoverable. The evaluation involves estimating the future undiscounted cash flows expected to be derived from the assets to assess whether or not a potential impairment exists. As a result of its evaluations, management determined that it was not necessary to recognize a loss on impairment of its intangible assets for the three months ended March 31, 2013 or for the year ended December 31, 2012. During the period from inception to March 31, 2013, impairment losses on intangible assets of $537,631 were recognized.

  

8
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

Fair Value of Financial Instruments

 

Financial instruments include accounts receivable and accounts payable. As of March 31, 2013 and December 31, 2012, the carrying values of the financial instruments approximated their fair values due to the short-term nature of these instruments.

  

Revenue

 

Revenue is earned from sales and licensing of equipment that uses the Company’s patented technology and is recognized, net of returns and discounts, when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. These criteria are usually met upon delivery of the product to the customer, which is also when the risk of ownership and title passes to the customer.

 

Research and Development

 

Research and development costs are charged to expense as incurred.

 

Foreign Currency Translations

 

These consolidated financial statements are presented in USD, which is the Group’s reporting currency. The consolidated financial statements of the Group members have been translated into USD in accordance with GAAP. All assets and liability accounts on the consolidated balance sheets have been translated using the exchange rate in effect at the consolidated balance sheet date. Equity accounts have been translated at their historical rates when the capital transaction occurred. Income and expenses have been translated at the average exchange rates for the periods presented. Adjustments resulting from the translation of the Group’s consolidated financial statements are included in the consolidated statement of other comprehensive income (loss). Actual transaction gains and losses are included in the consolidated statements of operations as incurred.

 

The functional currencies of the companies included in the Group are their respective local currencies. Accordingly, the Group is exposed to transaction gains and losses that result from changes in various foreign currency exchange rates.

 

Applicable functional currencies are:

 

SPI, SPO, and SPP Swiss francs – CHF

 

SPLAM Brazilian Real – BRL

 

SPMSA and SPHSA South African Rand – ZAR

 

 

9
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

Exchange rates used for conversion of foreign items to USD at the end of each period and the average for the period were:

  

   Three Months Ended March 31,   December 31, 
   2013   2012   2012 
CHF:               
Reporting date   1.0525    1.1071    1.0942 
Average for period   1.0752    1.0847    N/A 
                
BRL:               
Reporting date   0.4938    0.5478    0.488 
Average for period   0.4998    0.5650    N/A 
                
ZAR:               
Reporting date   0.1082    0.1300    0.1178 
Average for period   0.1118    0.1286    N/A 

 

Fair Value of Financial Instruments

 

GAAP has established a framework for measuring fair value that is based on a hierarchy which prioritizes the inputs to valuation techniques according to the degree of objectivity necessary. The fair value hierarchy of the inputs to valuation techniques used to measure fair value is divided into three broad levels of objectivity:

 

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 asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. They are based on best information available in the absence of level 1 and 2 inputs.

 

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value as required by GAAP:

 

Cash: The carrying amount is the fair value because it is the basic financial instrument used to express fair value.

 

Accounts receivable and accounts payable: The carrying amounts approximate fair value because of the short-term duration of those instruments.

 

Loans payable: The carrying amount approximates fair value based on current market conditions and interest rates available to the Group for similar financial instruments.

 

Earnings (Loss) per Share

 

Basic and diluted earnings (loss) per share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as options, convertible notes and convertible preferred stock, were exercised or converted into common stock or could otherwise cause the issuance of common stock that then would share in earnings (losses). Such potential additional common shares are included in the computation of diluted earnings per share. The Company has no securities or other contracts to issue common stock that could cause any dilution of earnings. In addition, when there is a loss, diluted loss per share is not computed because any potential additional common shares would reduce the reported loss per share and therefore have an anti-dilutive effect.

