Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

 

FORM 10-Q

_________________

(Mark One)  
[X]

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

For the quarter ended June 30, 2011

   
[_]

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: 333-149978

_____________________

 

THERAPY CELLS, INC.

fka DIAMOND INFORMATION INSTITUTE, INC.

(Exact name of registrant as specified in its charter)

_____________________

 

New Jersey   22-2935867

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employer Identification No.)
     
1870 E. Sahara Avenue, Suite 1515, Las Vegas, Nevada   89104
(Address of principal executive offices)   (Zip Code)

(702) 666-8570

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  [_]    No  [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  [X]    No  [_]

 

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  [X]    No  [_]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  [X_]    No  [_]

 

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

 

Large accelerated filer [_]   Accelerated  filer [_]
     
Non-accelerated filer [_]   Smaller reporting company [X]
   
  Emerging Growth Company [_]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  [_]    No  [X]

 

The number of shares of Common Stock, $0.0001 par value, outstanding on June 30, 2011 was 1,898,480.

 

 

 

     

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements.

 

 

THERAPY CELLS, INC., fka DIAMOND INFORMATION INSTITUTE, INC.

 

FINANCIAL STATEMENTS

 

JUNE 30, 2011

(Unaudited)

 

 

 

THERAPY CELLS, INC., fka DIAMOND INFORMATION INSTITUTE, INC.

 

TABLE OF CONTENTS

 

JUNE 30, 2011

(Unaudited)

 

 

 

 

Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010 (unaudited) F-2
   
Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2010 (unaudited) F-3
   
Statement of Stockholder’s Equity (Deficit) as of June 30, 2011 (unaudited) F-4
   
Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010 (unaudited) F-5
   
Notes to the Financial Statements F-6 thru F-12

 

 

 

 

 

 

 

 

 

  F-1  

 

 

 

THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2011 AND DECEMBER 31, 2010

(Unaudited)

 

    June 30, 2011     December 31, 2010  
    (Unaudited)     (Unaudited)  
ASSETS            
Current Assets                
Accounts Receivable – related party   $ 29,505     $ 29,505  
Prepaid Expenses     33,333       33,333  
Total Current Assets     62,838       62,838  
                 
Other Assets                
Property & Equipment – net     983       983  
Total Other Assets     983       983  
TOTAL ASSETS   $ 63,821     $ 63,821  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Liabilities                
Current Liabilities                
Accrued Interest Payable   $ 102,196     $ 73,215  
Accounts Payable – related Party     253,722       253,722  
Accounts Payable & Accrued Liabilities     21,614       34,014  
Bank Overdraft     0       6,429  
Convertible Notes Payable     317,227       335,227  
Total Current Liabilities     694,759       702,607  
Total Liabilities     694,759       702,607  
                 
Stockholder’s Equity                
Accumulated Deficit     (1,672,349 )     (1,672,349 )
Additional Paid in Capital     2,440,034       2,233,173  
Common stock, $0.0001 par value     192       153  
Forex adjustments     (13,941 )     (13,941 )
Series A Preferred Stock, $0.0001 par value     90       0  
Series B Preferred Stock, $0.0001 par value     23       13  
Series C Preferred Stock, $0.0001 par value     25       25  
Retained Earnings (Loss)     (1,185,860 )     0  
Net Income     (205,581 )     (1,185,860 )
Total Stockholder’s Equity     (630,938 )     (638,786 )
Total Liabilities and Equity   $ 63,821     $ 63,821  

 

 

See accompanying notes to financial statement

 

 

 

  F-2  

 

 

THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

STATEMENT OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

(Unaudited)

 

    For the Three Months Ended June 30,     For the Six Months Ended June 30,  
    2011     2010     2011     2010  
CONSULTING REVENUE   $ 0     $ 126,265     $ 0     $ 126,265  
Total Income     0       126,265       0       126,265  
                                 
OPERATING EXPENSES                                
Depreciation Expense     0       198       0       198  
General and Administrative Expense     0       364,895       0       364,895  
Impairment Expense     0       511,918       0       511,918  
Forex Expense (or Gain)     0       6,049       0       6,049  
Interest Expense     28,981       8,460       28,981       8,460  
Loss on disposal of assets     0       8,039       0       8,039  
Compensation Expense     176,600       0       176,600       0  
Total Operating Expenses     205,581       899,559       205,581       899,559  
NET INCOME (LOSS) FROM OPERATIONS     (205,581 )     (773,294 )     (205,581 )     (773,294 )
                                 
LOSS BEFORE TAXES     (205,581 )     (773,294 )     (205,581 )     (773,294 )
Provision for Income Taxes     0       0       0       0  
NET ORDINARY INCOME (LOSS)   $ (205,581 )   $ (773,294 )   $ (205,581 )   $ (773,294 )
                                 
NET LOSS PER COMMON SHARE - BASIC   $ (0.13 )   $ 0.00     $ (0.12 )   $ 0.00  
NET LOSS PER COMMON SHARE - DILUTED   $ (0.02 )   $ 0.00     $ (0.02 )   $ 0.00  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC     1,530,000       256,912,044       1,720,000       256,917,944  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED     11,790,000       256,912,044       12,180,000       256,917,944  

 

 

See accompanying notes to financial statement

 

 

 

  F-3  

 

 

THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

AS OF JUNE 30, 2011

(Unaudited)

 

