UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10/A
(amendment no. 4 )
GENERAL
FORM FOR REGISTRATION OF SECURITIES
Pursuant
to Section 12(b) or (g) of the Securities Exchange Act Of 1934
Conforce
International, Inc.
(Name
of Registrant as specified in its charter)
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Delaware
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68-6077093
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or jurisdiction)
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Identification
Number)
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51A
Caldari Road
2
nd
Floor
Concord,
Ontario L4K 4G3
Canada
(Address
of principal executive offices)
Registrant’s
telephone number, including area code:
(416)
234-0266
Securities
to be registered under Section 12(b) of the Act:
None
Securities
to be registered under Section 12(g) of the Act:
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Title
of each class
to
be so registered
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Name
of each exchange on which
each
class is to be registered
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Common
stock, par value $0.0001
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Over-the-Counter/Pink
Sheets
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Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
accelerated filer,” and “smaller reporting company” in Rule 12-2 of the Exchange
Act.
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Large
accelerated filer
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o
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Accelerated
filer
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o
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Non-accelerated
filer
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o
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Smaller
reporting company
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x
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TABLE OF
CONTENTS
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17
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18
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18
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18
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20
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20
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21
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23
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EXPLANATORY
NOTE
Conforce
International, Inc. is filing this General Form for the Registration of
Securities on Form 10 to register its common stock, par value $0.0001, pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
On April
9, 2009, Conforce International, Inc.’s registration statement was automatically
declared effective and Conforce International, Inc. is now subject to the
requirements of Regulation 13A under the Exchange Act, which will require the
Company to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and
current reports on Form 8-K, and it will be required to comply with all other
obligations of the Exchange Act applicable to issuers filing registration
statements pursuant to Section 12(g).
Unless
otherwise noted, references in this registration statement to “Conforce
International, Inc.,” “Conforce,” “CFRI,” the “Company,” “we,” “our” or “us”
means Conforce International, Inc. Our principal place of business is
located at 51A Caldari Road, 2
nd
Floor, Concord,
Ontario L4K 4G3 Canada. Our telephone number is (416)
234-0266.
ITEM
1. BU
SINE
SS.
BUSINESS
DEVELOPMENT
Conforce
International, Inc. is a Delaware corporation headquartered in Concord, Ontario,
Canada. Management of Conforce has been in the shipping container business
repairing, selling or storing containers for over 25 years. The
Company operates a Container Terminal through Conforce 1 Container Terminals,
Inc. (“Conforce 1”). Conforce 1 provides complete handling and storage of marine
shipping containers to its client base of International shipping
lines. The container depot has a capacity of over 5,000
containers. Its fully integrated software system allows shipping line
customers on-line access 24/7 to create bookings, view container inventory and
status, and to print standard and customizable reports. Full service features
include empty and loaded container lift on-off services, short and long term
storage for empty and loaded containers, on-site container-reefer vendors
for container repair services, 460V plugs for continued container
temperature control while stationed at the terminal, on-site fuelling and steam
cleaning, and container modifications to client specifications. The Container
Terminal is the Company’s primary source of revenue. The Company generates
revenues as a result of charges assessed to shipping lines for the lifting and
handling of their empty containers while stored at the Container Terminal until
their next use. The Container Terminal also charges for related services such as
the abovementioned fueling and power stations for temperature controlled
containers.
In
addition to the business of the container terminal as described above, the
Company has been engaged in the research and development of a polymer based
composite shipping container flooring product, EKO-FLOR.
EKO-FLOR
xcs, the first version of the product, was officially introduced to the
container industry on December 5, 2006 at the 31st annual Intermodal Conference
in Hamburg, Germany, the world’s leading shipping container event. Based on
the initial reception to the composite, the Company learned that the industry
was interested in a composite alternative, however, the product needed to weigh
less than the current wood standard. Based on this feedback, Conforce continued
to refine its product and as a result, it was able to introduce a lighter, less
expensive version, EKO-FLOR cs-2, in December 2007 at the Intermodal Show in
Amsterdam, Netherlands. Based on industry feedback related to the surface
coating, the Company continued to develop the product until it was able to
officially launch EKO-FLOR cs-4 in December 2008. Conforce introduced its latest
light-weight version to customers during a series of meetings held in
Hamburg, Germany, the location of the 2008 Intermodal Conference. These
meetings in December 2008, which were held in a designated boardroom
at the Hamburg Renaissance, were scheduled with shipping lines and
lessors who ranked in the top ten, in terms of volume purchases of new
build containers in their respective business segments. Of the potential
customers in attendance, only one had previously conducted dry-land testing of
the EKO-FLOR product at a production facility in China. Such testing was
conducted using internal methods consistent with random tests conducted on new
build containers equipped with wood floors. The companies in attendance were
solicited based on their on-going interest in the product and their willingness
during 2007 and 2008 to provide feedback to Conforce so that the
Company could make improvements to the product in the areas of weight
and surface coatings. During and following the meetings, orders
were placed for ocean-going trials of EKO-FLOR cs-4. (The difference in the
product versions described above has been more fully explained in the Principal
Products section of this document).
As a
result, EKO-FLOR cs-4 will be evaluated through ocean-going tests conducted
by shipping lines and container lessors. The Company expects that
approximately six hundred (600) EKO-FLOR cs-4 equipped containers will be in
circulation on or about August - October 2009 for final testing.
The Company originally expected to have its product in circulation for testing
between May and July 2009; however, final preparation as it relates to
production equipment, personnel and processes have caused the trial date to date
to be delayed as stated above. At this time, the Company does not expect any
further delays.
The
Company has also developed EKO-FLOR ms-1, a composite panel designed
specifically for use as shelving in United States Military special application
marine containers. Consistent with a Letter of Intent received by Conforce in
May 2008 from its military sub-contractor, Sea Box Inc., the first order from
Sea Box for ms-1was received in December of 2008. The order consisted of racking
for special application containers and will generate revenues in excess of 1
million USD over 12 months until January 2010. Shipments of ms-1 commenced in
January 2009.
In
order to help ensure the successful commercialization of EKO-FLOR, particularly,
cs-4, on February 17, 2009, the Company signed a definitive agreement with Bayer
MaterialScience LLC (“Bayer”) establishing a strategic partnership between
Conforce and Bayer. Bayer is one of the world’s leading polymer companies and is
a division of Bayer AG, a recognized leader in health care, nutrition and
advanced materials. For Conforce, the agreement provides key support in the
areas of advanced material and design analysis, efficient production practices,
technical expertise and know-how, and a global material supply chain consistent
with the projected requirements of EKO-FLOR. The goal of the
Partnership is the successful commercialization of EKO-FLOR through the use of
advanced design and material analysis, efficient production practices through
on-going training and support, and the logistical development of a material
supply chain. Conforce will produce or have produced on its behalf
EKO-FLOR profiles using Bayer Products. (polyurethanes, polyurethane coatings
and polyurethane pultrusions). Bayer will receive samples of EKO-FLOR
produced by or on behalf of Conforce using Bayer Products for testing,
evaluation, determining and making any modifications to Bayer Products which
Bayer believes may improve the physical properties, appearance or processing of
EKO-FLOR. Conforce and Bayer will, at a later date to be mutually
agreed upon, enter into, execute and deliver definitive operational
agreements. The term of this Agreement will be for a period of one
(1) year from the date first written above. This Agreement may be extended or
terminated by mutual agreement of the
parties.
It is
important to note all revenues reported by Conforce to-date have been generated
by the container terminal operations, which was formed in November 2003 with
first revenues being recorded in April 2004. Research and development of
EKO-FLOR has been primarily funded by cash provided by the terminal operations.
The results from operations of the terminal are as follows:
For
the 12 month period April 1, 2006 to March 31, 2007, the Company had revenues of
$1,567,187 with an income of $54,053.
For
the 12 month period April 1, 2007 to March 31, 2008, the Company had revenues of
$2,364,945 with an income of $308,548.
For
the 9 month period April 1, 2008 to December 31, 2008, the Company had revenues
of $ 1,575,118 with an income of $63,939.
CORPORATE DEVELOPMENT
Toronto
Reefer Container Services (“TRC”) was formed in 1975 by Mr. Tony Kulas, father
of Marino Kulas. It was a Kulas private family business specializing
in the service and repair of oceangoing containers. The business was
subsequently purchased in 1998 by Mr. Slavko Kulas, the cousin of Mr. Marino
Kulas. Mr. Marino Kulas has been previously employed by
TRC. Since the formation of Conforce, TRC has remained an independent
entity, an outside vendor, with no financial relationship with
Conforce. TRC is in the business of providing repair services for
shipping lines through the use of mobile repair units that are called upon by
various terminals to perform on-site container repairs. TRC is hired
by the shipping lines and is paid directly by same. Terminal
operators, including Conforce, allow TRC to work on their premises as a service
to their shipping line customers. As such, Conforce is not paid by
TRC and TRC is not paid by Conforce, nor is there any formal written agreement
between the parties. It is important to note that shipping lines may use any
outside repair vendor they choose and that all such vendors are allowed access
to the Conforce terminal to perform repairs without paying a fee to Conforce.
This practice is typical in the industry and rarely is a repair vendor required
to pay a fee to a terminal operator.
On February 9, 2001, First National Preferred Card Service Inc.
(FNPCS) was registered as an Ontario corporation and was originally established
to facilitate payment systems for cruise ships operated by certain shipping
lines and in particular, Carnival Cruise
Lines.
In
November of 2003, Conforce 1 Container Terminals Inc. was registered as an
Ontario corporation and was formed for the purposes of establishing a container
storage and handling terminal. First revenues for the terminal were recorded in
April 2004.
On May
18, 2004 “Now Marketing Corp.” was duly formed through the filing of its
Certificate of Incorporation with the Delaware Secretary of State by Chairman
and Director, Marino Kulas. As was the case with FNPCS, Now Marketing Corp
was also originally established for the venture involving payment systems
for cruise ships.
On May
18, 2005, Now Marketing Corp. was renamed to Conforce International, Inc. At the
time of the renaming, Now Marketing Corp. had no business
operations.
On May
20, 2005, First National Preferred Card Service Inc. was renamed to Conforce
Container Corporation. At the time of the renaming, FNPCS had no business
operations.
On May
24, 2005, Conforce International, Inc. and Conforce Container Corporation
(“CCC”), an Ontario corporation, completed an Acquisition Agreement and Plan of
Merger. The purpose of the merger was for international tax planning and
expansion. At that time, the Company acquired 50.1% of Conforce 1 Container
Terminals Inc., which was wholly owned by Marino Kulas.
As of May
24, 2005 and upon execution of the Acquisition Agreement and Plan of Merger in
connection with Conforce 1 and CCC, Marino Kulas, President and Chief Executive
Officer was the founder and sole owner of Now Marketing Corp. and was the
founder and majority shareholder of CCC, which is the company responsible for
the development of EKO-FLOR. Mr. Kulas was also the founder and sole owner of
Conforce 1 Container Terminals, Inc., which is the company responsible for the
Company’s container terminal operations.
As of the
date of this filing, the common stock of Conforce is listed on the Pink Sheets
Electronic OTC Market under the trading symbol “CFRI.”
PRINCIPAL
PRODUCTS
Conforce
is comprised of two separate and distinct operating divisions:
1. Conforce
1 Container Terminals, Inc. (“Conforce 1”) is a full-service container terminal
providing storage and handling for ocean-going containers.