 

10
 

 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

2.Property and Equipment

 

Property and equipment consists of the following:

 

   March 31,   December 31, 
   2013   2012 
         
Machinery and equipment  $5,010   $5,010 
Furniture and fixtures   12,753    12,753 
Motor vehicles   14,400    14,400 
Office and computer equipment   12,647    12,647 
    44,810    44,810 
Less: Accumulated depreciation   41,555    40,194 
           
Property and equipment, net  $3,255   $4,616 

 

Depreciation expense was $1,361, $1,727, and $94,014 for the three months ended March 31, 2013 and 2012 and for the period from inception to March 31, 2013, respectively.

  

3.Intangible Assets

 

Intangible assets consist of the following:

 

   March 31,   December 31, 
   2011   2012 
         
Patents  $208,943   $208,943 
Less: Accumulated amortization   84,152    79,985 
           
Intangible asset, net  $124,791   $128,958 

 

Amortization expense was $4,167, $4,017, and $87,613 for the three months ended March 31, 2013 and 2012 and for the period from inception to March 31, 2013, respectively.

  

4.Due to Officers/Stockholders

 

Due to officers/stockholders consists of unpaid salaries, accrued leave and advances from the three executives of the Group entities totaling $576,789 and $247,259 at March 31, 2013 and December 31, 2012, respectively.

  

5.Stockholders and Other Loans Payable

 

Stockholder and other loans payable consist of advances by individuals and companies to the Group. Certain of the lenders are either stockholders or are related to stockholders. None of these loans are supported by notes and none have a provision for interest or repayment. The Company has imputed interest on these loans. The rates of interest used to impute interest on these loans range from 4% per annum to 15% per annum during the periods in which these loans were outstanding and represent management’s best estimate of the interest rates that would be applicable to Company in a third-party marketplace. For the three months ended March 31, 2013 and 2012 and for the period from inception to March 31, 2013, the imputed interest on these loans was $76,742, $110,489 and $2,440,679, respectively. These amounts are included in interest expense in the accompanying consolidated statements of operations and are reflected as an increase in additional paid-in capital in the accompanying consolidated statements of stockholders’ deficit.

  

11
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

 

  

Three Months Ended March 31, 2013 and 2012

 

 

 

The Group has obtained subordination agreements from all of the lenders with respect to these loans, the terms of which provide that the loans will not be classified as current or be payable within one year if doing so would cause a Group member to be considered insolvent in accordance with the applicable local laws. Therefore, these loans are presented as long-term liabilities in the accompanying consolidated balance sheets.

 

 

12
 

 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

 

  

Three Months Ended March 31, 2013 and 2012

 

 

 

In October 2012, the Company and the three lenders whose balances are reflected in Other Loans Payable revised their agreements orally and these agreements were later formalized in writing effective January 2013. The Company agreed to pay interest at 5% per annum on the outstanding balances retroactive to the time that the loans were made in 2011 and repaid these lenders $105,000 in October 2012. Interest on these loans for the three months ended March 31, 2013 was $2,763 and for the period from inception to March 31, 2013 was $24,593 respectively. In addition, the Company agreed to make monthly payments of $10,000 to each of the three lenders commencing February 2013. On April 4, 2013, these lenders and the Company agreed that the lenders will receive the right to convert each $1 that is unpaid under the agreement into one share of the Company’s common stock for upon the effective date of the Company’s registration statement for certain shares of the Company’s common stock. The agreements further provided that if the entire loan balance was not paid by October 31, 2013, then a 10% per annum interest rate would be applied to the entire loan balance from the inception of the loan. As of April 1, 2013, the Company has not made the monthly payments pursuant to these agreements.

  

6.Equity

 

Common stock through the date of the Share Exchange consisted of the common stock of SPI. The amounts presented for periods prior to the Share Exchange were denominated in CHF and have been translated from CHF to USD using the exchange rates in effect on the date of each issuance. For all of 2011, SPI had 26,822,215 common shares issued and outstanding. During 2012 prior to the Share Exchange, SPI issued 2,500,000 shares in connection with the Subscription Agreement and 7,378,416 shares in connection with the conversion of SPI stockholder loans to common shares, resulting in 36,700,631 common shares outstanding immediately prior to the Share Exchange.