  Common Shares   Preferred Shares   Additional Paid- in   Accumulated Other Comprehensive Income   Accumulated   Stockholders’ Equity  
  Shares   Amount   Shares   Amount   Capital   (Loss)   Deficit   (Deficit)  
Balance 12-31-2009   11,813,100   $ 11,814     –   $ –   $ 1,660,535   $ –   $ (1,672,349 ) $ –  
Reverse Split 1000:1   11,814     (11,813 )   –     –     11,813     –     –     –  
Series B Preferred stock issued for cash and services   –     –     134,000     13     334,977     –     –     334,990  
Series C Preferred issued to acquire Serengete   –     –     250,000     25     –     –     –     25  
Common Stock issued for services at $0.12   1,000,000     100     –     –     149,900     –     –     150,000  
Common Stock issued for convertible debt at $0.15   306,666     31     –     –     45,969     –     –     46,000  
Common Stock issued for convertible debt at $0.15   133,333     14     –     –     19,986     –     –     20,000  
Common Stock issued for convertible debt at $0.15   66,667     7     –     –     9,993     –     –     10,000  
Foreign currency translation adjustment   –     –     –     –     –     –     (13,941 )   (13,941 )
Net loss for year ended 12-31-2010   –     –     –     –     –     –     (1,185,860 )   (1,185,860 )
Balance 12-31-2010   1,518,480   $ 153     384,000   $ 38   $ 2,233,173   $ –   $ (2,872,150 ) $ 638,786 )
Common Stock issued for convertible debt at $0.15   120,000     12     –     –     17,988     –     –     18,000  
Series B Preferred stock issued for compensation at $0.15   –     –     10,000     10     14,990     –     –     15,000  
Common Stock issued for Company debts at $0.15   82,667     9     –     –     12,391     –     –     12,400  
Common Stock issued for compensation at $0.15   177,333     18     –     –     26,582     –     –     26,600  
Series A Preferred stock issued for compensation at $0.15   –     –     900,000     90     134,910     –     –     135,000  
Bank overdraft   –     –     –     –     –     –     6,429     6,429  
Net loss for the period ended June 30, 2011   –     –     –     –     –     –     (205,581 )   (205,581 )
Balance, June 30, 2011   1,898,480   $ 192     1,294,000   $ 138   $ 2,440,034   $ –   $ (3,071,302 ) $ (630,938 ) 

 

See accompanying notes to financial statements

 

 

 

 

  F-4  

 

  

THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

STATEMENT OF CASH FLOWS

JANUARY 1 THROUGH JUNE 30, 2011 AND 2010

(Unaudited)

 

 

    For the Six Months Ended  
    June 30, 2011     June 30, 2010  
OPERATING ACTIVITIES                
Net Income (Loss)   $ (205,581 )   $ 0  

Adjustments to reconcile Net Income (Loss) to net cash provided by operations:

               
Accrued Interest Payable     28,981          
Accounts Pay & Accrued Liabilities     (12,400 )        
Bank Overdraft     (6,429 )        
Convertible Notes Payable     (18,000 )        
Accounts Pay – related Party     0       26,131  
Net Cash provided by Operating Activities     (213,429 )     26,131  
                 
INVESTING ACTIVITIES                
Capital Expenditures     0       0  
Net Cash Provided by (Used In) Investing Activities     0       0  
                 
FINANCING ACTIVITIES                
Additional Paid in Capital     206,861          
Common Stock, $0.0001 par value     39          
Series A Preferred Stock, $0.0001 par value     90          
Series B Preferred Stock, $0.0001 par value     10          
Accumulated Deficit     6,429       (26,131 )
Net Cash Provided by Financing Activities     213,429       (26,131 )
                 
NET CHANGE IN CASH                
Cash at beginning of period   $ 0     $ 0  
Cash at end of period   $ 0     $ 0  
                 
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS:                
Cash paid for income taxes   $ 0     $ 0  
Cash paid for interest   $ 0     $ 0  

 

See accompanying notes to financial statement

 

 

 

  F-5  

 

 

THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2011

 

NOTE 1 – NATURE OF OPERATIONS AND BUSINESS CONTINUITY

 

Diamond Information Institute Inc., formerly doing business as Designs by Bergio (the “Company”) was engaged in the design, manufacturing, distribution of fine jewelry throughout the United States and is headquartered from its corporate office in Fairfield, New Jersey. Based on the nature of operations, the Company’s sales cycle experienced significant seasonal volatility with the first two quarters of the year representing 15% - 25% of annual sales and the remaining two quarters representing the remaining portion of annual sales.

 

Effective October 19, 2009, as approved at our shareholder meeting on October 8, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration, Inc. (“Alba”), a Delaware Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue our shareholders a total of 2,585,175 shares of common stock of Alba in exchange for all of the shares owned by the Company’s shareholders. Alba was able to successfully acquire over 99% of the shares of the Company which it later sold to an unrelated third party in the first quarter of 2010. Following the transaction described in the Agreement and other accompanying transactions, our former shareholders own 60% of the common stock issued and outstanding in Alba. Also pursuant to the Agreement, Alba acquired all of the assets and liabilities related to our jewelry business. As a result of the transaction, the Company became a wholly-owned subsidiary of Alba, and all of our operations related to the jewelry business we were in were discontinued due to the subsequent sale in the first quarter of 2010 of 99% of the Company stock to an unrelated third party and the retention of the jewelry business assets and liabilities with the shareholders of Alba. See Note 8

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $1,653,737.00 as of December 31, 2010 and has assets of $63,821.00, liabilities of $717,328.00 and limited operations, which raises substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company finding new management to develop a new business that generates profitable operations in the future and/or to obtain the necessary capital to fund a new business plan.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) to prepare the financial statements, which are presented in US dollars. The Company has adopted a December 31 fiscal year end.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments approximates their fair value because of the short maturity of these instruments.

 

 

 

  F-6  

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Income Taxes

 

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carryforwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

 

Basic Income (Loss) Per Share

 

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 

Impairment of Long-Lived Assets

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 

On June 30, 2010, the Company evaluated the carrying value of its intangible assets, including goodwill. Due to the Company’s current net loss position and uncertainty of cash flow, the Company impaired all intellectual property and goodwill. This resulted in an impairment expense of $138,738.

 

Advertising Costs

 

The Company’s policy regarding advertising is to expense advertising when incurred.

 

Revenue Recognition

 

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

 

 

  F-7  

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

New Authoritative Accounting Guidance

 

On July 1, 2009, the Accounting Standards Codification (“ACS”) became the Financial Accounting Standards Board (“FASB”) officially recognized source of authoritative U.S. generally accepted accounting principles applicable to all public and non-public non-governmental entities, superseding existing FASB, AICPA, EITF and related literature. Rules and interpretive releases of the SEC under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch to ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.

