v2.4.0.6
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
 3 Months Ended
Mar. 31, 2013
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION [Abstract]  
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

NOTE 2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

 

The following condensed balance sheet as of December 31, 2012, which has been derived from audited financial statements, and unaudited interim condensed financial statements of the Company have been prepared in accordance with U.S. GAAP. These consolidated financial statements include two reportable segments, as disclosed in Note 16.

 

Following the consolidation principles promulgated by U.S. GAAP, the consolidated financial statements of the Company include the assets, liabilities, results of operations, and cash flows of the following subsidiaries: (1) Openfilm, LLC ("Openfilm"), a wholly owned subsidiary formed in Florida; (2) Netlab Systems, LLC ("Netlab"), a wholly owned subsidiary formed in Florida; (3) NetLab Systems IP, LLC, a wholly owned subsidiary formed in Florida; (4) LegalGuru LLC, a partially owned subsidiary formed in Florida (5) Yapik LLC, a partially owned subsidiary formed in Florida; (6) Splinex, LLC ("Splinex"), a partially owned subsidiary formed in Florida; (7) IT Solutions LTD, a wholly owned subsidiary formed in the Cayman Islands; (8) Music1, LLC ("Music1"), a wholly owned subsidiary formed in Florida; (9) Motorsport, LLC ("Motorsport"), a wholly owned subsidiary formed in Florida; and (10) OOO Net Element Russia ("Net Element Russia"), a wholly owned subsidiary formed in Russia.

 

The subsidiaries listed above are the parent companies of several other subsidiaries, which hold the Company's underlying investments or operating entities.

 

  · Openfilm is the parent company of Openfilm, Inc., Openfilm Studios, LLC and Zivos, LLC (Ukraine)
  · Netlab is the parent company of Tech Solutions LTD
  · Splinex is the parent company of IT Solutions LTD
  · Music1 is the parent company of A&R Music Live, LLC ("A&R Music Live")(Operations discontinued January 31, 2013)
  · Motorsport is the parent company of Motorsport.com, Inc.
  · Net Element Russia is the parent company of OOO TOT Money ("TOT Money"), OOO TOT Group, OOO Music1, and Ya-Talant.

 

The amounts of shares and consideration for shares (including purchase prices, exercise prices and conversion prices) described in the Notes to Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2012, which is the period prior to October 2, 2012 (which was the closing date of the Company's merger with Net Element), have been adjusted to give effect to the conversion ratio for shares of Net Element common stock that were cancelled and converted into shares of the Company's common stock pursuant to the Merger Agreement. Pursuant to the terms of the Merger Agreement, upon completion of the Merger, each share of then-issued and outstanding common stock of Net Element was automatically cancelled and converted into the right to receive one-fortieth (1/40) of a share of the Company's common stock. See Note 4 for additional information regarding the Merger.

 

All material intercompany accounts and transactions have been eliminated in this consolidation.