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19. Subsequent Events

3 Months Ended

Mar. 31, 2014

Completed Financings with Net Proceeds of $21,528,150

On April 29, 2014, the Company closed the initial round of a private placement in the aggregate sum of $11,106,000 of a private placement resulting in $9,222,900 of net proceeds after payment of fees, expenses and certain accounts payable. On May 6, 2014, the Company closed the second round of this private placement in the aggregate sum of $13,672,500 and $12,305,250 of net proceeds after payment of fees and certain accounts payable. However, given the Company’s plans to grow its existing businesses and potentially pursue acquisitions, this funding may not be sufficient and the Company may need to raise additional capital in the future to fully implement its business plan. The following is a summary of these two rounds of financing:

	First Round			Second Round
	April 29, 2014			May 6, 2014			Total

Shares sold		2,776,500			3,418,125			6,194,625
Price per share	$	4.00		$	4.00		$	4.00
Gross Proceeds		11,106,000			13,672,500			24,778,500

Fees, expenses and payment of certain accounts payable		(1,883,100	)		(1,367,250	)		(3,250,350	)
Net proceeds	$	9,222,900		$	12,305,250		$	21,528,150

Warrants issued		1,110,600	(a)		1,367,251	(b)		2,477,851
Strike price of warrants	$	4.80		$	4.80		$	4.80

(a)	Includes warrants to purchase 832,950 shares of common stock issued with the financing and warrants to purchase 277,650 shares of common stock issued to the placement agent.
(b)	Includes warrants to purchase 1,025,438 shares of common stock issued with the financing and warrants to purchase 341,813 shares of common stock issued to the placement agent.

The purchasers of Common Stock received warrants to purchase three shares of Common Stock for every ten shares of Common Stock such Investors purchased in the Private Placement at a strike price of $4.80. The purchase price of each share of Common Stock was $4.00, which was minimum price under the terms of the Private Placement and approximated the volume weighted average market price for ten days prior to the close.

The following pro forma financial information has been prepared as if the above financings had occurred on March 31, 2014. The information in these pro forma financials for RestorGenex has been derived from the unaudited balance sheets as of March 31, 2014 and the information presented above on the financings.

RestorGenex Corporation

Pro Forma Balance Sheets

March 31, 2014

	March 31, 2014 (a)
				Pro Forma			Pro Forma
	As Reported			Adjustments			Adjusted
ASSETS

Current assets
Cash and equivalents	$	222,071			21,528,150	(b)	$	21,750,221
Prepaid expenses and deposits		2,455,881			–			2,455,881
Total current assets		2,677,952			21,528,150			24,206,102

Property and equipment, net		81,563			–			81,563
Intangible assets		9,725,258			–			9,725,258
Goodwill		13,962,880			–			13,962,880
Total assets	$	26,447,653		$	21,528,150		$	47,975,803

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable	$	1,601,721		$	–		$	1,601,721
Deferred salary		838,476			–			838,476
Accrued interest		633,961			–			633,961
Other accrued expenses and liabilities		1,829,119			–			1,829,119
Payable to officer and former officer		156,358			–			156,358
Rent liability for facilities no longer occupied		1,121,495			–			1,121,495
Notes payable		2,932,002			–			2,932,002
Obligation to issue stock for transfer of liabilities		1,581,641			–			1,581,641
Total current liabilities		10,694,773			–			10,694,773

Long-term liability - deferred taxes on acquisition		3,538,051			–			3,538,051

Commitments and contingencies

Shareholders' equity
Series C 10% Preferred Stock, $0.001 par value: 1,000,000 shares authorized, 0 shares issued and outstanding		–			–			–
Series D 10% Preferred Stock, $0.001 par value: 500,000 shares authorized, 0 shares issued and outstanding		–			–			–
Series E 5% Preferred Stock, $0.001 par value: 10,000 shares authorized; 0 shares issued and outstanding		–			–			–
Common stock, $0.001 par value: 1,000,000,000 shares authorized; 8,683,785 shares issued and outstanding		8,684			6,195	(c)		14,879
Additional paid-in capital		74,670,219			21,521,955	(d)		96,192,174
Accumulated deficit		(62,464,074	)		–			(62,464,074	)
Total shareholders' equity		12,214,829			21,528,150			33,742,979
Total liabilities and shareholders' equity	$	26,447,653		$	21,528,150		$	47,975,803

(a)

Assumes the financings occurred on March 31, 2014

(b)

Net cash proceeds to the Company from financings

(c)

Value of 6,194,625 shares sold in the financings at a par value of $0.001

(d)

Difference between net cash proceeds and value of shares sold

Issuance of Note

In April 2014, the Company agreed to issue to our law firm a non-interest bearing convertible note in the aggregate principal amount of $875,000 (the “Note”) as payment in full for the amounts owed to them at that time, contingent on the Company successfully concluding a Cash Proceeds Event, including the $467,200 note that was issued on July 1, 2012. The Note was due in full on March 31, 2015. Based on the terms of the Note, on May 6, 2014 the Company repaid the note in full upon the receipt of the $21,528,150 in funding mentioned above. As part of this settlement, the Company also agreed to issue to the holder of the Note 53,457 shares of the Company’s Common Stock sold in the Offering. The holder will be entitled to the same registration and other rights with respect to such securities as are granted to the purchasers of securities in the Offering.

Settlement of Amounts Owed

After March 31, 2014, the Company has reached a number of settlements with vendors, former directors and employees whereby $875,000 of liabilities were settled for $225,000 in cash and the issuance of 160,000 shares of common stock valued at $870,000 at the market price on the date of the settlement for total consideration of $1,095,000, resulting in a loss on settling these liabilities of $220,000. The Company is currently in negotiations with other vendors, former directors and employees to reduce the amounts owed to them and use a combination of stock and cash to settle these reduced amounts, but there can be no assurance that the Company will be successful in doing so, or that such settlements will amount to a material reduction in the amounts owed to these vendors, former directors and employees, or that these negotiations will not result in further losses.