 

FASB ASC Topic 260, “Earnings Per Share”. On January 1, 2009, the Company adopted new authoritative accounting guidance under FASB ASC Topic 260, “Earnings Per Share”, which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.

 

FASB ASC Topic 820, “Fair Value Measurements and Disclosures”. New authoritative accounting guidance under ASC Topic 820, “Fair Value Measurements and Disclosures”, affirms that the objective of fair value when the market for an asset is not active is the price what would be received to sell the asset in an orderly transaction, and clarifies and includes additional factors for determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active. The new accounting guidance amended prior guidance to expand certain disclosure requirements. The Company adopted the new authoritative accounting guidance under ASC Topic 820 during the first quarter of 2009. Adoption of the new guidance did not significantly impact the Company’s consolidated financial statements.

 

Further new authoritative accounting guidance (Accounting Standards Update No. 2009-5) under ASC Topic 820 provides guidance for measuring the fair value of a liability in circumstances in which a quoted price in an active market for the identical liability is not available. In such instances, a reporting entity is required to measure fair value utilizing a valuation technique that uses (i) the quoted price of the identical liability when traded as an asset, (ii) quoted prices for similar liabilities or similar liabilities when traded as assets, or (iii) another valuation technique that is consistent with the existing principles of ASC Topic 820, such as an income approach or market approach. The new authoritative accounting guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction the prevents the transfer of the liability. The foregoing new authoritative accounting guidance under ASC Topic 820 will be effective for the Company’s consolidated financial statements beginning October 1, 2009 and is not expected to have s significant impact on the Company’s consolidated financial statement.

 

FASB ASC Topic 825 “Financial Instruments”. New authoritative accounting guidance under ASC Topic 825, “Financial Instruments”, requires an entity to provide disclosures about the fair value of financial instruments in interim financial information and amends prior guidance to require those disclosures in summarized financial information at interim reporting periods.

 

FASB ASC Topic 855, “Subsequent Events”. New authoritative accounting guidance under ASC Topic 855, “Subsequent Events”, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. ASC Topic 855 defines (i) the period after the balance sheet date during which a reporting entity’s management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and (iii) the disclosures an entity should make about events or transactions that occurred after the balance sheet date. The new authoritative accounting guidance under ASC Topic 855 became effective for the Company’s financial statements for periods ending after June 15, 2009. Effective, February 24, 2010, the FASB issued Accounting Standards Update (“ASU”) No 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements” which revised certain disclosure requirements. ASU No. 2010-09 did not have a significant impact on the Company’s consolidated financial statements. The Company evaluated subsequent events, which are events or transactions that occurred after December 31, 2009 through the issuance of the accompanying consolidated financial statements.

 

Management does not believe that any other recently issued by not yet effective accounting pronouncements, if adopted, would affect the accompanying consolidated financial statements.

 

 

 

  F-8  

 

 

NOTE 3 – RELATED PARTY TRANSACTIONS

 

The Company received periodic advances from its principal stockholder based on the Company’s cash flow needs. The Company has liabilities payable due to various related parties totaling $588,949 as of December 31, 2010. The liabilities are comprised of 1) short- term advances and trade payables bearing no interest, and 2) convertible notes bearing interest at 10.0% per annum.

 

The Company has receivables due from various related parties with a total balance of $29,505 as of December 31, 2010. The receivables do not accrue interest and are due upon demand and were the result of services performed by the Company for the related parties.

 

NOTE 4 – COMMON STOCK

 

Articles of Incorporation Amendment and Stock Split - The Company’s Certificate of Incorporation, as amended, authorizes the issuance of up to 25,000,000 shares of common stock at a par value of $0.001 per share. On April 1, 2010, the Company’s Board of Directors ratified a reverse stock split of 1000 to 1.

 

This resulted in common stock outstanding decreasing from 11,863,100 to 11,814 which were owned by the Company’s 10 shareholders.

 

Effective April 12, 2010, the Company’s Certificate of Incorporation was amended to authorize 3,000,000,000 shares consisting of 2,900,000,000 common stock at par value $0.001 and 100,000,000 Preferred stock at par value of $0.001. Further designating 1,000,000 shares as Series A Preferred, par value $0.001, 34,000,000 shares as Series B Preferred, par value $0.001, 30,000,000 shares as Series C Preferred, par value $0.001 and 35,000,000 shares as Series D Preferred, par value $0.001.

 

Effective May 18, 2010, the Company’s Certificate of Incorporation was amended to reduce the par value from $0.001 to $0.0001 and to change the authorized 3,000,000,000 shares to consist of 2,900,000,000 common stock at par value $0.0001 and 100,000,000 Preferred stock at par value of $0.0001. Further designating 1,000,000 shares as Series A Preferred, par value $0.0001, 50,000,000 shares as Series B Preferred, par value $0.0001, 30,000,000 shares as Series C Preferred, par value $0.0001 and 5,000,000 shares as Series D Preferred, par value $0.0001.

 

On April 1, 2010, Company issued 10 Preferred A shares for $10,000 Cash.

 

On May 31, 2010, Company issued 1,000,000 (post-split) shares of common stock at $0.15 per share, under employment agreements with its then three officers in advance of services totaling $150,000. As of September 30, 2010, two of the officers have resigned and $116,667 has been recorded as compensation. (Form 10-Q/A2 filed 4-26-2011 for period 6-30-2010 ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds, Common Stock states: “On May 31, 2010, the Company issued 1,500,000,054 shares of common stock at $0.0001 per share, in exchange for services totaling $150,010”. Later, in the Company’s 10-Q filed 9-22-2011 for period 9-30-2010, under NOTE 9 – SUBSEQUENT EVENTS: ”On August 22, 2011 the Company effectuated a reverse-split of its common shares on a 1,500 shares for one basis. All references to common stock in these financial statements have been retroactively restated to show the effect of this action”.).

 

 

 

  F-9  

 

 

 

NOTE 4 – COMMON STOCK (CONTINUED)

 

On April 8, 2011, Company converted $18,000 of Notes payable at $0.15 into 120,000 common shares and recorded $18,000 reduction of Accrued Pay and Accrued Liabilities.