Conforce
1 provides complete handling and storage of Marine shipping containers to its
client base of International shipping lines. The container depot has
a capacity of over 5,000 containers. Its fully integrated software
system allows customers on-line access 24/7 to create bookings, view container
inventory and status and to print a number of standard and customizable
reports.
The full service features offered include, empty and loaded
container lift on-off services, container repairs through TRC, short and long
term storage for empty and loaded containers, EDI capability, on-site
container-reefer vendors for container repair services, 460V plugs
for continued container temperature control while stationed at the terminal,
on-site fueling and steam cleaning services and container modifications to
client specifications.
2. Conforce
Container Corporation is dedicated to the production, development and
commercialization of the new ISO1496 certified container flooring system,
EKO-FLOR.
EKO-FLOR
is a composite flooring system designed to replace plywood flooring in
shipping containers.
EKO-FLOR
xcs was the first version of the product developed. It was similar in weight to
apitong plywood at 304 kgs per 20 foot container.
EKO-FLOR
cs-2 was designed for use in general cargo applications. The product weighed
270kg per 20 ft. container.
EKO-FLOR
cs-4 was designed throughout 2008 as a result of evaluations and suggestions by
container industry participants. The product contains a new anti-slip top coat
surface jointly developed by Conforce and
Bayer
MaterialScience AG
. The product meets specified requirements in terms of
the weight and forces exerted on the product before failure occurs (“load
bearing” or “load bearing properties”). The product was tested by the American
Bureau of Shipping using standardized testing procedures for shipping
containers. The primary test involved exerting pressure on the floor by rolling
a test cart with a weight of 7,260kgs on two 7” wide solid rubber tires. The
second major test involved lifting the container 6 - 12” off the ground while
carrying 60,960kgs of cargo (two times its maximum capacity of 30,480kgs per
twenty foot container). EKO-FLOR cs-4 will replace xcs and cs-2 and
is the version of the product that will be tested by customers in
ocean-going trials.
The
EKO-FLOR cs-4 panels are currently being produced at Conforce’s own development
center in Concord, Ontario.
EKO-FLOR
ms-1 has been developed as a load bearing shelving system for use in special
application United States military containers.
The
Company is currently having the ms-1 panels produced at a sub-contracted
facility in Quebec, Canada.
Please
refer to the Growth Strategies section on page 8 for discussion of anticipated
revenues.
PRINCIPAL
COMPETITIVE STRENGTHS
Container
Terminal Division
Although
the terminal offers full service features as described in Item 1 above, such
features are offered by most terminals and are not considered a unique
competitive strength. The Company was able to enter the terminal business based
on its existing relationships with shipping lines through management’s business
dealings while formerly employed by TRC. Therefore, its main competitive
strength remains relationship driven as well as its focus on customer
service.
EKO-FLOR
Division
An
oil spill caused by a forklift during loading prior to ocean-going travel will
in all likelihood be absorbed in wood flooring during the 20 – 25 days the
container sits idly on the vessel. Based on internal testing conducted by
Conforce whereby oil was poured onto an apitong wood panel and an EKO-FLOR
polymer panel, after 4 days of being untouched, the spill was removed using a
cotton towel. The EKO-FLOR polymer panel did not absorb the oil,
whereas the oil had penetrated the apitong wood panel. The resulting
oil stain will render the wood container not suitable for food-grade transport.
This minimizes the container’s versatility and causes additional handling and
inspection charges for shipping lines due to the necessity of checking for
various spills that may have occurred during transportation resulting in
absorption and requiring cleaning or rendering the container no longer usable.
Conversely, the shipping lines may choose to repair the floor by either sanding
or replacing the damaged wood floor section.
EKO-FLOR
weighs 249kg per 20 foot container while the plywood currently found in the
majority of containers weighs 304kg per 20 foot container.
PRINCIPAL
CHALLENGES
Container
Terminal Division
The
principal challenges related to the terminal business are customer retention in
a competitive environment and decreasing container traffic as a result of the
global economic downturn which has adversely affected storage and transportation
services required by international shipping lines. The Company is currently
estimating that revenues in the terminal operations division will decrease by
approximately 30% in 2009.
EKO-FLOR
Division
One of
the principal challenges faced by EKO-FLOR is that the buyers must pay an
upfront premium. This hurdle was significant when the product was first
introduced to the industry in 2006; however, the product price has since
decreased while awareness of the competitive strengths of the product has
increased. The premium, which the Company believes will be offset
within 36 months, represents an increase of approximately 15% to the total price
of a 20 foot equivalent container. As a result, product for ocean-going trials
has been ordered.
Another
challenge the Company will face will be the establishment of a manufacturing
facility in China. To do so, the Company will need to rely on strategic
partnerships with entities having expertise as it relates to business and
production practices in China. Currently, the Company uses a Canadian
sub-contracted facility for production of its military shelving panel. For the
production of cs-4 trial product, the Company will use its own Development
Centre in Concord Ontario, where two production lines have been
installed.
Based
on the current economic downturn, the Company may also face potential delays in
terms of first orders, should the outcome of the trials be
positive. Customers currently using wood products may be less
inclined or motivated to switch to composite flooring, EKO-FLOR, due to the
abovementioned premium and the overall fear of change in an economy where funds
are tight. The production of new build containers was approximately
2.75 million twenty foot equivalent units in 2008, new builds for 2009 are
expected to be significantly lower at 1 million units
1
and
projections for 2010 are uncertain at this time. Although, the
current state of the economy poses somewhat of a challenge for the introduction
of EKO-FLOR, Conforce is confident that given EKO-FLOR’s characteristics and
benefits, shipping lines will continue to demonstrate interest and participate
in trials. Given the current emphasis on climate change and the
environment in general, the time is now for the introduction of new
environmentally friendly flooring products such as
EKO-FLOR. Management’s strategy has always been and will continue to
be the introduction of EKO-FLOR products effectively and efficiently by
monitoring industry trends on a proactive basis. This capability
enables Conforce to maximize profits and control
losses.
It is
also important to note that although damage to EKO-FLOR panels is unlikely,
certain repairs may be required, as would be the case with wood floors, if the
following events were to occur: the container experiences major cargo shifting
causing extreme localized contact with the floor; mishandling of the container
by crane operators may cause the frame to bend potentially resulting in lifted
or cracked panels; and if the container is placed on the ground and lands on a
protruding object this may cause either cracked or loosened panels.
1
Containerisation
International Magazine, March 2009, Available for subscribers
only.
GROWTH
STRATEGIES
While
Conforce has a well established core business with regard to its container
storage terminal, it does not contemplate much, if any, growth in terminal
revenues. However, the Company’s EKO-FLOR container flooring system,
which is in the development stage, continues to exhibit significant growth
potential, e.g. ocean-going trials planned by international shipping
lines. The Company’s success depends to a significant extent on the
performance of a number of senior management personnel and other key employees,
including production and research and development personnel. The
success of Conforce continues to depend to a significant extent on its ability
to identify, attract, hire, train and retain qualified professional, technical,
production and managerial personnel.
In May
of 2008 Conforce received a Letter of Intent (LOI) from a U.S. based Military
contractor, Sea Box, Inc., for the purchase of the Company’s newly
developed composite product, EKO-FLOR ms-1, designed exclusively for use as load
bearing shelving in special application United States Military shipping
containers. The LOI contemplates a renewable multi-year contract
whereby Conforce will provide product for a minimum of 10,000 special
application containers. In December 2008, the company received its first order
(firm commitment) in connection with the LOI for EKO-FLOR ms-1 from its US
military contractor, Sea Box, Inc. to provide the product for over 5,000
special application military containers, generating revenues in excess of 1
million USD. The Company is currently having the ms-1 panels produced at a
sub-contracted facility in Quebec, Canada.
The
Company has received firm trial orders for approximately 600 twenty foot
equivalent units, with a value of approximately 350,000 USD, for its EKO-FLOR
cs-4 composite container flooring system from various shipping lines and leasing
companies. Receipt of such 350,000 USD is merely for the conducting of the
ocean-going trial (use of EKO-FLOR in the trial) by a shipping line or leasing
company. Depending upon the results of such trial, should such
shipping line and/or leasing company decide to place a firm commitment/purchase
order with Conforce, further revenues will be generated by Conforce as agreed to
in such firm commitment/purchase order. The amount of such revenues
is unknown by Conforce until receipt of such firm commitment/purchase
order. The EKO-FLOR cs-4 panels are currently being produced at
Conforce’s own development center in Concord, Ontario. Currently,
shipping lines will purchase approximately 60 – 65% of their fleets annually
while the balance will be leased. Therefore, leasing companies represent on
average approximately 40% of the annual purchases of new build containers. The
trials will consist of placing EKO-FLOR equipped containers loaded with various
types of cargo, to be determined at the discretion of the shipping lines, and to
have such loaded containers placed on ocean-going vessels to be transported on
routes also to be determined at the sole discretion of the shipping lines. The
success of the trials is adjudged not only by the securing of purchase orders
but also by what is gained or learned from the feedback provided by the shipping
lines. The evaluation criteria applied by the shipping lines is subjective
and unknown by Conforce. Accordingly, test participants may elect to
not purchase EKO-FLOR for a variety of subjective reasons, which may or may not
be unrelated to the product’s performance. The trial orders are not
firm commitments to purchase on-going product and do not guarantee generating
revenue beyond the revenue generated by the trial orders
themselves.
It is
important to note that in the event the outcome of the trials are successful and
if the Company receives from its customers written orders for year one volume of
approximately 60,000 twenty foot equivalent units, then the Company intends to
establish an EKO-FLOR manufacturing facility in China. To do so, the Company
would require financing of 8 – 10 million USD. Currently, there is no such
financing in place, nor are there any preliminary or final term sheets or
agreements in place in support of such financing. If and when Conforce receives
such written orders, it is at that time that various financing avenues will be
considered such as private placements or public
offerings.
Conforce,
along with any company doing business internationally, will be subject to
currency fluctuations and fluctuations in the applicable exchange
rate. Fluctuations in the exchange rate between the Chinese RMB and
the Canadian dollar could adversely affect the Company’s operation results as
well as the value of some Conforcee assets and liabilities.
Moreover,
some of the Company’s material agreements may be governed by foreign law, e.g.
Chinese laws. Accordingly, should Conforce ultimately establish a
facility in China, the Company will engage competent Chinese legal counsel to
represent the Company and advise them with regards to Chinese licensing
registration or other regulatory requirements and policies prior to styling and
producing any material agreements.
The
production, in part, of EKO-FLOR products at third-party contracted facilities
immediately brings in to question the following: (i) quality control; (ii)
timely delivery of finished products; and (iii) quality and pricing of raw
materials, etc. Conforce management will conduct thorough and
complete due diligence investigations of any such third-party
contractor. Additionally, material contracts will be comprehensive,
strictly construed, and rigidly enforced.
The
Company intends to enter the North American highway trailer market with a
similar flooring product. The North American trailer product, EKO-FLOR xts, is
in the development stage and the Company expects to be able to produce a die
specific for the trailer product by August 2009 and expects to begin xts trailer
road trials in North America by October 2009. Prior to funding the cost of full
development and dies, the Company expects to modify cs-4 container panels for
road tests to be conducted on or about July 2009. By using its company owned
production facility in Canada the initial estimated cost of entry into the North
American highway trailer market is approximately $300,000. The Company intends
to use net proceeds from the sale of EKO-FLOR ms-1 for the development of the
product. Should the outcome of EKO-FLOR trials be successful, the Company’s
production and development centre in Concord, Ontario will be unable to satisfy
the potential demands of the trailer industry and therefore, the Company is
considering the establishment of a manufacturing facility in or around Indiana,
which is considered the central location for the manufacture of highway trailers
for the North American market. The total cost to establish such a facility is
currently estimated to be 4.75 – 5.50 million USD.