 

On June 14, 2011, a majority of the shareholders and directors of SurePure US approved a special resolution to undertake a forward split of the Company’s common stock resulting in an increase in the number of outstanding shares on that date from 2,135,000 to 32,452,000. Of these shares, 23,180,000 shares that were held by the former directors and officers were redeemed and cancelled as a condition to the Share Exchange, leaving 9,272,000 shares of SurePure US outstanding immediately prior to the Share Exchange. No preferred shares were issued prior to the date of the Share Exchange.

  

In determining the annual number of outstanding common shares on a weighted-average basis, the 9,272,000 common shares held by former SurePure US stockholders are considered to be outstanding from July 25, 2011, the date that the Company and SPI entered into an Agreement and Plan of Merger.

 

13
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

On December 12, 2012, the Company designated 31,155,282 of the authorized shares of preferred stock as Nonvoting Convertible Preferred Stock. Under the terms of the Certificate of Designation (the “Certificate”), each share of Nonvoting Convertible Preferred Stock is convertible into one share of Common Stock, subject to certain limitations and restrictions as defined in the Certificate.

 

The issued shares of Nonvoting Convertible Preferred Stock automatically convert, at the applicable conversion ratio as defined in the Certificate, into shares of the Company’s Common Stock upon the assignment, sale or other transfer of shares to any person other than an affiliate of the holder of the seller. Any assignee, purchaser or other transferee may surrender certificates representing the assigned shares to us and will receive shares of our Common Stock in return.

 

At March 31, 2013 and December 31, 2012, 23,890,184 and 23,542,184, respectively, common shares were issued and outstanding. There were 22,665,447 issued and outstanding preferred shares at March 31, 2013 and December 31, 2012..

  

All references in these consolidated financial statements to the number of common shares, price per share and weighted average number of common shares outstanding prior to the June 2011 forward split have been adjusted to reflect the stock split on a retroactive basis unless otherwise noted. As of March 31, 2013, the Company has not granted any stock options and has not recorded any stock-based compensation.

 

7.Stock Subscription Agreement

 

On November 26, 2012, the Company entered into a Subscription Agreement with RD Active Capital Limited, a United Kingdom-based investment manager (“RD Active”), in which RD Active agreed to purchase up to 300,000 new common shares over the period ending January 31, 2013 and acquired the right to purchase up to 2,700,000 new common shares through March 31, 2013 as long as RD Active purchased the 300,000 new common shares. The right to purchase shares was extended on March 28, 2013 to April 12, 2013 and on April 12, 2013, the right to purchase shares was further extended to May 31, 2013. All common shares were purchased and sold, and are to be purchased and sold, at an issue price of $1.00 per share. Under the terms of the Subscription Agreement, RD Active may exercise the additional purchase right on its own behalf and resell to other purchasers or may place the additional shares directly with other purchasers. At such time as RD Active and any other purchasers have completed and paid for 3,000,000 shares under the Subscription Agreement, RD Active and the other purchasers under the Subscription Agreement have the right to appoint an additional director to the board of directors of the Company. Pursuant to the terms and conditions of the Share Exchange, the Company has assumed the obligations of SPI under the Subscription Agreement.

  

14
 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

As of March 31, 2013, RD Active had purchased 583,000 common shares under the Subscription Agreement, including 348,000 common shares during the three months ended March 31, 2013. Subsequent to March 31, 2013, the Company received $357,500 pursuant to the Subscription Agreement, and the Company issued 357,500 additional common shares.

  

15
 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

    

 

8.Stockholders’ Deficit

 

The consolidated stockholders’ equity of the Group consists of the consolidated equity of the Group attributable to the parent which includes the common stock, additional paid-in capital, the retained deficit, and the accumulated other comprehensive income plus the equity of the noncontrolling interest of the VIE’s.