 

On April 8, 2011, Company issued 10,000 Series B preferred shares @$0.15 for compensation and recorded $15,000 compensation expense.

 

On April 11, 2011, Company issued 900,000 Preferred A shares to Christopher Glover for services at $0.15 per share in amount of $135,000.

 

On April 19, 2011, Company issued 82,667 common shares at $0.15 for payment of Company debts and recorded $12,400 of operating expenses.

 

On April 19, 2011, Company issued 177,333 common shares at $0.15 for payment of compensation and recorded $26,600 compensation expense.

 

On May 20, 2011, Company filed Articles of Amendment adopted February 28, 2011 changing Article 1. Company Name from Diamond Information Institute Inc to Therapy Cells, Inc. and Article 4. Authorized Shares as follows: “On May 20, 2011, an amendment to the Certificate of Incorporation was filed which authorizes shares consisting of 2,800,000,000 shares of common stock, par value $0.0001, and 200,000,000 shares of preferred stock, par value $0.0001, a decrease to the authorized shares of Series B preferred stock, from 50,000,000 to 10,000,000 shares, a decrease to the authorized shares of Series C preferred stock, from 30,000,000 to 10,000,000 shares and to increase the authorized 5,000,000 shares of Series D preferred to 30,000,000 shares.”

 

Debt Conversions - In July 2010, Company converted $46,000.00 of note debt at $0.15 into 306,667 common shares. On November 19, 2010, Company converted $10,000 of note debt into 66,667 common shares. On November 22, 2010, Company converted $20,000 of note debt into 133,333 common shares. (Note conversions adjusted to post 1500:1 RS of August 22, 2011).

 

Restricted Share Issuances - In January 2009, the Company agreed to issue its SEC counsel, 100,000 shares of restricted common stock with a fair value of $0.40 per share or $40,000 for services in connection with the effective filing of Form 15c-211 and submittal to FINRA through a market maker. The Share-Based Compensation expense for the three and nine months ended September 30, 2009 amounted to $0 and $40,000, respectively.

 

In February 2009, the Company issued to its CEO 50,000 shares of restricted common stock with a fair value of $0.40 per share or $20,000 for services as a Board of Directors member throughout 2009. The Share-based Compensation expense for the three and nine months ended September 30, 2009 amounted to $5,000 and $15,000, respectively.

 

In February 2009, the Company issued its SEC counsel 20,000 shares of restricted common stock with a fair value of $0.40 per share or $8,000 for legal services to be provided for the Company’s SEC filings for the 2009 reporting year.

 

On April 10, 2010, the Company issued 134,000 shares of Preferred B stock at $2.50 per share as compensation for $274,990 services and $60,000 cash.

 

On May 17, 2010, the Company issued 250,000 shares of Preferred C stock (“Series C”) in exchange for all the shares issued and outstanding of Serengeti Consulting, Inc. valued at $0.0001 per share.

 

 

 

  F-10  

 

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

Employment Agreement

 

On May 31, 2010, the Company entered into an employment agreement (“Employment Agreement”) with its Chief Financial Officer (“CFO”), which requires that the CFO be paid an annual base salary of $50,000 for one (1) year from the date of signing and the issuance of 500,000,000 shares of the Company’s common stock. Either party may extend the Employment Agreement for additional one (1) year periods.

 

At December 31, 2010, the Company owned minimal property and equipment with depreciated book value of $983 

 

NOTE 6 – INCOME TAXES

 

At December 31, 2009, the Company had approximately $1,600,000 of federal net operating tax loss carryforwards expiring at various dates through 2029. The Tax Reform Act of 1986 enacted a complex set of rules which limits a company’s ability to utilize net operating loss carryforwards and tax credit carryforwards in periods following an ownership change. These rules define an ownership change as a greater than 50 percent point change in stock ownership within a defined testing period which is generally a three-year period. As a result of stock which may be issued by us from time to time and the conversion of warrants, options or the result of other changes in ownership of our outstanding stock, the Company may experience an ownership change and consequently our utilization of net operating loss carryforwards could be significantly limited.

 

Based upon the net losses historically incurred and, the prospective global economic conditions, management believes that it is not more likely than not that the deferred tax asset will be realized and has provided a valuation allowance of 100% of the deferred tax asset.

 

NOTE 7 – DISCONTINUED OPERATIONS

 

The Company’s former jewelry business, which was discontinued on October 19, 2009 when all assets and liabilities related to this business were acquired by Bergio International, Inc. (formerly known as Alba Mineral Exploration, Inc.) has been accounted for as discontinued operations in accordance with FASB ASC Topic 205 “Discontinued Operations”. The results of operations of this business have been removed from the results of continuing operations for all periods presented. The assets and liabilities of discontinued operations have been reclassified and are segregated in the balance sheets.

 

NOTE 8 – SUBSEQUENT EVENTS

 

On February 2, 2010 Bergio International, Inc. (the “Seller”), owner of 99% of the outstanding common shares of the Company, entered into a share purchases agreement (the “Agreement”) with Macau Consultants and Advisory Services Inc. (the “Buyer”). In accordance with the terms and provisions of the Agreement, the Seller sold and aggregate of 11,852,700 shares of common stock of the Company to Buyer in exchange for $225,000. The closing and consummation of the Agreement occurred March 18, 2010. New officers and directors of the Company were appointed and a change of control of the Company occurred.