The
Company intends to develop flooring for the Cruise Line industry and has had
preliminary discussions with Carnival Cruise Lines. The Company expects to
produce a prototype panel for use as a replacement to teak wood currently used
on cruise ships. The Company does not expect to provide product if at
all, to Carnival until March of 2011. Total cost of entry into the decking
market for cruise lines is unknown at this time, however, the Company intends to
use net proceeds from the sale of EKO-FLOR cs-4 and ms-1 for the development of
the product.
The
Company plans to develop and commercialize a residential flooring application
that will further contribute to the development of the EKO-FLOR brand and will
enable the Company to capitalize on the significant “do-it-yourself” home and
cottage renovation market. The product will be designed for use on docks as
a replacement for wooden docks suffering deterioration due to continued exposure
to water, sunlight and general weather elements. EKO-FLOR decking would have
similar properties as those found in EKO-FLOR cs-4 and ms-1 but would not
require the same load bearing strength characteristics. The Company has not
developed a sales channel for this product as of yet, however, the Company’s V.P
of Product Development is also the technical chairperson for the National
Composites Council of Canada. The Company intends to rely on his expertise and
contact base as it relates to the development and commercialization of the
outdoor decking product. Prototypes of the product are scheduled for the second
quarter of 2010. Total cost of entry is estimated to be approximately 200,000.
Net proceeds from the sale of EKO-FLOR cs-4 and ms-1 will be applied to the
development of the product.
DISTRIBUTION
METHODS
The
Company intends to sell its products directly to International shipping lines
for use in newly manufactured containers through, either its internal sales
staff, broker/selling agents (of which it has 2 in Europe), and military
contractors (of which it has one in the USA, Sea Box). As of January 2009, the
Company began shipments of EKO-FLOR ms-1 to its aforementioned military
sub-contractor.
INDUSTRY
OVERVIEW
According
to Containerisation International Magazine, there were 3.9 million new
containers manufactured in 2007
1
.
Containers
are currently equipped with floors made from tropical hardwoods, the most common
being Apitong. The container industry is aggressively seeking a viable
alternative to hardwood
2
.
Regarding
the current state of the shipping container industry as a result of the recent
global economic downturn, it is important to note that new build volume in 2008
was projected to be 3.85 million 20 foot equivalent containers as of third
quarter 2008; however, due to a slowdown in the fourth quarter, actual 2008
annual production was approximately 2.75 million twenty foot equivalent
containers. Volume for the production of new containers is projected to be down
significantly in 2009 and is currently projected to be approximately 1 million
twenty foot equivalent containers
3
. It is
expected that shipping lines will be forced to reduce current container
inventory levels and draw from existing containers in their fleets until demand
begins to stabilize.
Shipping
rates are also expected to decrease, which could put additional pressure on
shipping lines as revenues and earnings decrease. According to Drewry Supply
Chain Advisors division director Philip Damas, “Demand is no longer sufficient
to absorb new vessel capacity. As a result of anemic growth and
over-capacity, container freight rates have fallen on several key routes, with
the notable exception of the transpacific, where carriers have withdrawn
substantial capacity. Shippers should expect container rates to decline by about
15 percent during the current down-cycle, although any reductions will also
depend on the level of fuel surcharges
4
.”
According
to a report published on December 8, 2008 by Deutsche Bank Research
5
, the
long-term prospects for container shipping are favourable. The report states
that “Despite the current economic slowdown, container shipping is expected to
continue to be a growth sector (+7 to 8% p.a. until 2015).” The report states
that while it expects significant problems for shipping companies in the
short-term as a result of over-capacities and declining freight and charter
rates, the medium and long-term prospects remain intact. The report concludes
although “the crisis is severe, there is no reason [for the industry] to
panic.”
1
Source:
Containerisation International Magazine, February 2008. Available to subscribers
only.
2
Source:
World Cargo News article entitled “Floors: the Container’s Achilles Heel,” –
January 2007 edition.
3
Source:
Containerisation International Magazine, March 2009. Available to subscribers
only.
4
Available to the public for a nominal fee; however, excerpts are
available online at no charge.
5
Available to the public at no
charge.
PRODUCT
DEVELOPMENT
The
Company has developed a composite container flooring product as an
alternative to the wood flooring currently used in the majority of containers in
circulation. The Company has received trial orders of the EKO-FLOR cs-4 totaling
approximately 600 - 20ft equivalent containers. The Company expects that
ocean-going trials will be completed during calendar third quarter
2009.
The
Company has developed EKO-FLOR ms-1, a composite shelving
system designed for use in special application military containers.
The Company recently received an order from its US military contractor to equip
over 5,000 special application US military containers with EKO-FLOR ms-1. The
first order will generate annual revenues for Conforce in excess of 1 million
USD.
COMPETITION
In terms
of competition for the Conforce 1 Terminal Division, the Company has identified
three similar container depots within a 50 km radius to the Conforce facility.
Each of these depots provide similar services as does Conforce, each competes
for the business of the international shipping lines. The first
competitor is ACS (Alrange Container Services) which has 2 smaller locations,
one in Toronto, Ontario and another in Mississauga, Ontario (both depots are
approximately 15 km. from the Conforce 1 depot) that when combined have a
slightly larger total capacity than Conforce. The second competitor
is Musket Transport whose main depot is located in Mississauga, Ontario,
approximately 2 km. from the Conforce 1 depot and their container capacity is
comparable to Conforce’s, but Musket Transport also has other locations, which
house trailers and reefers (the capacity of those locations is
unknown). The third competitor is P&W Transport whose depot is
located in Oakville, Ontario, approximately 5 km. from the Conforce 1 depot and
its capacity is slightly smaller than Conforce’s.
In terms
of competition for the EKO-FLOR Division, the Company is competing for a share
of the container flooring market that is currently dominated by the use of
tropical hardwood. The Company is unaware of any other hardwood, except tropical
hardwood, on the market that meets the strength requirements of ocean-going
containers and the customers we are targeting are international shipping lines
utilizing ocean-going containers. Therefore, it is the Company’s opinion
that tropical hardwood, as the current standard, remains the primary competitor
to Conforce. Accordingly, Conforce is competing for the same
customers who currently utilize wood products for their containers.
Singamas,
a container manufacturer, has developed a variation of a composite floor that
they are currently testing although the base composition is currently unknown to
Conforce.
BASF has
developed a prototype polymer/bamboo mix composite flooring product; however,
the Company is unaware of any industry trials currently in place or
scheduled.
Over the
last five years, the container industry has introduced into circulation Bamboo
flooring. The characteristics of Bamboo are similar in nature to those of
Apitong wood in that it is an absorbent material. With a weight of 340 kgs
per TEU for Bamboo and 249 kgs per TEU for EKO-FLOR, Bamboo is over 36% heavier
than EKO-FLOR. This has a significant impact on the amount of cargo transported
on ocean-going vessels and/or the bunker fuel required for the
same.
Havco
produces a composite coated wood product for the highway trailer industry. The
coating is approximately 1mm thick while the remainder of the panel,
approximately 27mm, is wood. This differs from EKO-FLOR panels for both
containers and highway trailers as the EKO-FLOR composite flooring system is
100% wood-free.
PATENTS,
TRADEMARKS, LICENSES, FRANCHISES, ROYALTY AGREEMENTS
Patents
As it
relates to EKO-FLOR composite panels for containers and highway trailers, the
Company’s trademark agent, Blakes Cassels & Graydon of Toronto, Ontario, has
filed a provisional patent with the United States Patent and Trademark Office.
The Company is currently preparing similar patent applications for
filing, in Canada, China, Germany and Denmark.
Trademarks
The
Company’s trademark agent has submitted EKO-FLOR trademark applications in
the USA, Canada, China and with the European member
states.
Licenses
and Royalties
In 2008,
the Company entered into a licensing agreement regarding the use of various
patented technologies pertaining to equipment and processes being relied upon in
connection with the manufacturing of EKO-FLOR. However, the Company has since
altered its equipment and production processes and as such, will no longer rely
on the technologies provided for in the aforementioned license
agreement.
EMPLOYEES
Conforce
employs 12 fulltime employees. Four employees are primarily dedicated
to the EKO-FLOR division, while eight employees work primarily within the
container terminal division.
REGULATORY
MANDATES
No
industry specific governmental approvals are needed for the operation of the
Company’s businesses.
REPORTS
TO SECURITY HOLDERS
The
Company will make available free of charge any of its filings as soon as
reasonably practicable after it has electronically filed these materials with,
or otherwise furnished them to, the Securities and Exchange Commission
(“SEC”). The Company is not including information contained on its
website as part of, or incorporating it by reference into, this Form
10.
On April
9, 2009, Conforce International, Inc.’s registration statement was automatically
declared effective and Conforce International, Inc. is now subject to the
requirements of Regulation 13A under the Exchange Act, which will require the
Company to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and
current reports on Form 8-K, and it will be required to comply with all other
obligations of the Exchange Act applicable to issuers filing registration
statements pursuant to Section 12(g).
Though
management may lack experience assessing internal control over financial
reporting, all effort has been made on behalf of Conforce to secure the
necessary individuals qualified to assist management with complying with the
applicable reporting requirements. Moreover, the cost of maintaining
such public reporting status was well analyzed and considered prior to the
filing the Form 10 registration statement.
The
public may read and copy any materials the Company files with the SEC at the
SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.
The public may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0030. The SEC maintains an Internet
site (http://www.sec.gov) that contains reports, proxies and information
statements and other information regarding issuers that file electronically with
the SEC.
ITEM
2.
FINANCIAL INFORMATION
.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Safe Harbor Act Disclaimer
for Forward-Looking Statements
Certain
statements in this document may contain words such as “anticipates,” “believes,”
“could,” “estimates,” "expects," "intends," “may,” “projects,” “plans,”
“targets” and other similar language and are considered forward-looking
statements. These statements are based on management’s current expectations,
estimates, forecasts and projections about the success of its container terminal
operations, its newly developed container and trailer flooring products, as well
as certain other composite based flooring products in various stages of
development. These forward-looking statements are subject to important
assumptions, risks and uncertainties which are difficult to predict and
therefore the actual results may be materially different from those
discussed.
Conforce
is subject to the SEC’s “penny stock” rules. Penny stocks generally
are equity securities with a price of less than $5.00. The penny
stock rules require broker-dealers to deliver a standardized risk disclosure
document prepared by the SEC which provides information about penny stocks and
the nature and level of risks in the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson, and monthly account statements showing the market value of each
penny stock held in the customer’s account. As long as the Company’s
common stock is subject to the penny stock rules, the holders of such common
stock may find it more difficult to sell their
securities.
OVERVIEW
The
Company operates in two reportable business segments; Container Terminal, and
EKO-FLOR. The Container Terminal operations are organized as Conforce 1
Container Terminals, Inc., which is a 50.1% owned subsidiary of the
Company. The remaining 49.9% is owned by Marino Kulas, Conforce International,
Inc President & CEO. The Conforce 1 subsidiary is responsible for all
container terminal operations. EKO-FLOR is organized as Conforce Container
Corporation, a 100% owned subsidiary of the Company. The CCC subsidiary is
responsible for the development, manufacturing and marketing of the Company’s
EKO-FLOR products. Operations for CCC during the reportable periods to
date have been limited to research and development as the product is in the
testing stages. Its EKO-FLOR products have evolved systematically with various
refinements, as previously noted, based on industry standards and various
feedback received. Accordingly, though in the development stage and
having generated no revenue to date, Conforce is informing shipping lines and
leasing companies of its product, EKO-FLOR, and optimism extends from the fact
that it is being tested in various ocean-going trials and receipt of the Sea
Box, Inc. purchase order.