The South African VIE’s (SPHSA and SPMSA) that are part of the Group are managed by the same executive management as that of SPI, and the major shareholder of the South African VIE’s and SPI are related parties. In the accompanying consolidated financial statements, the 82.64% controlling interest in the South African VIE’s is reported in the consolidated statements of stockholders’ deficit together with the entire interest of SPP (prior to the Share Exchange) as the Equity in Variable Interest Entities. The 17.36% portion of the equity of South African entities that is not owned by this controlling stockholder is reported as the Noncontrolling Interest in the VIE’s. The investment interest of SPP in SPI was eliminated in consolidation and was reported as a Stock Subscription Receivable.

 

9.Income Taxes

 

The Company and group members file income tax returns in Switzerland, South Africa, the United States and Brazil. The components of income (loss) from operations before income taxes, by jurisdiction, are as follows:

 

           From August 24, 2005 
   Three Months Ended March 31,   (inception) to 
   2013   2012   March 31, 2013 
Switzerland  $(362,053)  $(736,726)  $(16,877,938)
South Africa   (372,212)   (201,056)   (9,674,331)
United States   (398,364)   -    (413,798)
Brazil   -    -    (941,498)
Total  $(1,132,629)  $(937,782)  $(27,907,565)

   

16
 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

  

The provision for income taxes shown in the accompanying consolidated statements of operations consists of the following for the three months ended March 31, 2013 and 2012 and for the period from August 24, 2005 (inception) to March 31, 2013:

 

           From August 24, 2005 
   Three Months Ended March 31,   (inception) to 
   2013   2012   March 31, 2013 
Current tax provision:               
Switzerland  $-   $-   $32,673 
South Africa   -    -    - 
United States   -    -    - 
Brazil   -    -    - 
Total current tax provision  $-   $-   $32,673 
                
Deferred tax provision:               
Switzerland  $(64,225)  $(112,996)  $(2,894,435)
South Africa   (67,769)   (33,955)   (1,889,318)
United States   (139,427)   -    (144,829)
Brazil   -    -    (235,375)
Change in valuation allowance   271,421    146,951    5,163,957 
Total deferred provision  $-   $-   $- 
                
Total  $-   $-   $32,673 

 

The Company has determined that the future tax benefits from net operating losses are not likely to be realized in future periods and a full valuation allowance has been provided for all periods.

 

The income tax effect of each type of temporary difference giving rise to the net deferred tax asset as follows:

 

   March 31,   December 31, 
   2013   2012 
Deferred tax assets:          
Net operating loss carryforwards  $5,163,957   $4,892,536 
Less: valuation allowance   (5,163,957)   (4,892,536)
           
Total  $-   $- 

 

The following table reconciles the effective income tax rates with the statutory rates for the three months ended March 31, 2013 and 2012 and for the period from August 24, 2005 (inception) to March 31, 2013:

 

           United         
   Switzerland   South Africa   States   Brazil   Total 
                     
Statutory Tax Rate  8.5%/18%  28.0%  35.0%  25.0%    
                     
Three months ended March 31, 2013:                    
Net (loss) from operations                         
before taxes  $(362,053)  $(372,212)  $(398,364)  $-   $(1,132,629)
                          
As calculated at the statutory rate   (64,225)   (104,219)   (139,427)   -    (307,871)
                          
Permanent differences   -    36,450         -    36,450 
Change in valuation reserves   64,225    67,769    139,427    -    271,421 
                          
Provision for income taxes  $-   $-   $-   $-   $- 
                          
Three months ended March 31, 2012:                         
Net (loss) income from operations                         
before taxes  $(736,726)  $(201,056)  $-   $-   $(937,782)
                          
As calculated at the statutory rate  $(108,764)  $(56,296)  $-   $-   $(165,060)
                          
Permanent differences   (4,232)   22,341    -    -    18,109 
Change in valuation reserves   112,996    33,955    -    -    146,951 
                          
Provision for income taxes  $-   $-   $-   $-   $- 

  