 

 

 

 

  F-11  

 

 

NOTE 9 – ACQUISITION OF SUBSIDIARIES

 

On September 28, 2009 Diamond Information Institute Inc. (“Diamond”) entered into a Memorandum of Understanding (“MOU”) with Serengeti Consulting Inc. (“Serengeti”) to purchase all of the capital stock of Serengeti. This agreement was approved by the Board on May 14, 2010 and completed on May 17, 2010. Diamond issued 250,000 shares of Preferred C stock in a stock for stock transaction for all of the shares of Serengeti. Serengeti is currently a wholly owned subsidiary of Diamond. As part of this transaction, the Company recognized a purchase price of $25, which is comprised of the following components:

 

Property and equipment, net   $ 277,279  
Intangible assets     373,767  
Net liabilities acquired     (651,021 )
Purchase Price   $ 25  

 

On June 30, 2010 the Company evaluated the carrying value of its intangible assets, including goodwill. Due to the Company’s current net loss position and uncertainty of cash flow, the Company impaired all intellectual property and goodwill. This resulted in an impairment expense of $373,767.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  F-12  

 

 

FORWARD-LOOKING STATEMENTS

 

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect”, or “anticipate”, or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update and forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-Q, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

 

  · Our current lack of working capital;

 

  · Increased competitive pressures from existing competitors and new entrants;

 

  · Increases in interest rates or our cost of borrowing or default under any material debt agreements;

 

  · Inability to raise additional financing;

 

  · Deterioration in general or regional economic conditions;

 

  · Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

 

  · Changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

 

  · The fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

 

  · Inability to efficiently manage our operations;

 

  · Loss of customers or sales weakness;

 

  · Inability to achieve future sales levels or other operating results;

 

  · Key management or other unanticipated personnel changes;

 

  · The unavailability of funds for capital expenditures; and

 

  · Operational inefficiencies in distribution or other systems

 

 

 

  2  

 

 

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Item 1A, Risk Factors, in this document.

 

Throughout this Annual Report references to “we”, our”, “us”, “Diamond”, “the Company”, “Therapy Cells” and similar terms refer to Therapy Cells, Inc., fka Diamond Information Institute, Inc.

 

Our securities as of September 8, 2008 are registered under the Securities Act of 1933 and we will file reports and other information with the Securities and Exchange Commission as a result. Additionally, we shall file supplementary and periodic information, documents and reports that are required under section 13(a) and Section 15(d) of the Exchange Act , as amended.

 

Any annual, quarterly, special reports and other information filed with the SEC can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, DC 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  3  

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

OVERVIEW

 

Diamond Information Institute, Inc. was incorporated in the State of New Jersey in October of 1988 and had minimal activity until 1995 when it began in the business of jewelry manufacturing. Diamond has been engaged in the design and manufacture of upscale jewelry from 1995 through October 2009. Effective October 19, 2009, as approved at our shareholder meeting on October 5, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration, Inc. (“Alba”), a Delaware Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue our shareholders a total of 2,585,175 shares of common stock in Alba in proportion to their holdings in our company. Following the transaction described in the Agreement and other accompanying transactions, our shareholders own 60% of the common stock issued and outstanding in Alba. Also pursuant to the Agreement, Alba acquired all of the assets and liabilities related to our business. As a result of the transaction the company became a wholly-owned subsidiary of Alba, and all of our operations related to the jewelry business we were in were discontinued. Based upon consummation of this Share Purchase Agreement and the subsequent change in control of the Company, the business operations of the Company will change as follows:

 

OVERVIEW OF CURRENT OPERATIONS

 

The Company’s business operations will involve embarking upon a project to make Venture Capital Investments into private and public Companies. Management plans on obtaining the necessary capital for these venture capital investments via borrowings and investments into the Company. The eligible companies qualifying for an investment from the Company will be companies who currently have a dynamic business plan and are nearing completion of the establishment of that business plan or are currently established businesses with a very low overhead and cost of sales thus giving them a large increase in positive cash flow with the injection of new capital into the company. A specific emphasis of the Company will be in the Green Energy as well as the renewable energy fields and the development of Software as a Service (SAAS) sector. The Company will also be operating a consultancy division to assist existing private companies to go public as well as assisting companies who are already public to restructure and raise additional money from the capital markets. There are numerous projects already submitted which are currently being considered for funding.

 

The Company plans on using consultants to execute its business plan as much as possible. That way management is able to access the very best in the industry sectors that the Company will be operating in and the Company will not be encumbered with considerable expensive overhead when the marketplace becomes soft as they all do from time to time. Management believes that the Company’s business model should insulate it from major market downturns since the market sector the Company will be operating in will be fee based. Management further believes that when the general market enters a Bear Market phase, there will be the most demand for the services the Company will be providing. As well as the consultancy side of the Company’s business, the Company will be able to monitor and assist any companies it invests in to ensure the Company’s investments grow and mature on a timely basis with as little harm from cycles in the specific investment sectors that the Company invests in as possible

 

General Business Development

 

Diamond Information Institute, Inc. was incorporated in the State of New Jersey in October of 1988 and had minimal activity until 1995 when it began in the business of jewelry manufacturing. Diamond has been engaged in the design and manufacture of upscale jewelry from 1995 through October 2009. Effective October 19,2009, as approved at our shareholder meeting on October 8, 2009, we entered into a Share Exchange Agreement with Alba Mineral Exploration, Inc. (“Alba), a Delaware Corporation (the “Agreement”). Pursuant to the Agreement, Alba agreed to issue our shareholders a total of 2, 585,175 shares of common stock in Alba in proportion to their holdings in our company. Following the transaction described in the Agreement and other accompanying transactions, our shareholders own 60% of the common stock issued and outstanding in Alba. Also pursuant to the Agreement, Alba acquired the assets and liabilities related to our business. As a result of the transaction the company became a wholly-owned subsidiary of Alba, and all of our operations related to the jewelry business were discontinued.

 

Pursuing a new line of business: On May 10, 2011, Company authorized the formation of Therapy Cells JV, Inc. and filed Articles of Incorporation on May 13, 2011 with the first Board of Directors consisting of Christopher Glover, Patrick Casey, and Garry Green.

 

 

 

  4  

 

 

Domestication into Wyoming

 

Pursuant to Board of Director’s Resolution dated April 11, 2011, The company “Resolved, that the Company authorize and enact the following two corporate actions: (a) a change of state of incorporation and domicile from the state of New Jersey to the state of Wyoming; and (b) a change of the name of the Company from DIAMOND INFORMATION INSTITUTE, INC. to THERAPY CELLS, INC. ….” With an effective date of May 20, 2011. Company filed Articles of Domestication of Diamond Information Institute, Inc. from New Jersey to Wyoming.