Since the
formation of Conforce, Toronto Reefer Container Services (TRC) has remained
an independent service provider of container repairs for shipping
lines. TRC is in the business of providing repair services for
shipping lines through the use of mobile repair units that are called upon by
various terminals to perform on-site container repairs. TRC is hired by the
shipping lines and is paid directly by same. Terminal operators allow TRC to
work on their premises as a service to their shipping line customers. As
such, Conforce has no financial relationship with TRC. Conforce is not
compensated by TRC and TRC is not compensated by Conforce, nor is
there any formal written or verbal agreement between the parties. None of
the Conforce direct costs or revenues reported are a result of any business
transaction with TRC or the shipping lines as a result of services performed for
shipping lines by TRC.
An
advisory agreement between Worldwide Associates, Inc. and Conforce is in place
and as such, Worldwide Associates, Inc. has and continues to provide the Company
with advisory services as it relates to general business items such as sales,
marketing, financing, infrastructure enhancements and public company
management. Alexander P. Haig, Managing Director of Worldwide
Associates, Inc., has attended customer meetings with executives from Conforce,
including various meetings held in Hamburg, Germany in December
2008.
Regarding
the revenues generated by the terminal operations, the Company reports revenues
as a result of lifting and handling containers that are stored in the
Company's container depot. Storage charges typically do not apply as the Company
performs these services for only empty containers. In the event that
a container loaded with goods is stored at the terminal, then a nominal
daily storage rate is charged. These handling and lifting services are performed
by the Company and are not sub-contracted to any third
parties. Regarding the revenues generated by transportation services
in the operations of the Container Terminal division, the Company provides
sub-contracted transportation services for containers arriving or departing
to and from Canadian rail yards. Such sub-contracted services are arranged
by the Company at the request of its shipping line customers and are
facilitated through the use of local transportation companies. The Company
charges a surcharge for arranging such shipments and is paid directly by
the shipping lines. In turn, the Company pays the sub-contracted transportation
companies.
For the
12 month period April 1, 2006 to March 31, 2007, the Company's Container
Terminal business segment had revenues of $1,567,187 with an
operating income of $54,053. For the same period, the Company's EKO-FLOR
business segment had no revenues with expenses
of $252,143 for an operating loss of ($252,143). For the 12 month
period April 1, 2007 to March 31, 2008, the Company's Container Terminal
business segment had revenues of $2,364,945 with an operating income
of $308,548. For the same period, the Company's EKO-FLOR business
segment had no revenues with expenses of $209,437 for an operating
loss of ($209,437). For the 9 month period April 1, 2008 to December 31,
2008, the Company's Container Terminal business segment had revenues
of
$1,575,188
with an operating income of $63,939. For the same period, the
Company's EKO-FLOR business segment had no revenues with expenses of
$86,631 relating to the research and development of EKO-FLOR as well as the
purchase of fixed assets, for an operating loss of
($86,631).
PLAN
OF OPERATIONS
In
2009, the Company’s primary focus will be on the commercialization of EKO-FLOR.
With the introduction of EKO-FLOR revenues as a result of ms-1 panel orders, the
reliance on the container terminal will decrease. Accordingly, the Company
intends to pursue opportunities as they relate to three EKO-FLOR products (as
described below). While the container terminal is expected to continue to
provide revenues and moderate earnings, if any at all, growth in the terminal
operations is not expected. Expansion for Conforce is expected to come from
EKO-FLOR ms-1 in 2009 and cs-4 in 2010, where the Company believes that
notwithstanding the current economic slowdown, significant growth potential
exists due to the desperate need for composite flooring within the industry.
Should the container industry in 2010 collectively produce one half of its 2007
new build volume of 3.9 million twenty foot equivalent containers, the Company
would still experience significant growth assuming we are able to meet
expectations of orders totaling approximately 60,000 units or approximately 2%
of total new build volume.
EKO-FLOR cs-4:
Trial product will be shipped to customers in or around June
2009. Trial completion times may range from 60 – 120 days depending
on sea routes and frequency selected by trial customers, at their sole
discretion. Conforce estimates that most trial will be completed in
the third quarter of calendar 2009. The EKO-FLOR cs-4 panels are
currently being produced at Conforce’s own development center in Concord,
Ontario.
Once
the trials are complete and depending on the outcome of such trials, the Company
intends to secure EKO-FLOR cs-4 orders for 2010. Provided that volume
commitments are secured and that such commitments are in-line with Conforce
expectations of 60,000 - 80,000 TEU for fiscal 2010, then the Company will begin
the process of formalizing the details of a financial offering that will
adequately capitalize the establishment of a company owned facility in Asia. As
such, the Company would require financing of 8 – 10 million USD. Currently,
there is no such financing in place, nor are there any preliminary or final term
sheets or agreements in place in support of such financing. If and
when Conforce receives such written orders, it is at that time that various
financing avenues will be considered such as private placements or public
offerings. Depending on market and economic conditions at such time
as the capital is required, the Company will consider its options as they relate
to the structure of the offering in terms of debt versus equity and public
versus private. However, there are no guarantees that the Company will be able
to obtain such funding under reasonable terms, if at all.
EKO-FLOR
ms-1: In 2010, the Company also expects to receive equivalent orders
to those received in 2009 for EKO-FLOR ms-1, a variation of the cs-4 flooring
panel designed for use as load bearing shelving panels in special application
military containers. The Company is currently having the ms-1 panels
produced at a sub-contracted facility in Quebec, Canada.
EKO-FLOR
xts:
Beginning in the second quarter of calendar 2009, the
Company intends to introduce EKO-FLOR xts to the North American highway trailer
industry. The Company will offer a modified variation of its cs-4 container
panel in order to commence actual road testing by industry participants. The
Company expects to have the modified cs-4 panels placed into highway trailers
for road testing in or around July 2009.
The
Company intends to apply for listing on the OTC Bulletin Board at such time as
it's Forms 10 and 211 reach the no-comment stage by the appropriate regulatory
agencies, however, there is no guarantee that the Company’s application for
listing will be accepted.
RESULTS
OF OPERATIONS
YEAR
ENDED MARCH 31, 2008 COMPARED TO THE YEAR ENDED MARCH 31, 2007
The
Company had gross revenues of $2,364,945 with a net loss of ($54,854) for the
year ended March 31, 2008, compared to sales of $1,567,187 with a net loss of
($225,062) for the year ended March 31, 2007, an increase in sales from the
prior period of $797,758 or 50.9%. The increase in sales was due primarily to an
increase in revenues generated by existing customers though increased handling
charges at the terminal, as well as an increase in sub-contracted transportation
services for transport of containers to and from rail terminals to the Conforce
container depot. The Company’s EKO-FLOR product generated no revenues
during the period.
The
Company had cost of goods sold relating to direct production costs of $1,293,100
for the year ended March 31, 2008, compared to cost of goods sold relating to
direct production costs of $893,908 for the year ended March 31, 2007, which
represents an increase in the cost of goods sold from the prior period of
$399,192 or 44.7%. The increase in cost of goods sold was attributable primarily
to the increase in sales for the year ended March 31, 2008, compared to the
prior year. The increase was also attributed to an annual increase in
terminal rent in the amount of $42,167 as well as the inclusion of head office
and mobile terminal office rents to direct cost of goods sold, increasing same
by approximately $52,000 per annum.
Cost of
goods sold as a percentage of sales was 54.7% for the year ended March 31, 2008,
compared to 57.0% for the year ended March 31, 2007, which amounts to a
reduction in the cost of goods sold as a percent of sales of 2.3% from the prior
year. The reductions came primarily from savings in equipment rental
and subcontractor expenses.
The
Company had gross profit of $1,071,845 for the year ended March 31, 2008,
compared to gross profit of $673,279 for the year ended March 31, 2007, an
increase in gross profit of $398,566 or 59.1% over the prior period. The
increase was due primarily to the increase in volume.
The
Company had combined administrative ($725,891), research and development
($209,437) and depreciation ($30,121) expenses of $965,449 for the year ended
March 31, 2008, compared to combined administrative ($597,713), research and
development ($252,143) and depreciation ($20,955) expenses of $870,811 for the
year ended March 31, 2007, an increase in expenses of $93,638 or 11.00% from the
prior period. The increase in administrative expenses was due to
primarily to an increase salaries and wages as a result of the increase in
terminal traffic necessitating the need for additional employees and increased
hours of operation.
The
Company’s research and development costs include the creation of architectural
drawings as they relate to panel specifications, the creation of dies, the
manufacturing of test panels, the creation of specific panel testing equipment,
costs relating to independent certification testing, consulting costs associated
with utilizing process experts and engineers and costs associated with the setup
of the research and production center. The Company anticipates that research and
development costs will increase in fiscal 2009 as a result of final preparations
for the production of trial product, as well as costs associated with the
development of the highway trailer product.
The
Company had income from operations of $99,111 for the year ended March 31, 2008,
compared to a loss from operations of ($198,090) for the year ended March 31,
2007. The increase in profits was primarily due to the increase in
sales and a reduction in spending for the Flooring Systems’ Research and
development expenses by $42,706.
The
Company reported a net loss of ($54,854) for the year ending March 31, 2008
compared to a net loss of ($225,062) for the year ending March 31,
2007.
PERIOD ENDED DECEMBER
31, 2008 COMPARED TO THE PERIOD ENDED DECEMBER 31, 2007
The
Company had sales of $1,575,118 for the nine month period
ended December 31, 2008, compared to sales of $1,586,689 for the nine
month period ended December 31, 2007, a decrease in sales from the prior
period of $11,571 or 0.007%.
The
Company had cost of goods sold of $893,329 for the nine month period
ended December 31, 2008, compared to cost of goods sold of $952,436
for the nine month period ended December 31, 2007, which represents a
decrease in the cost of goods sold from the prior period of $59,107 or 6.2%.
Cost of
goods sold as a percentage of sales was 56.7% for the nine month period
ended December 31, 2008, compared to 60.0% for the nine month period
ended December 31, 2007, which amounts to a reduction in the cost of goods
sold as a percent of sales of 3.3% from the prior year.
The
Company had gross profit of $681,789 for the nine month period
ended December 31, 2008, compared to gross profit of $634,253 for
the nine month period ended December 31, 2007, an increase in gross
profit of $47,536 or 7.5% over the prior period. The increase in gross profit
was due to an increase in terminal operation revenues and a reduction in lower
margin transportation service revenues.
The
Company had combined administrative ($585,536), research and development
($86,631) and depreciation ($32,314) expenses of $704,481 for the nine month
period ended December 31, 2008, compared to combined administrative
($580,608), research and development ($124,304) and depreciation ($25,863)
expenses of $730,775 for the nine month period ended December 31, 2007, a
decrease in administrative expenses of $26,294 or 0.036% from the prior
period. This increase was primarily due to wage and salary
increases.
The
Company had a loss from operations of ($22,692) for the nine month
period ended December 31, 2008, compared to a loss from operations of
($96,522) for the nine month period ended December 31,
2007.
