FORU Holdings, Inc.

CIK:0000949189|SEC Filings

Basic and Diluted Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2011

Basic and Diluted Earnings (Loss) Per Share

The Company computes earnings (loss) per share under two different methods, basic and diluted, and presents per share data for all periods in which statements of operations are presented. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock and common stock equivalents outstanding. The table below shows the calculation of basic and diluted loss per share for the three and nine month periods ended September 30, 2011 and 2010, respectively:

	Three months ended						Nine months ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Loss:
Net loss from continuing operations attributable to Capsalus Corp.	$	(285,137	)	$	(1,556,606	)	$	(2,093,267	)	$	(2,785,341	)
Net (loss) income from discontinued operations		(2,331	)		191,476			(5,846	)		(1,215,941	)
Net loss attributable to Capsalus Corp.	$	(287,468	)	$	(1,365,129	)	$	(2,099,133	)	$	(4,001,282	)


Number of shares:
Weighted-average shares outstanding		414,009,216			383,364,985			406,852,859			297,090,592
Loss per share:
Net loss from continuing operations attributable to Capsalus Corp. per common share (basic and diluted)	$	-		$	-		$	(0.01	)	$	(0.01	)
Net loss from discontinued operations per common share (basic and diluted)	$	-		$	-		$	-		$	-
Net loss attributable to Capsalus Corp. per common share (basic and diluted)	$	-		$	-		$	(0.01	)	$	(0.01	)

As of September 30, 2011, the Company had (i) 200,000 shares of common stock issuable upon the exercise of outstanding warrants, (ii) 56,057,247 shares of common stock issuable under convertible financing arrangements and (iii) 19,113,972 shares of common stock issuable as contingent consideration. As of September 30, 2010, the Company had (i) 1,240,000 shares of common stock issuable under convertible preferred stock arrangements, (ii) 200,000 shares of common stock issuable upon the exercise of outstanding warrants and (iii) 86,284,218 shares of common stock issuable under convertible financing arrangements. These 75,371,219 and 87,724,218 shares as of September 30, 2011 and 2010, respectively, which would be reduced by applying the treasury stock method, were excluded from diluted weighted average outstanding shares amount for computing the net loss per common share, because the net effect would be antidilutive for each of the periods presented.

Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
Statements of Cash Flows (Unaudited) (USD $)	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net loss from continuing operations	$ (2,093,267)	$ (2,785,341)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,487	19,129
Amortization of deferred financing costs	4,064	12,992
Amortization of debt discount	550,961	1,192,841
Gain on warrants, derivatives and share liability	(690,807)	0
Excess of warrant liability and embedded derivatives over debt balance	34,800	0
Amortization of prepaid management fees	0	52,500
Accretion of interest on long-term debt	0	120,097
Loss on sale of marketable securities	0	12,844
Common stock issued for services	403,012	177,613
(Increase) decrease in operating assets:
Other current assets	50,000	86,631
Increase in operating liabilities:
Accounts payable and accrued expenses	639,847	159,650
Total adjustments	1,000,364	1,834,296
Net cash used in operating activities	(1,092,903)	(951,045)
Cash flows from investing activities:
Proceeds from the sale of marketable securities	0	3,444
Acquisitions, net of cash acquired	0	(103,500)
Proceeds from the sale of property and equipment	0	0
Investments	(217,500)	0
Net cash used in investing activities	(217,500)	(100,056)
Cash flows from financing activities:
Proceeds from short term notes payable	1,140,000	1,354,118
Payments on short term notes payable	(115,372)	(258,117)
Proceeds from long-term debt	0	400,000
Payments on long-term debt	(10,000)	(30,000)
Proceeds from the sale of common stock	250,000	116,500
Proceeds from the sale of treasury stock	0	48,507
Net cash provided by financing activities	1,264,628	1,631,008
Cash flows from discontinued operations:
Net cash used in operating activities	0	(36,913)
Net cash provided by investing activities	0	31,000
Net cash provided by (used in) financing activities	13,153	(50,118)
Net cash provided by (used in) discontinued operations	13,153	(56,031)
Net increase (decrease) in cash	(32,622)	523,876
Cash, beginning of period	36,662	60,144
Cash, end of period	4,040	584,020
Supplemental cash and non-cash flow information
Beneficial conversion feature related to short-term debt	0	(2,413,158)
Liabilities for warrants to purchase common stock	347,490	0
Embedded derivatives	700,886	0
Common stock issued for prepaid marketing fees	0	56,000
Common stock issued to pay accounts payable	23,000	41,875
Common stock issued for conversion of short-term debt	19,000	1,106,037
Common stock issued for accrued interest	27,293	0
Common stock issued in connection with the acquisition of Guava	210,000	0
Conversion of preferred stock into common stock	0	88,000
Unrealized gain (loss) on marketable securities	0	(12,065)
Cash paid for interest	7,120	9,308
Loss on sale of treasury stock	$ 0	$ (173,668)

Balance Sheets (Unaudited) (USD $)	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash	$ 4,040	$ 36,662
Current assets of discontinued operations	9,879	65,983
Other current assets	0	54,064
Total Current Assets	13,919	156,709
Property and equipment, net	15,098	23,585
Goodwill	2,014,752	2,014,752
Intangible assets, net	1,953,700	1,743,700
Investments	607,500	590,000
TOTAL ASSETS	4,604,969	4,528,746
CURRENT LIABILITIES
Accounts payable	569,559	287,663
Accrued compensation	286,891	186,888
Accrued interest	388,352	180,697
Preferred unit subscription payable	0	200,000
Current liabilities of discontinued operations	736,140	776,245
Embedded derivatives and share liability	206,680	0
Short-term notes payable and other debt	2,466,379	1,651,986
Current portion of long-term debt obligations	425,000	80,000
Total Current Liabilities	5,079,001	3,363,479
Liabilities for warrants to purchase common stock	150,889	0
Long-term debt obligations, net of current portion	1,540,886	1,452,690
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 500,000,000 shares authorized, 424,628,781 and 388,620,388 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively	424,629	388,620
Treasury stock	(105,000)	(105,000)
Additional paid-in capital	30,277,811	30,093,091
Accumulated deficit	(32,763,247)	(30,664,134)
Total Stockholders' Deficit	(2,165,807)	(287,423)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 4,604,969	$ 4,528,746