| Item 1. Financial Information CONFEDERATE MOTORS, INC. Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| CONFEDERATE MOTORS, INC. Consolidated Statements of Operations (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 6/30/2010 12/31/2009 Parts $ 208,319 $ 205,803 Work in process 20,250 - Motorcycle finished goods 191,541 447,031 Apparel inventory 32,864 - Total Inventory $ 452,974 $ 652,834 Property and Equipment Property and equipment are carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Maintenance, repairs, and minor renovations are charged to expense as incurred. Upon sale or retirement of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in the results of operations. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives or the term of the lease, as appropriate. The estimated useful lives are as follows: vehicles, 5 years; furniture and fixtures, 3 to 5 years; equipment, 3 to 5 years. Revenue Recognition Revenues from the sale of motorcycles and equipment are recognized when products are delivered or shipped. Advance payments from customers are typically required to secure the order and are shown as deferred revenue in the accompanying balance sheets. The Company recognizes revenue from repair services in the same month the service is provided. Earnings per Share In accordance with accounting guidance now codified as FASB ASC Topic 260, Earnings per Share, basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period.Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. The Company had the following potential common stock equivalents at June 30, 2010 and June 30, 2009: | ||||||||||
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[0..0) [0..0] (stub): 'Common stock warrants'
(3..3] [1..1] ( num): '105,000'
Attributes: num=>105 [1..1] num=>000 [1..1]
Row 1
[0..0) [0..0] (stub): 'Total common stock equivalents'
(3..3] [1..1] ( num): '105,000'
Attributes: num=>105 [1..1] num=>000 [1..1]
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[0..0) [0..0] (stub): ''
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2 rows: 1 0
[0..0) [0..0] (stub): ''
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Table attributes: balancesheet,date,revenues,income
| Reclassification Certain amounts in the second quarter 2009 and six months ended June 30, 2009 financial statements have been reclassified to conform to the 2010 presentation.The results of these reclassifications did not materially affect financial position, results of operations or cash flows. Stock-Based Payments Significant amounts of the Companys shares of common stock have been issued as payment to employees and non-employees for services. These are non-cash transactions that require management to make judgments related to the fair value of the shares issued, which affects the amounts reported in the Companys consolidated financial statements for certain of its assets and expenses. For historic fiscal years when there was not an observable active, liquid market for the Companys common stock, the valuation of the shares issued in a non-cash share payment transaction relies on observation of arms-length transactions where cash was received for its shares, before and after the non-cash share payment date. Income Taxes The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. Accounting guidance now codified as FASB ASC Topic 740-20, Income Taxes Intraperiod Tax Allocation, clarifies the accounting for uncertainties in income taxes recognized in accordance with FASB ASC Topic 740-20 by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. FASB ASC Topic 740-20 requires that any liability created for unrecognized tax benefits is disclosed. The application of FASB ASC Topic 740-20 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets. The Company would recognize interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2009 and 2008, respectively, the Company did not record any liabilities for uncertain tax positions. NOTE 2 PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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