The
adjustment for Minority Interest in consolidated subsidiaries was $8,992 for the
nine month period ended December 31, 2008 compared to $10,949 for the period
ended December 31, 2007. This adjustment accurately portrays the
49.9% minority interest in Conforce 1 Container Terminals, Inc. Such
significant increase is a direct result of increased sales
volume.
The
net loss for the year was ($54,598) for the nine month period
ended December 31, 2008 compared to net loss of ($110,385) for
the nine month period ended December 31, 2007.
LIQUIDITY
AND CAPITAL RESOURCES
The
Company intends to raise, either through an Initial Public Offering of its
securities or a Private Placement, the capital required for the establishment
and operation of a multi-line EKO-FLOR manufacturing facility in Asia, which is
currently estimated to be between USD 8 – 10 million dollars. The
company will make the decision in terms of its production expansion into Asia at
such time as the trials of EKO-FLOR cs-4 are completed (currently projected to
be completed by August - October of 2009) and if it has received a firm
commitment(s) from shipping line(s) and/or leasing companies for the production
of EKO-FLOR cs-4.
The
Company does not currently have any outstanding lines or letters of
credit. Conforce does have a business development loan through a
government sponsored program in the amount of $250,000 payable over 10 years
(due January 2019). The loan was made through the small business
development loan program (SBL) and is limited in its use to the purchases of
equipment. Funds from the loan have been used to finance a portion of
the production equipment in the Company’s new development and production
facility in Concord, Ontario and such equipment has been used as collateral for
the loan. Under the rules governing SBL’s, in the event the Company
defaults on the loan, the Company is only responsible for repayment of an amount
equal to 25% of the total funds advanced.
The
Company does not have any agreements to fund the operations for the next 12
months, although it is attempting to secure funds, in the amount of
approximately $500,000, by way of non-interest bearing, non-callable (for
10 years) loans from certain minority founding shareholders. Such shareholders
will attempt to access funds for the aforementioned loans through private
transactions with accredited investors involving the sale of a portion of their
holdings of Conforce common stock. Proceeds from the sale will be loaned to
Conforce, in whole or in part, net of applicable taxes and fees if applicable,
at the sole discretion of such minority founding shareholders. Proceeds from
these transactions will be used to fund any and all costs associated with the
production of trial product. It is important to note that should the outcome of
trials be favorable, the Company will be required to raise significant capital
towards the establishment of an EKO-FLOR manufacturing facility in China. Such
capital is currently estimated to be 8 – 10 million USd.
LIABILITIES
The
Company had Accounts payable of $147,120 at December 31, 2008 compared to
March 31, 2008, an increase of $66,322. Such increase is attributable
to a decrease in the Company’s working capital primarily as the result of Fixed
Asset purchases and the continued funding of EKO-FLOR product
development.
The
Company had Accrued liabilities of $9,792 at December 31, 2008
compared to $24,949 at March 31, 2008, a decrease of $15,157. The
decrease is due primarily to a decrease in the tax
accrual.
The
Company had Accrued wages of $7,101 at December 31, 2008 compared to
$24,055 at March 31, 2008, a decrease of $16,954. The decrease is
primarily due to a decrease in the accrual for personal time.
The
Company had Shareholder’s loans from Marino Kulas, CEO and shareholder of
$450,114 at December 31, 2008 compared to $324,850 at March 31,
2008. The Shareholder loans are interest free with no fixed terms of
repayment. There was an increase of $125,264 at March 31, 2008, in
borrowing during the nine month period ending December 31,
2008. There were no payments made on this loan during the
period. The increase was needed to fund the working capital
requirements and the continued funding of the EKO-FLOR product
development.
OFF-BALANCE
SHEET ARRANGEMENTS
The
Company has not entered into any off-balance sheet arrangements that have or are
reasonably likely to have a current or future affect on its financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources and would be considered
material to investors.
ITEM 3.
PROP
ERTIES
.
The
Company’s headquarters are located at 51A Caldari Road, 2nd Floor, Concord,
Ontario L4K 4G3, Canada. The annual lease cost of these premises
is $51,017. The Company has a container terminal located at 584 Hazelhurst Road,
Mississauga, Ontario, Canada. The annual lease cost of these premises is
$195,300. The Company has a 13,400 sq.ft production and development centre
located at 111 Romina Drive in Concord, Ontario. The annual lease cost of these
premises is $159,600.
ITEM
4. SECURITY OWNERSHIP OF C
ERTA
IN BENEFICIAL OWNERS AND
MANAGEMENT.
The
following table lists stock ownership of the Company’s Common Stock. The
information includes beneficial ownership by (i) holders of more than 5% of
Common Stock, (ii) each of the four directors and executive officers and (iii)
all directors and executive officers as a group. Each person named in the table
has sole voting and investment power with respect to all shares of the Company’s
Common Stock beneficially owned by them.
|
Name
and Address of Owner
|
Title
of Class
|
Number
of
Shares
Owned
(1)
|
Percentage
of
Class
|
Brampton,
Ontario L6T 3Z8
|
|
|
|
North
York, Ontario M9L 1K5
|
|
|
|
10520
Yonge St., Suite 298
Richmond
Hill, Ontario L4C 3C7
|
|
|
|
Woodbridge,
Ontario L4H 1C2
|
|
|
|
Woodbridge,
Ontario L4L 7C7
|
|
|
|
Brampton,
Ontario L6V 1V6
|
|
|
|
(1)
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities.
(2) In
2006, a transaction was completed whereby five (5) million shares of common
stock were transferred from the holdings of Marino Kulas to Slavko Kulas,
Director of Terminal Operations. Mr. Marino Kulas transferred such shares
in order to do what he felt was in the best interest of the shareholders by
providing ownership benefits to all the original shareholders of the EKO-FLOR
product.
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
None.
CHANGES
IN CONTROL
None.
ITEM
5.
DIRECTORS AND
EXECUTIVE OFFICERS.
Set forth
below is information regarding the Company’s current directors and executive
officers. Marino Kulas and Slavko Kulas are first cousins. The directors are
elected annually by stockholders. The executive officers serve at the pleasure
of the Board of Directors.
|
Name
|
Age
|
Title
|
|
|
|
President
& CEO, Director
|
|
|
|
VP
of Product Development
|
|
|
|
Director
of Business Operations, Director
|
|
|
|
Director
of Terminal Operations
|
Marino Kulas
, President &
CEO of Conforce International, Inc., has been in the container industry for over
25 years. In 2001, Mr. Kulas commenced research and development of
EKO-FLOR as an alternative to the wood flooring currently used in shipping
containers. In 2003 he started the business of Conforce 1 Container
Terminals Inc. and in 2005, he started Conforce Container Corporation, the
company responsible for the development of EKO-FLOR. He oversees all aspects of
the day-to-day operations of the business, while maintaining his primary focus
on the Company’s growth and direction through new product development and the
commercialization of EKO-FLOR through account acquisition.
Joseph DeRose
,
Vice President of Product Development, is a chemical
engineer and has dedicated his career to the testing, development and technical
support of plastic materials, composite materials and polymer
additives. Prior to his appointment with Conforce in 2006, Mr. DeRose
worked with industry leader Ciba Specialty Chemicals (f/n/a Ciba-Geigy) for over
19 years (1981 through 2000), where he held the position of Industry Manager of
the Polymer Additives Division. Following, through 2005, Mr. DeRose
also held material testing and analysis positions with the Ontario Research
Foundation and Cambridge Materials Testing. Most recently, Mr. DeRose
provided consultation and project coordination for manufacturers of plastic and
composite materials seeking building code recognition in both Canada and the
United States. Mr. DeRose is a member of The Society of Plastics
Engineers and serves on the Board of Directors of the Ontario
Section. He is also a member of the Canadian Plastics Industry
Association and serves as Technical Chair for the Canadian Natural Composites
Council. For Conforce, Mr. DeRose is responsible for the research,
development, testing and analysis of all new Conforce composite products
currently in various stages of development.
Kathryn Saliani
,
Director of Business Operations. Prior to
joining Conforce, Ms. Saliani worked as an underwriter with a leading Mortgage
origination firm in Canada for 3 years (2003 through 2006). During
1988 through 2003, Kathryn performed as a sole proprietor, providing
administrative and bookkeeping functions for various small
companies. Prior to holding that position, Ms. Saliani worked for
Scotia Bank for 5 years (1982 through 1987) where she was responsible for
conducting branch audits in order to ensure compliance with loan policy and
procedure. Ms. Saliani also spent 12 years (1970 through 1982) with
the Workman Safety Insurance Board of Canada (WSIB) where she worked as Senior
Counselor to the office of the Chairman. Her responsibilities
included dispute resolution and to act as direct liaison between member
claimants and the WSIB. For Conforce, Ms. Saliani oversees Investor
Relations as well as all administrative functions of the Container Terminal
operations.
Slavko Kulas
, Director of
Terminal Operations. Mr. Slavko Kulas has been involved in the
container industry for over 19 years. In 1989, he joined Toronto
Reefer Container (TRC), a Kulas private family business specializing in the
service and repair of ocean-going containers. Mr. Kulas’
responsibilities initially included the repair of all container components until
he was promoted to Manager of the company’s mobile fleet of service trucks and
personnel. In 1998, Mr. Kulas purchased TRC. In 2003, he
joined Conforce 1 Container Terminals where he served as Terminal Manager until
2008 at which time he became Director of Terminal Operations. For
Conforce International, Inc., Mr. Kulas is responsible for the day-to-day
operations of the Container Terminal and is a key member of the EKO-FLOR product
development team.
AUDIT
COMMITTEE FINANCIAL EXPERT
The
Company does not have an audit committee or a compensation
committee.
ITEM
6. EXECUTIVE
COMP
ENSATION
December
31, 2008 and 2007 SUMMARY COMPENSATION TABLE
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
President
& CEO, Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
91,000
|
|
|
|
|
|
|
91,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VP
of Product Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
267,000
|
|
|
|
|
|
|
2008
|
45,500
|
|
|
|
|
|
|
45,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
of Business Op., Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
2008
|
50,000
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
52,000
|
|
|
|
|
|
|
52,000
|
|
|
|
|
|
|
|
|
|
|
NON-EMPLOYEE
DIRECTOR COMPENSATION
None.
ITEM 7. CERTAIN RELATIO
NSHI
PS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
.
Conforce
currently has outstanding shareholder loans that are interest free with no fixed
terms of repayment and it is possible that additional shareholder loans will be
received in the future.
ITEM
8. LEGAL PROCEEDINGS.
The
Company is not a party to any litigation and, to its knowledge, no action, suit
or proceeding has been threatened against the Company. There are no material
proceedings to which any director, officer or affiliate of the Company or
security holder is a party adverse to the Company or has a material interest
adverse to the Company.
ITEM
9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Conforce
is a publicly traded company on the Pink Sheets under the trading symbol
“CFRI.” The Company intends to apply for listing on the OTC Bulletin
Board at such time as it’s Forms 10 and 211 have been approved by the
appropriate regulatory agencies; however, there is no guarantee that the
Company’s application for listing will be accepted.