For the period from August 24, 2005 (inception) to            
March 31, 2013:                
Net (loss) from operations                         
before taxes  $(16,877,938)  $(9,674,331)  $(413,798)  $(941,498)  $(27,907,565)
                          
As calculated at the statutory rate  $(2,876,863)  $(2,708,812)  $(144,829)  $(235,375)  $(5,965,879)
                          
Permanent differences   15,101    819,494    -    -    834,595 
Change in valuation reserves   2,894,435    1,889,318    144,829    235,375    5,163,957 
                          
Provision for income taxes  $32,673   $-   $-   $-   $32,673 

     

Permanent differences are principally related to loss on disposal of property and equipment, interest and penalties and unallowable expenses.

 

The Company and group members remain subject to tax examinations for the years ended December 31, 2012 and 2011 in Switzerland and South Africa, for the three years ended December 31, 2012 and in the U.S and Brazil, for the four years ended December 31, 2012.

  

10.Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivables. Cash is maintained in financial institutions in foreign countries that do not insure the balances in the accounts. The credit risk for customer accounts is concentrated because accounts receivable consists of the balance due from one customer. However, the customer’s account typically is collected within a short period of time and, based on its assessment of current conditions, management believes there is no risk of loss. Management continuously monitors these conditions. 

17
 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

  

11.Pending Acquisition of SPHSA

 

On August 16, 2012, SPI entered into an agreement (the "Acquisition Agreement") with SPHSA providing for the acquisition of 100% of the outstanding shares of SPHSA from its shareholders. The Company has assumed the executory obligations of SPI under the Acquisition Agreement.

  

SPHSA is accounted for as a subsidiary of SPI under variable interest accounting rules. The shareholdings in SPHSA have remained largely unchanged since the formation of that company in 2005. Since October 2007, SPHSA has also provided various management services for SPI and SPO. In addition, our subsidiary SPO has loaned approximately $2,000,000 to SPHSA, all of which is due on demand. There have been and continue to be various intercompany transactions relating to the sale and purchase of goods and services between SPI and SPHSA. Accordingly, the boards of directors of both SPI and SPHSA believed it to be in the best interest of their respective companies to combine such that SPHSA would become a wholly-owned subsidiary of SPI and SPO would convert its loans and advances to SPHSA into equity, thereby improving the financial condition of SPHSA.

 

Subject to the terms and conditions of the Acquisition Agreement, on August 21, 2012, SPI made its offer, which initially was irrevocable for a period of 20 business days after the date of the offer to purchase from each of the shareholders of SPHSA all of their shares of SPHSA at a closing to be held September 19, 2012, which was the 21st business day after the date of the offer. The shares of SPHSA subject to SPI’s offer to purchase included shares that reflected the value of shareholder loans outstanding at the time of the offer. On September 21, 2012, SPI extended the period during which its offer remained open until November 26, 2012 to permit the satisfaction of conditions to the closing of the offer. On November 30, 2012, SPI and SPHSA agreed to amend the Acquisition Agreement to provide that the offer would remain open until February 28, 2013, so as to permit the fulfillment of certain closing conditions. On March 8, 2013, SPI extended the date that the offer would remain open to June 28, 2013. The purchase price for the shares of SPHSA under the offer was ZAR 4,000 (approximately $500.00) per share of SPHSA. The Acquisition Agreement provides that SPI will settle the purchase price it is paying for the shares of SPHSA in shares of SPI in the ratios of (i) 1,000 common shares of SPI for each share of SPHSA and (ii) 1,000 common shares of SPI for each ZAR 4,000 in principal amount of loans owed by SPHSA to its shareholders. As of the May 15, 2013, SPHSA had not yet received a final determination from the South African Reserve Bank as to whether the transaction could proceed.

  

Acting under the terms of the Share Exchange, at the time of the Share Exchange SPI assigned its rights under the Acquisition Agreement to SurePure US, and SurePure US assumed the obligations of SPI to issue shares to the shareholders of SPHSA at such time, if any, that the pending acquisition of SPHSA is completed.

