| Section 16 Filings Only |
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LAPOLLA INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED-CONTINUED)
Note 9. Derivatives and Fair Value - continued
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under derivative liabilities:
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Fair Value Measurement Using
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As of March 31, 2012
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As of December 31, 2011
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Carrying Value
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Level 3
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Total
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Carrying Value
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Level 3
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Total
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Warrant Liabilities
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$ |
120,579 |
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$ |
120,579 |
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$ |
120,579 |
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$ |
154,518 |
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$ |
154,518 |
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$ |
154,518 |
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Total Derivative Liabilities
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$ |
120,579 |
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$ |
120,579 |
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$ |
120,579 |
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$ |
154,518 |
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$ |
154,518 |
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$ |
154,518 |
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The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Fair Value Measurements Using Level 3 Inputs
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March 31, 2012
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December 31, 2011
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Derivative Liabilities
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Totals
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Derivative Liabilities
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Totals
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Beginning Balance on January 1,
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$ |
154,518 |
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$ |
154,518 |
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$ |
292,240 |
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$ |
292,240 |
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Total Gains or Losses (realized/unrealized) included in Net Income (Loss)
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(33,939 |
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(33,939 |
) |
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(137,722 |
) |
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(137,722 |
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Purchases, Issuances and Settlements
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— |
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— |
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— |
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— |
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Transfers in and/or out of Level 3
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— |
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— |
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— |
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— |
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Ending Balance on December 31,
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$ |
120,579 |
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$ |
120,579 |
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$ |
154,518 |
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$ |
154,518 |
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The following is a summary of long term debt at:
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March 31, 2012
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December 31, 2011
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Various notes payable on vehicles and equipment, due in monthly installments of $4,303 including interest, maturing through 2014.
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$ |
60,332 |
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$ |
71,047 |
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Less: Current Maturities
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(40,516 |
) |
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(44,560 |
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Total Long-Term Debt
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$ |
19,816 |
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$ |
26,487 |
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Note 11. Related Party Transactions.
(a) On January 20, 2012, the Company received a $300,000 prepayment from a customer in which the Chairman of the Board has an ownership interest, for the purchase of foam products for delivery in the second quarter of 2012. Prior to any of the prepaid orders being delivered to the customer, this prepaid order was converted to a promissory note due and payable from the Company to the customer and subsequently assigned to the Chairman on April 16, 2012.
(b) On February 28, 2012, a non-affiliated third party financing company owned and operated by a relative of the Company’s Chairman of the Board, advanced $500,000 to the Company to build spray rigs. Prior to any of the spray rigs being built, the advance was converted to a promissory note due and payable from the Company to the non-affiliated finance company and subsequently assigned by it to the Chairman on April 16, 2012.
Note 12. Net Income (Loss) Per Common Share – Basic and Diluted.
Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. Common stock equivalents were not considered in calculating diluted net loss per common share for the quarters ended March 31, 2012 and 2011 as their effect would be anti-dilutive. For March 31, 2012, a total of 5,374,848 shares of common stock - of which 2,324,848 shares underlie vested and exercisable stock options and 2,500,000 shares underlie warrants - were excluded from the calculation of diluted earnings per common share as the exercise prices were greater than or equal to the market value of the common shares. Such options and warrants could be included in the calculation in the future if the market value of the Company’s common shares increases and is greater than the exercise price of these options and warrants. For March 31, 2011, a total of 1,859,208 shares of common stock - of which 859,208 shares underlie vested and exercisable stock options and 1,000,000 shares underlie warrants - were excluded from the calculation of diluted earnings per common share as the exercise prices were greater than or equal to the market value of the common shares. Such options and warrants could be included in the calculation in the future if the market value of the Company’s common shares increases and is greater than the exercise price of these options and warrants.
Note 13. Securities Transactions.
During the quarter ended March 31, 2012, the Company issued an aggregate of 415,145 shares of restricted common stock, par value $.01 per share, to a non-employee director for advisory and consulting services, which transaction was valued and recorded at $236,633.
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Prior SEC Filings are through the
SEC EDGAR SERVICE.
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