 

Name Change from Diamond Information Institute Inc. to Therapy Cells Inc.

 

Concurrent with domestication into Wyoming on May 20, 2011, Company filed Articles of Amendment changing its name from Diamond Information Institute Inc to Therapy Cells Inc.

 

Agreement for the Purchase of Common Stock and Warrants

 

Bergio International, Inc. (the “Seller”), as record owner or agent representing 11,863,100 shares of common stock of Diamond Information Institute, Inc., a corporation formed under the laws of the State of New Jersey (the “Company”) entered into a share purchase agreement dated February 2, 2010 (the “Share Purchase Agreement”) with Macau Consultants and Advisory Services Inc. (the “Buyer”). In accordance with the terms and provisions of the Share Purchase Agreement, the Seller sold an aggregate of 11,863,100 shares of common stock (the “Common Stock”) of the Corporation to the Buyer in exchange for $225,000 (the “Purchase Price”). The closing and consummation of the Share Purchase Agreement occurred March 18, 2010 (the Closing Date”). The Purchase Price shall be paid as follows: (i) $50,000 initial deposit, which as of the date of this Current Report has been paid; (ii) $55,000 within thirty days from the Closing Date, which is due approximately April 18, 2010’ (iii) $60,000 within sixty days from the Closing Date, which is due approximately May 18, 2010; and (iv) $60,000 within ninety days from the Closing Date, which is approximately June 18, 2010. As of the date of this Current Report, new officers and directors of the Company have been appointed and the change in control is being effected. A subsequent current report on form 8-K will be filed disclosing beneficial ownership and control of the Company.

 

Current Business Operations

 

The Company was organized under the laws of the State of New Jersey in October of 1988. Since approximately 1995, the Company had been involved in the business of designing and manufacturing jewelry under its trade name of the Bergio” line. Based upon consummation of the Share Purchase Agreement and the subsequent change in control of the Company, the business operations of the Company will change.

 

The Company’s business operations will involve embarking upon a project to make Venture Capital Investments into private and public Companies. The eligible companies qualifying for and investment from the Company will be companies who currently have a dynamic business plan and are nearing completion of the establishment of that business plan or are currently established businesses with positive cash flow but require additional funding to develop existing markets or expand into new markets. Emphasis will be on businesses with a very low overhead and cost of sales thus giving them a large increase in positive cash flow with the injection of new capital into the company. A specific emphasis of the Company will be in the Green Energy as well as the renewable energy fields and the development of Software as a Service (SAAS) sector. The Company will also be operating a consultancy division to assist existing private companies to go public as well as assisting companies who are already public to restructure and raise additional money from the capital markets.

 

 

 

  5  

 

 

The Company plans on using consultants to execute its business plan as much as possible. That way management is able to access the very best in the industry sectors that the Company will be operating in and the Company will not be encumbered with considerable expensive overhead when the marketplace becomes soft as they all do from time to time. Management believes that the Company’s business model should insulate it from major market downturns since the market sector the Company will be operating in will be fee based. Management further believes that when the general market enters a Bear Market phase, there will be the most demand for the services the Company will be providing. As well as the consultancy side of the Company’s business, the Company will be able to monitor and assist any companies it invests in to ensure the Company’s investments grow and mature on a timely basis with as little harm from cycles in the specific investment sectors that the Company invests in as possible.

 

Management believes that regardless of whether the Company is in a Bear cycle or a Bull market run, there will always be a healthy demand for funds and always a need for business management services to assist those who are floundering. Management believes that the Company has the best of both worlds since the Company should prosper from the Bear and Bull Market cycles. The only determinant for the Company in determining how fast it can grow its business will be in the Company’s success in obtaining the necessary funds for deployment into good qualifying business models. Management of the Company looks forward to the future with great anticipation.

 

Environmental Regulation and Compliance

 

The Unites States environmental laws do not materially impact Diamond’s operations.

 

Government Regulation

 

Currently, the Company is subject to all government regulations that regulate businesses generally such as compliance with regulatory requirements of federal, state, and local agencies and authorities, including regulations concerning workplace safety, labor relations, and disadvantaged businesses. In addition, the Company’s operations are affected by federal and state laws relating to marketing practices in the retail jewelry industry. Diamond is subject to the jurisdiction of federal, various state and other taxing authorities. From time to time, these taxing authorities review or audit the Company.

 

PROPERTIES

 

Currently, the Company leases office space in a shared executive suite located in Las Vegas, Nevada on a monthly basis.

 

On May 6, 2011, Company moved its primary office space to 1870 E Sahara Ave, Suite 1515, Las Vegas, NV 89104.

 

ITEM 3. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES

 

Market Information

 

During the year ended December 31, 2008, we filed for inclusion of our common stock on the Over-the-Counter Bulletin Board (“OTC:BB”). Our Common Stock was approved for trading by FINRA for trading on the OTC:BB under the symbol DIII on January 26, 2009.Since being quoted on the OTC:BB, our common stock has not traded.

 

 

 

  6  

 

 

Holders of Common Stock

 

As of June 30, 2011 we had approximately 32 stockholders of record of the 1,898,480 common shares outstanding.

 

Dividends

 

The payment of dividends is subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements, our financial condition, and other relevant factors.

 

We currently do not intend to pay cash dividends in the foreseeable future on the shares of common stock. We intend to reinvest any earnings in the development an expansion of our business. Any cash dividends in the future to common stockholders will be payable, when, as and if declared by our Board of Directors, based upon the Board’s assessment of :

 

  · Oure financial condition;

 

  · Earnings;

 

  · Need for funds;

 

  · Capital requirements;

 

  · Prior claims of preferred stock to the extent issued and outstanding; and

 

  · Other factors, including any applicable laws.

 

Therefore, there can be no assurance that any dividends on the common stock will ever be paid.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We currently do not maintain any equity compensation plans

  

Issuer Purchases of Equity Securities

 

We did not repurchase any of our securities during the year ended December 31, 2009.