 

18
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

12.2012 Stock Option Plan

 

On December 11, 2012, the Company adopted the 2012 Stock Plan (“the Plan”). Under the terms of the Plan, 3,000,000 shares of our Common Stock have been reserved for future issuance. The Plan authorizes the granting of non-qualified stock options to our directors and to any independent consultants. The Plan will be administered by the Company’s board, or a committee appointed by the board (the “Committee”). The Committee may determine persons eligible for grants and the timing, type, amount, fair market value and other provisions of such grants. The Committee will have authority, subject to the express provisions of the Plan, to construe the Plan and the option agreements granted pursuant to the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any option agreement in the manner and to the extent it shall deem expedient to promote the best interests of the Company. The Plan will terminate on December 9, 2022.

 

The Plan provides that the determination of the option price per share for any option rests in discretion of the Committee. Options granted under the Plan must be granted within ten years from the date on which the Plan has been adopted. No options granted under the Plan may be exercisable after ten years from the date of grant. The Company’s board of directors may suspend or terminate the Plan in whole or in part or amend the Plan in such respects as the board may deem appropriate and in the best interest of the company. No amendment, suspension or termination of the Plan shall, however, without the optionee's consent, alter or impair any of the rights or obligations granted under the Plan.

 

There are no outstanding grants under the Plan as of March 31, 2013.

 

13.Commitments, Contingencies and Tax Obligation

 

Lease Commitments

 

The Group leases two premises in South Africa under operating leases. One location is an office facility and the other is a workshop. The office facility lease was originally scheduled to expire on April 30, 2012, with a monthly rent of $4,689, but has been renegotiated to extend the lease term to February 28, 2014, at a monthly rent of $2,677, for the first year and $2,946 for the second year. The lease for the Group’s workshop facility originally expired on April 30, 2012, with a monthly rent of $2,460. This lease term was then extended to November 30, 2012 and has been extended again to September 30, 2013, with a monthly rent of $2,595, through April 30, 2013 and a monthly rent of $2,855 thereafter. In addition to the payments required under the preceding leases, payments are made for space rentals on an as-needed basis. The total rent expense for the three months ended March 31, 2013 and 2012 and for the period from inception to March 31, 2013 was approximately $20,500, $22,600 and $797,500, respectively. Rent expense is included in general and administrative expenses in the accompanying consolidated statement of operations.

  

19
 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

  

The future rent commitments under the above leases are as follows:

 

March 31, 2014  $47,648 

  

Payroll Commitments

 

The Group’s employees in South Africa have employment contracts that provide for one month of notice before the employee can be terminated. As of March 31, 2013, the total monthly salary commitment applicable to these employees was approximately $33,000.

  

Payroll Tax Obligation

 

In February 2012, SPMSA received notification from the South African Revenue Service regarding unpaid payroll taxes of approximately $185,000. SPM requested additional time to arrange a payment plan that is suitable to both parties and has commenced making monthly payments against this balance. During the Company’s review of this matter in 2012, it was discovered that additional taxes amounting to approximately $62,000 were due. At March 31, 2013 and December 31, 2012, the unpaid balance of this liability was approximately $162,000 and $187,000, respectively and is included in accounts payable and other current liabilities in the accompanying consolidated balance sheets.

  

Employment and Consulting Agreements

 

The Group has entered into agreements to secure the services of three executives. These agreements provide for annual compensation and require a termination notice period by the Group of three months. The executives all are stockholders of the Company.

 

The total compensation paid to these executives for the three months ended March 31, 2013 and 2012 and for the period from inception to March 31, 2013 was approximately $261,000, $314,000 and $5,353,000, respectively. These amounts are included in general and administrative expenses.

 

The Group entered into agreements with unrelated third party consultants and institutions for consulting, research and professional services. These agreements can be terminated by either party with between two weeks and three months written notice or immediately if for cause. The amounts due vary according to the nature of the service arrangement and the length of notice required for termination. The minimum amount due under these agreements is approximately $134,000 per month.