The
Company’s common stock has traded on the Pink Sheets of the National Quotation
Bureau under the symbol CFRI since September 15, 2005. The following table sets
forth the high and low sale prices for the Company’s common stock for the
periods indicated. The prices below reflect inter-dealer quotations, without
retail mark-up, mark-down or commissions and may not represent actual
transactions.
|
Quarter
ended
|
|
Low
price
|
|
|
High
price
|
|
|
March
31, 2009
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
December
31, 2008
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
September
30, 2008
|
|
$
|
0.12
|
|
|
$
|
0.19
|
|
|
June
30,
2008
|
|
$
|
0.16
|
|
|
$
|
0.28
|
|
|
March
31, 2008
|
|
$
|
0.16
|
|
|
$
|
0.24
|
|
|
December
31, 2007
|
|
$
|
0.215
|
|
|
$
|
0.24
|
|
|
September
28, 2007
|
|
$
|
0.20
|
|
|
$
|
0.23
|
|
|
June
29, 2007
|
|
$
|
0.305
|
|
|
$
|
0.35
|
|
|
March
30, 2007
|
|
$
|
0.37
|
|
|
$
|
0.42
|
|
HOLDERS
OF RECORD
The
Company has 34 registered shareholders of record.
DIVIDEND
POLICY
The
Company has never declared or paid any cash dividends on its common stock and it
does not anticipate paying any cash dividends in the foreseeable
future. The Company currently intends to retain future earnings, if
any, to finance operations and the expansion of its business. Any
future determination to pay cash dividends will be at the discretion of the
Board of Directors and will be based upon the Company’s financial condition,
operating results, capital requirements, plans for expansion, restrictions
imposed by any financing arrangements and any other factors that the Board of
Directors deems relevant.
ITEM
10. RECENT SALES
OF UNREGISTERED
SECURITIES.
None.
ITEM
11. DESCRIPTION OF REGISTRANT’S SECURITIES TO BE
REGISTERED.
The
Company is governed by Delaware Law and the Certificate of Incorporation and
Bylaws of the Company. Its authorized capital consists of 250,000,000
shares of common stock, $0.0001 par value, and 5,000,000 shares of preferred
stock. The Board of Directors, in their sole discretion, may
establish par value, divide the shares of preferred stock into series, and fix
and determine the dividend rate, designations, preferences, privileges and
ratify the powers, if any, and determine the restrictions and qualifications of
any series of preferred stock as established. No preferred shares are
currently designated.
GENERAL
- DESCRIPTION OF CAPITAL STOCK
COMMON
STOCK
120,001,000
shares of the Company’s common stock are issued and outstanding as of March 30,
2009.
PREFERRED
STOCK
The
Company may issue up to 5,000,000 shares of preferred stock, par value $0.0001
per share, from time to time in one or more series. No shares of
preferred stock are currently issued. The Company’s Board of
Directors, without further approval of its stockholders, is authorized to fix
the dividend rights and terms, conversion rights, voting rights, redemption
rights, liquidation preferences and other rights and restrictions relating to
any series. Issuances of shares of preferred stock, while providing
flexibility in connection with possible financings, acquisitions and other
corporate purposes, could, among other things, adversely affect the voting power
of the holders of Conforce common stock and prior series of preferred stock then
outstanding.
VOTING
RIGHTS
Each
outstanding share of common stock is entitled to one (1) vote, either in person
or by proxy, on all matters that may be voted upon by their holders at meetings
of the stockholders.
Holders
of Conforce common stock:
(1) have
equal ratable rights to dividends from funds legally available therefore, if
declared by the Board of Directors;
(2) are
entitled to share ratably in all our assets available for distribution to
holders of common stock upon our liquidation, dissolution or winding
up;
(3) do
not have pre-emptive, subscription or conversion rights or redemption or sinking
fund provisions; and
(4) are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote at all meetings of our stockholders.
The
holders of shares of Conforce common stock do not have cumulative voting rights,
which means that holders of more than fifty percent (50%) of outstanding shares
voting for the election of directors can elect all of the Company’s directors if
they so choose and, in such event, the holders of the remaining shares will not
be able to elect any of the Company’s directors.
WARRANTS
No
warrants are currently outstanding.
STOCK OPTION
PLAN
Currently,
the Company has not formalized an Employee Stock Option
Plan.
ITEM
12. INDEMNIFICATION
OF DIRECTORS
AND
OFFICERS.
Under
Section 145 of the General Corporation Law of the State of Delaware, The Company
can indemnify its directors and officers against liabilities they may incur in
such capacities, including liabilities under the Securities Act of 1933, as
amended (the “Securities Act”). The Company’s Certificate of
Incorporation provides that, pursuant to Delaware law, the Company’s directors
shall not be liable for monetary damages for breach of the director’s fiduciary
duty of care to Conforce and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director’s duty of loyalty to Conforce or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of the law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. This provision also
does not affect a director’s responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws.
The
Company’s Bylaws provide for the indemnification of its directors to the fullest
extent permitted by the Delaware General Corporation Law. Conforce
Bylaws further provide that its Board of Directors has discretion to indemnify
its officers and other employees. The Company is required to advance,
prior to the final disposition of any proceeding, promptly on request, all
expenses incurred by any director or executive officer in connection with that
proceeding on receipt of an undertaking by or on behalf of that director or
executive officer to repay those amounts if it should be determined ultimately
that he or she is not entitled to be indemnified under the Bylaws or
otherwise. The Company is not, however, required to advance any
expenses in connection with any proceeding if a determination is reasonably and
promptly made by its Board of Directors by a majority vote of a quorum of
disinterested Board Members that (i) the party seeking an advance acted in bad
faith or deliberately breached his or her duty to the Company or its
stockholders and (ii) as a result of such actions by the party seeking an
advance, it is more likely than not that it will ultimately be determined that
such party is not entitled to indemnification pursuant to the applicable section
of Conforce Bylaws.
The
Company has been advised that in the opinion of the Securities and Exchange
Commission, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to its directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, such indemnification
is against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event a claim for indemnification against such
liabilities (other than payment of expenses incurred or paid by a Conforce
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by Conforce is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
The
Company may enter into indemnification agreements with each of its directors and
officers that are, in some cases, broader than the specific indemnification
provisions permitted by Delaware law, and that may provide additional procedural
protection. Such indemnification agreements may require the Company,
among other things, to:
s
indemnify
officers and directors against certain liabilities that may arise because of
their status as officers or directors;
s
advance
expenses, as incurred, to officers and directors in connection with a legal
proceeding, subject to limited exceptions; or
s
obtain
directors’ and officers’ insurance.
At
present, there is no pending litigation or proceeding involving any Conforce
director(s), officer(s) or employee(s) in which indemnification is sought, nor
is the Company aware of any threatened litigation that may result in claims for
indemnification.
ITEM
13. FINANCIAL STATEMENTS AND S
UPPL
EMENTARY
DATA.
The
Conforce consolidated financial statements for the fiscal years ended March 31,
2007 and 2008 have been examined to the extent indicated in their report by
Pollard-Kelley Auditing Services, Inc. Pollard-Kelley Auditing
Services, Inc. did not prepare or participate in the preparation of our
unaudited interim financial statements. The financial statements have
been prepared in accordance with generally accepted accounting principles,
pursuant to Regulation S-X as promulgated by the SEC, and are included herein in
response to Item 13 of this Form 10.
ITEM
14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACOUNTING AND
FINANCIAL DISCLOSURE.
The
Company has not had any changes in, nor has it had any disagreements, whether or
not resolved, with its accountants on accounting and/ or financial disclosures
during its recent fiscal year or any later interim period.
ITEM
15.
FINANCIAL STATEMENTS
AND EXHIBITS.
Pollard-Kelley
Auditing Services, Inc
Auditing
Services
4500
Rockside Road, Suite 450, Independence, OH 44131
330-864-2265
Report of Independent
Registered Public Accounting Firm
Conforce
International, Inc. and Subsidiaries
Concord,
Ontario Canada
We have
audited the accompanying balance sheets of Conforce International, Inc. and
Subsidiary, as of March 31, 2008 and 2007, and the related statements of income,
stockholders’ equity, and cash flows for each of the two years in the period
ended March 31, 2008. These financial statements are the
responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We
conduct our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company at March 31, 2008 and
2007, and the results of its operations and it cash flows for each of the two
years in the period ended March 31, 2008, in conformity with U.S. generally
accepted accounting standards.
The
accompanying financial statements have been restated for the recording of stock
compensation issued under employment agreements discussed in Note 3 – Equity –
Stock Transactions to the audited financial statements.
Pollard-Kelley
Auditing Services, Inc.
/S/
Pollard-Kelley Auditing Services, Inc.