 

 

 

  7  

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Included in 10-Q filed 09-22-2011 for period 09-30-2010, Company reported as follows: “Our new Chief Executive Officer, Christopher Glover, and Chief Financial Officer, Lorne Gale, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 as amended, as of the end of the period covered by this Report. Based on the evaluation effect of this restatement of the financial statements, management has concluded that prior disclosures of disclosure controls and procedures were inaccurate, and as further explained in Footnote 8 to the financial statements for the Company above, Messrs. Glover and Gale concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us as required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. In order to address and remedy deficiencies in the Company’s disclosure controls and procedures, management has initiated the engagement of an experienced third party consultant to address disclosure controls and procedures on an ongoing basis and has also engaged a PCAOB registered accounting firm to review the Form 10-Q and the Company’s financial statements for the period ended September 30, 2010 and all subsequent reporting periods for the Company.

 

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.”

 

Management’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control, as is defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.

 

Our internal control over financial reporting includes policies and procedures that : (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and the receipts and expenditures of company assets are made and in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

 

Management has undertaken an assessment of the effectiveness of our internal control over financial reporting based on the framework and criteria established in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2009.

 

This conclusion has subsequently proved to be inadequate.

 

 

 

  8  

 

 

AUDIT COMMITTEE

 

Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. If and when an audit committee is established, the audit committee’s primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee’s primary duties and responsibilities will be to : (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management’s establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

Following the acquisition of Serengeti Consulting, Inc., Company and auditor were unable to agree over the proper way to account for the acquisition on the books of the Company which resulted in repeated amended 10-Qs for period 06-31-2010. This resulted in late filing of the required 10-Q/A2 for period 06-30-2010 on 04-26-2011. Subsequent to that date, on 9-22-2011, Company filed the Form 10-Q for period 9-30-2010. No further filings with SEC were filed after that date. Company subsequently filed a Form 15 on 02-29-2012 to formally end their duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act. Form 15 Rule 12h-3(b)(1)(i) is relied upon as Company had only 22 shareholders on that date and has never had over 300 shareholders of record. The Company’s 15(d) obligation to file was automatically suspended under previous rules.

 

This Year End 2010 10-Q is being filed almost 9 years after its due date, voluntarily, to file the missing reports prior to the Form 15 with SEC as noted by FINRA. This 10-Q has been prepared without assistance of accountants or auditors from the Company history that has previously been filed with SEC and the OTC. These reports have been prepared from the historical and sometimes conflicting record to the best of the ability of current management. Management believes that filing these reports will have no material effect or change on the Company as all events were reported contemporaneously on the OTC and are already reflected in the Company filings of record with the OTC thru 03-31-2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  9  

 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect our financial position or results of operations.

 

ITEM 1A. RISK FACTORS

 

Risks Relating To Our Planned Business and Marketplace

 

You should carefully consider the risks described below and all other information contained in this annual report on Form 10-Q, including financial statements and the related notes thereto. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known to us, or not presently deemed material by us, may also impair our future operations and performance. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the trading price of our common stock could decline, and you may lose all or part of your investment.

 

Our business may be adversely affected by the recent financial crisis and our ability to access the capital markets.

 

The global financial markets are in turmoil, and the economies of the U.S. and many other countries are in recession, which may be severe and prolonged. This status has resulted in diminished opportunities for liquidity and credit availability, declines in consume confidence, declines in economic growth, increases in unemployment rates, and uncertainty about overall economic stability, and there can be no assurance against further decline. The end markets for certain of our portfolio of prospective companies’ products and services have experienced, and continue to experience, negative economic trends. We are unable to predict the likely duration and severity of this global financial turmoil, and if the current uncertainty continues or economic conditions further deteriorate, our business and the businesses of our portfolio companies could be materially and adversely affected.

 

There is uncertainty regarding the value of our planned investments in restricted securities.

 

We may be required to carry our planned portfolio investments at market value or, if there is no readily available market value, at fair value as determined by us with our Board of Directors having final responsibility for overseeing, reviewing and approving, in good faith, our estimate of fair value. Because of the inherent uncertainty of the valuation of portfolio securities which do not have readily ascertainable market values, our fair value determinations may differ materially from the values a third party would be willing to pay for such securities or the values which would be applicable to unrestricted securities having a public market.

 

The lack of liquidity of restricted securities may adversely affect our planned business.

 

Our portfolio may contain many securities which are subject to restrictions on sale because they will have been acquired from issuers in “private placement” transactions or because we are deemed to be an affiliate of the issuer. Unless an exemption from the registration requirements of the Securities Act of 1933 is available, we will not be able to sell these securities publicly without the expense and time required to register the securities under applicable federal and state securities laws. In addition, contractual or practical limitations may restrict our ability to liquidate our securities in planned portfolio companies, because we may own a relatively large percentage of the issuer’s outstanding securities. Sales may also be limited by unfavorable market conditions. The illiquidity of our investment may preclude or delay the disposition of such securities, which may make it difficult for us to obtain cash equal to the value at which we record our investments.

 

 

 

  10  

 

 

There may be limited publicly available information regarding the companies in which we are contemplating investment.

 

It is possible that some of the securities in our future portfolio may be issued by privately held companies. Many of the securities in our portfolio are issued by privately held companies. There is generally little or no publicly available information about such companies, and we may have to rely on the diligence of our management to obtain the information necessary for our decision to invest. There can be no assurance that such diligence efforts will uncover all material information necessary to make fully informed investment decisions.

 

Some of our planned portfolio companies may be highly leveraged.

 

Some of our planned portfolio companies may have incurred substantial indebtedness in relation to their overall capital base. Such indebtedness often has a term that will require the balance of the loan to be refinanced when it matures. If these companies cannot generate adequate cash flow to meet the principal and interest payments on their indebtedness, the value of our investment in them could be reduced or eliminated through foreclosure on the portfolio company’s assets or by the portfolio company’s reorganization or bankruptcy.

 

Fluctuations may occur in our quarterly results.

 

Our future quarterly operating results may fluctuate materially due to a number of factors including, among others, variation in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our planned portfolio companies’ markets, the ability to find and close suitable investments, and general economic conditions. As a result of these factors, results for any future period should not be relied upon as being indicative of performance in future periods.