   

20
 

 

 

SurePure, Inc. and Subsidiaries 

(A Development Stage Company)

 

  

Notes To Consolidated financial Statements (Continued)

  

Three Months Ended March 31, 2013 and 2012

 

 

 

14.Subsequent Events

 

The Company has evaluated its subsequent events from the balance sheet date. Other than as disclosed in Notes 5, 7, and 15, the Company has determined that there were no material subsequent events requiring adjustment to or disclosure in these consolidated financial statements except the following:

 

On April 4, 2013, SPMSA, a VIE of the Company, borrowed ZAR 2 million (approximately $215,000) from a lender in South Africa. The terms of the loan provide for interest of 2% per month on the outstanding balance which is payable together with the principal balance no later than September 30, 2013. An officer/stockholder of the Company has deposited 1,000,000 of his common shares of the Company with the lender as security for the repayment of the loan. 

   

15.Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the continuation of the Group as a going concern. Due to the start-up nature of its business, the Group has generated recurring losses and expects to incur additional losses as it expands the UV-C technology and develops marketing, sales and financial plans. As reflected in the accompanying consolidated financial statements, the Group’s total liabilities exceed total assets at March 31, 2013 and December 31, 2012 by $4,483,796 and $4,075,374, respectively, and the Group has incurred cumulative operating losses since the date of inception. To date, the Group’s cash flow requirements have been met with cash investments by the stockholders, certain third parties and to a lesser extent, sales and interest income.

  

The Group will require additional capital to continue its development and to achieve sufficient revenues to support its operations. The Group’s future capital requirements will depend on many factors, including its ability to grow and maintain revenues and its ability to manage expenses and expected capital expenditures. The Group will require additional financing either through borrowings or the sale of additional equity to support its operations.

 

The Group’s access to additional financing will depend on a variety of factors many over which the Group has little or no control. These factors include market conditions, the general availability of credit, the overall availability of credit to the Group’s industry, its credit ratings and credit capacity, the actual financial and operational results of the Group as well as the lenders’ or investors’ perception of the Group’s short-term and long-term financial prospects. If future financing is not available on acceptable terms, the Group may not be able to continue as a going concern.

 

Management is currently pursuing various plans to meet the cash flow requirements of the Company for the twelve months ending March 31, 2014. As disclosed in Note 7 above, the Company is a party to the Subscription Agreement with RD Active. Subsequent to March 31, 2013, the company received $357,500 under this Subscription Agreement. An additional 2,059,500 shares of the Company’s common stock remain available for purchase under the Subscription Agreement at $1.00 per share through the current termination date of May 31, 2013. In addition, there are ongoing discussions with current and other potential investors and the Company is also considering an additional common stock offering during 2013. The Company projects that increase in the commercialization of the Company’s technology will provide additional cash flow for operations.

  

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

21
 

 

Item 6. Exhibits.

 

31.1   Section 302 Certification of Guy Kebble*
     
31.2   Section 302 Certification of Stephen M. Robinson*
     
32.1   Section 906 Certifications of Guy Kebble and Stephen M. Robinson*
     
101   The following materials from SurePure,, Inc. Form 10-Q for the quarter ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Unaudited Consolidated Balance Sheets at March 31, 2013 and December 31, 2012, (ii) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012, and for the Cumulative Period from August 24, 2005 (inception) to March 31, 2013, (iii) Unaudited Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2013, (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012, and for the Cumulative Period from August 24, 2005 (inception) to March 31, 2013 and (v) Notes to the Unaudited Consolidated Financial Statements.**

 

_____________

* Filed herewith.

 

**   Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  SurePure, Inc.
   
   
Date:  May 17, 2013 By: /s/ Guy Kebble
    Name:   Guy Kebble
    Title: President and Chief Executive Officer
      (Principal Executive Officer)
       
       
Date:  May 17, 2013 By: /s/ Stephen M. Robinson
    Name: Stephen M. Robinson
    Title: Chief Financial Officer
      (Principal Financial and Accounting Officer)

  

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