Independence,
Ohio
October
8, 2008, except for Note 3 - Equity - Stock Transactions, for which the date is
March 30, 2009
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
|
|
|
|
|
March
31, 2008 and 2007
|
|
|
|
|
|
|
|
RESTATED
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
34,801
|
|
|
$
|
74,832
|
|
|
Accounts
receivable
|
|
|
457,012
|
|
|
|
192,672
|
|
|
Other
receivables
|
|
|
37,172
|
|
|
|
36,321
|
|
|
Total
Current Assets
|
|
|
528,985
|
|
|
|
303,825
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Assets
|
|
|
|
|
|
|
|
|
|
Office
equipment
|
|
|
23,829
|
|
|
|
-
|
|
|
Vehicles
|
|
|
20,345
|
|
|
|
12,029
|
|
|
Equipment
|
|
|
101,888
|
|
|
|
101,888
|
|
|
Leasehold
improvements
|
|
|
25,028
|
|
|
|
17,201
|
|
|
|
|
|
171,090
|
|
|
|
131,118
|
|
|
Less:
Accumulated depreciation
|
|
|
(75,027
|
)
|
|
|
(44,906
|
)
|
|
|
|
|
96,063
|
|
|
|
86,212
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
14,779
|
|
|
|
14,779
|
|
|
|
|
|
14,779
|
|
|
|
14,779
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
639,827
|
|
|
$
|
404,816
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
66,322
|
|
|
$
|
41,494
|
|
|
Accrued
liabilities
|
|
|
24,949
|
|
|
|
21,131
|
|
|
Accrued
wages
|
|
|
24,055
|
|
|
|
16,876
|
|
|
Shareholder's
loans
|
|
|
324,850
|
|
|
|
287,375
|
|
|
Total
Current Liabilities
|
|
|
440,176
|
|
|
|
366,876
|
|
|
Minority
interest in consolidated subsidiaries
|
|
|
280,525
|
|
|
|
126,560
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
|
-
|
|
|
Common
stock
|
|
|
9,157
|
|
|
|
9,157
|
|
|
Additional
contributed capital
|
|
|
89,900
|
|
|
|
27,300
|
|
|
Retained
earnings
|
|
|
(179,931
|
)
|
|
|
(125,077
|
)
|
|
|
|
|
(80,874
|
)
|
|
|
(88,620
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
|
$
|
639,827
|
|
|
$
|
404,816
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
Statements
of Income
|
|
|
|
|
|
|
|
For
the Years Ending March 31, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,364,945
|
|
|
$
|
1,567,187
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECT
COST OF REVENUES
|
|
|
|
|
|
|
|
|
|
Equipment
rental
|
|
|
69,530
|
|
|
|
81,502
|
|
|
Fuel
|
|
|
76,166
|
|
|
|
69,218
|
|
|
Repairs
& maintenance
|
|
|
41,125
|
|
|
|
13,407
|
|
|
Transportation
|
|
|
847,916
|
|
|
|
511,977
|
|
|
Rent
|
|
|
228,049
|
|
|
|
133,207
|
|
|
Subcontractors
|
|
|
30,314
|
|
|
|
84,597
|
|
|
|
|
|
1,293,100
|
|
|
|
893,908
|
|
|
GROSS
PROFIT
|
|
|
1,071,845
|
|
|
|
673,279
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Administrative
(including stock compensation expenses)
|
|
|
725,891
|
|
|
|
597,713
|
|
|
Flooring
System expenses;
|
|
|
|
|
|
|
|
|
|
Research
& development
|
|
|
209,437
|
|
|
|
252,143
|
|
|
Depreciation
|
|
|
30,121
|
|
|
|
20,955
|
|
|
|
|
|
965,449
|
|
|
|
870,811
|
|
|
OTHER
INCOME AND EXPENSE
|
|
|
|
|
|
|
|
|
|
(Gain)/loss
on currency conversion
|
|
|
7,285
|
|
|
|
558
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
99,111
|
|
|
|
(198,090
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TAX
PROVISIONS
|
|
|
-
|
|
|
|
-
|
|
|
NET
INCOME/(LOSS) BEFORE MINORITY
|
|
|
|
|
|
|
|
|
|
INTEREST
|
|
|
99,111
|
|
|
|
(198,090
|
)
|
|
LESS
MINORITY INTEREST IN
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
SUBSIDIARIES
|
|
|
(153,965
|
)
|
|
|
(26,972
|
)
|
|
NET
INCOME
|
|
$
|
(54,854
|
)
|
|
$
|
(225,062
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE
|
|
|
|
|
|
|
|
|
|
Average
shares outstanding
|
|
|
120,001,000
|
|
|
|
120,001,000
|
|
|
Loss
per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
|
|
|
Statement
of Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
For
the Years Ending March 31, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
RESTATED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Strock
|
|
|
Contributed
|
|
|
Retained
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Total
|
|
|
Balances
April 1, 2006
|
|
|
-
|
|
|
$
|
-
|
|
|
|
120,001,000
|
|
|
$
|
9,157
|
|
|
$
|
-
|
|
|
$
|
99,985
|
|
|
|
109,142
|
|
|
Stock
contributed for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employment
agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,300
|
|
|
|
-
|
|
|
|
27,300
|
|
|
Net
loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(225,062
|
)
|
|
|
(225,062
|
)
|
|
Balances
at March 31, 2007
|
|
|
-
|
|
|
|
-
|
|
|
|
120,001,000
|
|
|
|
9,157
|
|
|
|
27,300
|
|
|
|
(125,077
|
)
|
|
|
(88,620
|
)
|
|
Stock
contributed for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employment
agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
62,600
|
|
|
|
-
|
|
|
|
62,600
|
|
|
Net
Income for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(54,854
|
)
|
|
|
(54,854
|
)
|
|
Balances
at March 31, 2008
|
|
|
-
|
|
|
$
|
-
|
|
|
|
120,001,000
|
|
|
$
|
9,157
|
|
|
$
|
89,900
|
|
|
$
|
(179,931
|
)
|
|
$
|
(80,874
|
)
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
Statements
of Cash Flows
|
|
|
|
|
|
|
|
For
the Years Ending March 31, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
Income/(loss) for the period
|
|
$
|
(54,854
|
)
|
|
$
|
(225,062
|
)
|
|
Adjustments
to reconcile net earnings to net
|
|
|
|
|
|
|
|
|
|
cash
provided (used) by operating activities:
|
|
|
|
|
|
|
|
|
|
Minority
interest in consolidated subsidiary
|
|
|
153,965
|
|
|
|
26,972
|
|
|
Depreciation
|
|
|
30,121
|
|
|
|
20,955
|
|
|
Compensation
paid by stock
|
|
|
62,600
|
|
|
|
27,300
|
|
|
Changes
in Current assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in Accounts receivable
|
|
|
(264,340
|
)
|
|
|
80,899
|
|
|
(Increase)
decrease in Other receivables
|
|
|
(851
|
)
|
|
|
4,752
|
|
|
(Decrease)
Increase in Accounts payable
|
|
|
24,828
|
|
|
|
(21,924
|
)
|
|
(Decrease)
Increase in Accrued liabilities
|
|
|
3,818
|
|
|
|
3,457
|
|
|
(Decrease)
Increase in Accrued wages
|
|
|
7,179
|
|
|
|
2,464
|
|
|
NET
CASH (USED) BY
|
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
(37,534
|
)
|
|
|
(80,187
|
)
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Purchase
of Fixed assets
|
|
|
(39,972
|
)
|
|
|
(17,574
|
)
|
|
Purchase
of Deposits
|
|
|
-
|
|
|
|
(4,813
|
)
|
|
NET
CASH (USED) BY
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
(39,972
|
)
|
|
|
(22,387
|
)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
NET
CASH PROVIDED BY
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
EFFECT
OF EXCHANGE RATE ON CASH
|
|
|
37,475
|
|
|
|
2,888
|
|
|
NET
INCREASE IN CASH
|
|
|
(40,031
|
)
|
|
|
(99,686
|
)
|
|
CASH
AT BEGINNING OF PERIOD
|
|
|
74,832
|
|
|
|
174,521
|
|
|
CASH
AT END OF PERIOD
|
|
$
|
34,801
|
|
|
$
|
74,835
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
RESTATED
These
financial statements have been restated to record the stock transactions issued
under an employment agreement. See
NOTE – 3
EQUITY
,
Stock
Transactions
for further information.
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
History
The
Company was incorporated on May 18, 2004 in the state of Delaware as Now
Marketing Corp.
On May
25, 2005, the Company acquired Conforce Container Corporation in exchange for
120,000,000 shares of the Company’s Common Stock, making Conforce Container
Corporation a wholly owned subsidiary. Immediately prior to the
acquisition, the Company had 1,000 shares of common stock issued and
outstanding. The acquisition was accounted for as a recapitalization
of Conforce Container Corporation, as the shareholders of Conforce Container
Corporation controlled the Company after the acquisition was
completed. Conforce Container Corporation was treated as the
acquiring entity for accounting purposes. There were no adjustments
to the carrying value of the assets or liabilities of acquired company or to the
assets and liabilities of the acquiring company. On May 20, 2005
Conforce Container Corporation was renamed from First National Preferred Card
Service, Inc. which was incorporated under the laws of Ontario on February 9,
2001. Conforce Container Corporation’s Balance Sheet on the
date of acquisition was as follows;
|
|
|
In
Canadian Dollars
|
|
|
Assets
|
|
$
|
-0-
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Shareholder
loans
|
|
$
|
18,560
|
|
|
Equity
|
|
|
(18,560
|
)
|
|
|
|
$
|
-0-
|
|
The
Company was renamed from Now Marketing Corp to Conforce International, Inc. at
this time.
On May
24, 2005, the Company acquired 50.1% of Conforce 1 Container Terminals, Inc.,
for $100. Conforce 1 Container Terminals, Inc. was incorporated under
the laws of Ontario on November 12, 2003. The combination was
accounted for as a reverse acquisition as the shareholders of Conforce 1
Container Terminals, Inc. controlled the Company after the acquisition was
completed. Conforce 1 Container Terminals, Inc. was
treated
as the acquiring entity for accounting purposes. There were no
adjustments to the carrying value of the assets or liabilities of acquired
company or to the assets and liabilities of the acquiring
company.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The
Company’s 50.1% subsidiary, Conforce 1 Container Terminals, Inc., provides
handling, storage and transport of overseas shipping containers for
international steamship lines, as well as domestic retailers. All
revenues for the two fiscal years reported here were generated by the operations
of Conforce 1 Container Terminals, Inc. Conforce Container
Corporation has embarked on the development of a new container flooring system,
EKO-FLOR
which
has been designed to provide an environmentally friendly product to increase
container versatility while reducing shipping costs.
Financial Statement
Presentation
The
accompanying statements have been prepared form the books and records of the
Company and its subsidiaries. All significant intercompany accounts
have been eliminated. The Company’s 50.1% subsidiary enjoys an
October 31, yearend for tax purposes. The books and records included
herein have been adjusted for the twelve month period ending March 31, 2008 and
2007 respectively.
Cash and Cash
Equivalents
For
purposes of the statement of cash flows, the Company considers all short-term
debt securities purchased with a maturity of three months or less to be cash
equivalents. There was no cash paid during the periods for interest
or taxes.
Property and
Equipment
Property
and equipment are carried at cost. Maintenance, repairs and renewals
are expensed as incurred. Depreciation of property and equipment is
provided for over their estimated useful lives, which range from three and five
years, using the declining balance method. Leasehold improvements are
amortized over the life of the lease. Depreciation expense was
$30,314 and $20,955 for the years ending March 31, 2008 and 2007
respectively.
Use of
Estimates
The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Revenue
Recognition
The
only revenue producing operations of the Company during both years is the
Container Terminal operation which recognizes revenues when services are
rendered. The operation bills at the end of each month for the
services rendered during the month.
NOTE 2 – INCOME
TAXES
The
Company accounts for income taxes under Generally Accepted Accounting Principles
used in the United States of America, which requires the Company to recognize
deferred tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company’s financial statements or tax
returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the financial statement carrying
amounts and tax basis of the assets and liabilities using enacted tax
rates. The Company has no significant differences between book and
tax accounting. The operating loss carry forward from the year
ending March 31, 2007 was use to reduce taxable income in the year ending March
31, 2008 to $0.
NOTE 3 –
EQUITY
Preferred
Stock
At March
31, 2008 and 2007, the Company had authorized 5,000,000 shares of Preferred
Stock at a par value of $.0001 per share. There were 0 shares
outstanding. The unissued shares of Preferred stock may be divided
into and issued in designated series from time to time by one or more
resolutions adopted by the Board of Directors.
Common
Stock
At March
31, 2008 and 2007, the Company had authorized 250,000,000 shares of Common Stock
at a par value of $.0001 per share. There were 120,001,000 shares
outstanding.
Stock
Transactions
On
October 26, 2006, the Company entered into an employment agreement with its
Vice-President, Product Development. The agreement is for a period of
twelve months, fixes compensation level and calls for an issue of Common stock
on the 30
th
of each
month
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 3 – EQUITY –
CONTINUED
during
the life of the agreement. In addition an additional 200,000 shares
are to be issued at the end of the agreement. Shares issues are
dependent upon continued employment. The shares were provided by the
majority shareholder of the Company. Shares issued during the year
ended March 31, 2008 totaled 200,000 and were valued at $62,600 and shares
issued during the year ended March 31, 2007 totaled 50,000 and were valued at
$27,300. Valuation was based on the trading value of the shares on
the date the shares were provided and issued which in all cases the on the same
day.
On
October 31, 2007, the Company entered into a renewal of the employment agreement
with it Vice-President, Product Development. The agreement was for a
period of twelve months, fixes compensation level and calls for an issue of
Common stock upon completion of the agreement if certain goals are met in
connection with the EKO-FLOR products. None of the performance
criteria were met as of March 31, 2008.