 

Our future financial condition and results of operation will depend on our ability to effectively manage any future growth

 

Sustaining growth will depend upon our ability to identify, evaluate, finance, and invest in companies that meet our investment criteria. Accomplishing such results on a cost-effective basis is a function of our marketing capabilities and skillful management of the investment process. Failure to achieve future growth could have a material adverse effect on our business, financial condition, and results of operations.

 

We will be dependent upon management for our future success.

 

Selection, structuring and closing our investments will depend upon the diligence and skill of our management, which is responsible for identifying, evaluating, negotiating, monitoring and disposing of our investments. Our management’s capabilities may significantly impact our results of operations. If we lose any member of our management team and they cannot be promptly replaced with an equally capable team member, our results of operations could be significantly impacted.

 

We will operate in a highly competitive market for investment opportunities.

 

We will compete for attractive investment opportunities with private equity funds, venture capital partnerships and corporations, venture capital affiliates of industrial and financial companies, SBICs and wealthy individuals. Some of these competitors will be substantially larger and have greater financial resources, and some are subject to different and frequently less stringent regulation. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time and there can be no assurance that we will be able to identify and make investments that satisfy our objectives.

 

 

 

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Changes in laws or regulations governing our operations or our failure to comply with those laws or regulation may adversely affect our business.

 

We and our planned portfolio companies are subject to regulation by laws at the local, state and federal level. These laws and regulations, as well as their interpretation, may be changed from time to time. Accordingly, any changes in these laws and regulations or failure to comply with them could have a material adverse effect on our business.

 

Failure to deploy new capital may reduce our return on equity.

 

If we fail to invest our capital effectively, our return on equity may be decreased, which could reduce the price of the shares of our common stock.

 

The market price of our common stock may fluctuate significantly.

 

The market price and marketability of shares of our common stock may from time to time be significantly affected by numerous factors, including our investment results, market conditions, and other influences and events over which we have no control and that may not be directly related to us.

 

Risks Relating to our Common Stock

 

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

 

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, the Financial Industry Regulatory Authority (“FINRA”) has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period then we will be ineligible for quotation on the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealer to sell our securities and the ability of stockholders to sell their securities in the secondary market. We have not been late in any of our SEC reports through December 31, 2009. 

  

Our common stock could be deemed a low-priced “Penny” stock which could make it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid and negatively affect the price of our stock.

 

In the event where our securities are accepted for trading in the over-the-counter market, trading of our common stock may be subject to certain provisions of the Securities Exchange Act of 1934, commonly referred to as the “penny stock” rule as defined in Rule 3a51.1. A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain exception. If our stock is deemed to be a penny stock, trading will be subject to additional sales practice requirements of broker-dealers. These require a broker-dealer to:

 

  · Deliver to the customer, and obtain a written receipt for, a disclosure document;

 

  · Disclose certain price information about the stock;

 

  · Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

 

  · Send monthly statements to customers with market and price information about the penny stock; and

 

  · In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

 

 

 

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Consequently, penny stock rules may restrict the ability or willingness of broker-dealers to trade and/or maintain a market in our common stock. Also, prospective investors may not want to get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares.

 

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

 

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable ground for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for a least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

 

ITEM 2. Recent Sales of Unregistered Securities

 

On January 30, 2009, we authorized the issuance of 100,000 shares of our common stock to Stoecklein Law Group pursuant to its retainer agreement for legal services.

 

On February 11, 2009, we authorized the issuance of 50,000 shares of our common stock to Berge Abajian as compensation for his board services during the 2009 year.

 

On February 26, 2009, we authorized the issuance of 20,000 shares of our common stock to Stoecklein Law Group pursuant to a new retainer agreement for legal services during the 2009 year.

 

We believe that the issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The shares were issued directly by us and did not involve a public offering or general solicitation. The recipients of the shares were afforded an opportunity for effective access to files and records of our company that contained the relevant information needed to make their investment decision, including our financial statements. We reasonably believe that the recipients, immediately prior to issuing the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The recipients had the opportunity to speak with our management on several occasions prior to their investment decision. There were no commissions paid on the issuance of the shares.

 

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

The following exhibits are files as part of this Annual Report.

 

                Incorporated by reference  
Exhibit     Exhibit Description  

Filed

herewith

    Form  

Period

ending

    Exhibit    

 

Filing

date

 
3(i)     Certificate of Incorporation, dated October 24, 1988           Form S-1/A             3(i)       8/28/2008  
3(ii)     Amendment to Certificate of Incorporation dated April 12, 2010           Form 10-Q/A     12/31/2009       3(ii)       12/16/2010  
3(i)(b)     Certificate of Trade Name, dated January 31, 1997           Form S-1/A             3(i)(b)       8/28/2008  
3(i)(c)     Certificate of Amendment to the Certificate of Incorporation Dated May 31, 2007           Form S-1/A             3(i)(c)       8/28/2008  
3(ii)     Bylaws of Diamond Information Institute, Inc           Form S-1/A             3(ii)       8/28/2008  
10.1     Sample Subscription Agreement for the $25,000 unit offering           Form S-1/A             10.1       8/28/2008  
31.1     Certification of Paul Knudson pursuant to Section 302 of the Sarbanes-Oxley Act     X                              
32.1     Certification of Paul Knudson pursuant to Section 906 of the Sarbanes-Oxley Act     X  

 

 

                         

 

 

 

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THERAPY CELLS, INC., FKA DIAMOND INFORMATION INSTITUTE, INC.

 

SIGNATURES

 

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

 

  THERAPY CELLS, INC.,fka DIAMOND INFORMATION INSTITUTE INC.
   
Dated: October 10, 2019 By: /s/ Paul Knudson                      
    Paul Knudson, CEO & CFO

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

  THERAPY CELLS, INC.,fka DIAMOND INFORMATION INSTITUTE INC.
   
Dated: October 10, 2019 By: /s/ Paul Knudson                      
    Paul Knudson, - Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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