The
recording of these two employment agreements effected a restatement of the March
31, 2008, and 2007 financial statements. The effects of the
restatement are shown below;
|
|
|
Original
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Adjustment
|
|
|
As Revised
|
|
|
Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
Additional
contributed
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
$
|
0
|
|
|
$
|
89,900
|
|
|
$
|
89,900
|
|
|
Retained
earnings
|
|
$
|
(90,031
|
)
|
|
$
|
(89,900
|
)
|
|
$
|
(179,931
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
$
|
663,291
|
|
|
$
|
62,600
|
|
|
$
|
725,891
|
|
|
Income from
operations
|
|
$
|
161,711
|
|
|
$
|
(62,600
|
)
|
|
$
|
99,111
|
|
|
Net Income
|
|
$
|
7,746
|
|
|
$
|
(62,600
|
)
|
|
$
|
(54,854
|
)
|
|
Net Income per
share
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flow Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the period
|
|
$
|
7,746
|
|
|
$
|
(62,600
|
)
|
|
$
|
(54,854
|
)
|
|
Compensation paid
by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock
|
|
$
|
0
|
|
|
$
|
62,600
|
|
|
$
|
62,600
|
|
|
|
|
Original
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Adjustment
|
|
|
As
Revised
|
|
|
Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
Additional
contributed
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
$
|
0
|
|
|
$
|
27,300
|
|
|
$
|
27,300
|
|
|
Retained earnings
|
|
$
|
(97,777
|
)
|
|
$
|
(27,300
|
)
|
|
$
|
(125,077
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
$
|
540,413
|
|
|
$
|
27,300
|
|
|
$
|
597,713
|
|
|
Income from
operations
|
|
$
|
(170,790
|
)
|
|
$
|
(27,300
|
)
|
|
$
|
(198,090
|
)
|
|
Net Income
|
|
$
|
(197,732
|
)
|
|
$
|
(27,300
|
)
|
|
$
|
(225,062
|
)
|
|
Net Income per
share
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flow Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the period
|
|
$
|
197,762
|
|
|
$
|
(27,300
|
)
|
|
$
|
(225,062
|
)
|
|
Compensation paid
by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock
|
|
$
|
0
|
|
|
$
|
27,300
|
|
|
$
|
27,300
|
|
NOTE 4 – RELATED
PARTIES
At
March 31, 2008 and 2007 the Company owed $324,850 and $287,375 respectively to
Marino Kulas, the CEO, member of the Board of Directors and Shareholder under an
informal borrowing arrangement. These loans, made in Canadian
Dollars, are without interest or terms of repayment. There were no
repayments made under this arrangement during the years ending March 31, 2008
and 2007 respectively. Interest has been imputed on these notes at
1.5 percent.
The
Company also rents three pieces of equipment on a month to month basis from a
related party. Rent expense for these items was $13,625 and $0 for
the years ending March 31, 2008 and 2007. The rental rate paid by the
Company to the related party is felt by management to be a competitive
rate.
The
CEO is the 49.9 % minority shareholder of Conforce 1 Container Terminals,
Inc.
The
Company had no sales or purchases to or from TRC during the years ending March
31, 2008 and 2007.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 4 – RELATED PARTIES –
CONTINUED
During
2008 and 2007, the CEO of the Company contributed 200,000 and 50,000 shares, of
Common stock, respectively to satisfy the stock issue requirements of an
employment agreement.
NOTE 5 –
COMMITMENTS
The
Company leases office space under a five year lease which runs through April
2012. Monthly lease payments are $2,883.
The
Company leases site space under a five year lease which runs through November
2008. The lease is renewable for an additional five
years. The Company intends to renew the lease at an approximately a 7
to 8 percent increase. Monthly lease payments are
$11,127.
Future
lease commitments are as follows; the site lease was included through the end of
the original term. Future payments under the intended renewal period
have not been included since the renewal is not effective and the rental rate is
unknown at this time.
Future
commitments;
|
Fiscal 2009
|
|
$
|
124,503
|
|
|
Fiscal 2010
|
|
|
34,841
|
|
|
Fiscal 2011
|
|
|
34,841
|
|
|
Fiscal 2012
|
|
|
2,904
|
|
|
Fiscal 2013
|
|
|
-0-
|
|
|
Thereafter
|
|
|
-0-
|
|
NOTE 6 – MINORITY
INTEREST
Minority
interest on the consolidated balance sheets represents the portion of the
shareholders’ equity at the respective year ends not owned by the shareholders
of the Company.
|
|
|
Minority
|
|
|
|
|
Interest
|
|
|
March 31,
2006
|
|
$
|
99,588
|
|
|
Minority interest
in income of subsidiary
|
|
|
26,972
|
|
|
March 31,
2007
|
|
|
126,560
|
|
|
Minority interest
in income of subsidiary
|
|
|
153,965
|
|
|
March 31,
2008
|
|
$
|
280,525
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 7 – BUSINESS
SEGMENTS
The
Company operates in three reportable business segments; Container Terminal,
EKO-FLOR and Administrative. The Container Terminal operations are
organized as Conforce 1 Container Terminals, Inc. is a 50.1% owned subsidiary of
the Company. The subsidiary is responsible for all container terminal
operations. EKO-FLOR is organized as Conforce Container Corporation a
100% owned subsidiary of the Company. This subsidiary is responsible
for the development, manufacturing and marketing of the Company’s EKO-FLOR
product. Operations to date have been research and
development. The Administrative operations are the operations of the
parent company Conforce International, Inc. The operations to date
have been minimal since formation.
Business
Segments –For the Year Ended March 31, 2008
|
|
|
Container
|
|
|
|
|
|
|
|
|
|
|
Terminals
|
|
|
EKO-FLOR
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,364,945$ -0-
|
|
|
$
|
2,364,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
1,293,100
|
|
|
|
-0-
|
|
|
|
1,293,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
725,891
|
|
|
|
-0-
|
|
|
|
725,891
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
209,437
|
|
|
|
209,437
|
|
|
Depreciation
|
|
|
30,121
|
|
|
|
-0-
|
|
|
|
30,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss)
From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
$
|
308,548
|
|
|
$
|
(209,437
|
)
|
|
$
|
99,111
|
|
Total
Assets, March 31, 2008
|
Container
Terminals
|
|
$
|
1,101,407
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(461,580
|
)
|
|
Consolidated Total
Assets
|
|
$
|
639,827
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008 and 2007
NOTE 7 – BUSINESS SEGMENTS –
CONTINUED
Business
Segments –For the Year Ended March 31, 2007
|
|
|
Container
Terminals
|
|
|
|
|
|
|
|
|
|
|
|
|
EKO-FLOR
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,567,187
|
|
|
$
|
-0-
|
|
|
$
|
1,567,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
893,908
|
|
|
|
-0-
|
|
|
|
893,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
597,713
|
|
|
|
-0-
|
|
|
|
597,713
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
252,143
|
|
|
|
252,143
|
|
|
Depreciation
|
|
|
20,955
|
|
|
|
-0-
|
|
|
|
20,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
$
|
54,053
|
|
|
$
|
(252,143
|
)
|
|
$
|
(198,090
|
)
|
Total
Assets, March 31, 2007
|
Container
Terminals
|
|
$
|
656,959
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(252,143
|
)
|
|
Consolidated Total
Assets
|
|
$
|
404,816
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
|
|
|
|
|
December
31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
March
31,
|
|
|
|
|
2008
|
|
|
2008
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
34,801
|
|
|
Accounts
receivable
|
|
|
200,996
|
|
|
|
457,012
|
|
|
Other
receivables
|
|
|
32,569
|
|
|
|
37,172
|
|
|
Other
current assets from derivative computation
|
|
|
67,200
|
|
|
|
-
|
|
|
Total
Current Assets
|
|
|
300,765
|
|
|
|
528,985
|
|
|
Fixed
Assets
|
|
|
|
|
|
|
|
|
|
Office
equipment
|
|
|
23,829
|
|
|
|
23,829
|
|
|
Vehicles
|
|
|
20,345
|
|
|
|
20,345
|
|
|
Equipment
|
|
|
575,188
|
|
|
|
101,888
|
|
|
Leasehold
improvements
|
|
|
25,028
|
|
|
|
25,028
|
|
|
|
|
|
644,390
|
|
|
|
171,090
|
|
|
Less:
Accumulated depreciation
|
|
|
(107,341
|
)
|
|
|
(75,027
|
)
|
|
|
|
|
537,049
|
|
|
|
96,063
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
23,829
|
|
|
|
14,779
|
|
|
|
|
|
23,829
|
|
|
|
14,779
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
861,643
|
|
|
$
|
639,827
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Bank
overdraft
|
|
$
|
3,357
|
|
|
$
|
-
|
|
|
Accounts
payable
|
|
|
147,120
|
|
|
|
66,322
|
|
|
Accrued
liabilities
|
|
|
9,792
|
|
|
|
24,949
|
|
|
Accrued
wages
|
|
|
7,101
|
|
|
|
24,055
|
|
|
Accrued
taxes
|
|
|
-
|
|
|
|
-
|
|
|
Shareholder's
loans
|
|
|
450,114
|
|
|
|
324,850
|
|
|
Derivative
liability from employment agreement
|
|
|
67,200
|
|
|
|
-
|
|
|
Total
Current Liabilities
|
|
|
684,684
|
|
|
|
440,176
|
|
|
Minority
interest in consolidated subsidiaries
|
|
|
312,431
|
|
|
|
280,525
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
|
-
|
|
|
Common
stock
|
|
|
9,157
|
|
|
|
9,157
|
|
|
Additional
contributed capital
|
|
|
89,900
|
|
|
|
89,900
|
|
|
Retained
earnings
|
|
|
(234,529
|
)
|
|
|
(179,931
|
)
|
|
|
|
|
(135,472
|
)
|
|
|
(80,874
|
)
|
|
Total
Liabilities and Shareholders' Equity
|
|
$
|
861,643
|
|
|
$
|
639,827
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
|
|
|
Statements
of Income
|
|
|
|
|
|
|
|
|
|
|
For
the Nine Months Ending December 31, 2008 and December 31,
2007
|
|
|
|
|
|
and
for the 12 months ending March 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
March
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,575,118
|
|
|
$
|
1,586,689
|
|
|
$
|
2,364,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECT
COST OF REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
rental
|
|
|
81,447
|
|
|
|
82,375
|
|
|
|
69,530
|
|
|
Fuel
|
|
|
53,497
|
|
|
|
48,529
|
|
|
|
76,166
|
|
|
Repairs
& maintenance
|
|
|
46,117
|
|
|
|
34,464
|
|
|
|
41,125
|
|
|
Transportation
|
|
|
519,165
|
|
|
|
602,654
|
|
|
|
847,916
|
|
|
Rent
|
|
|
175,582
|
|
|
|
160,649
|
|
|
|
228,049
|
|
|
Subcontractors
|
|
|
17,521
|
|
|
|
23,765
|
|
|
|
30,314
|
|
|
|
|
|
893,329
|
|
|
|
952,436
|
|
|
|
1,293,100
|
|
|
GROSS
PROFIT
|
|
|
681,789
|
|
|
|
634,253
|
|
|
|
1,071,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
|
|
|
585,536
|
|
|
|
580,608
|
|
|
|
725,891
|
|
|
Flooring
System expenses;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
& development
|
|
|
86,631
|
|
|
|
124,304
|
|
|
|
209,437
|
|
|
Depreciation
|
|
|
32,314
|
|
|
|
25,863
|
|
|
|
30,121
|
|
|
|
|
|
704,481
|
|
|
|
730,775
|
|
|
|
965,449
|
|
|
OTHER
INCOME AND EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain)/loss
on currency conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
7,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
(22,692
|
)
|
|
|
(96,522
|
)
|
|
|
99,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TAX
PROVISIONS
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
NET
INCOME/(LOSS) BEFORE MINORITY
|
|
|
|
|
|
|
|
|
|
|
INTEREST
|
|
|
(22,692
|
)
|
|
|
(96,522
|
)
|
|
|
99,111
|
|
|
LESS
MINORITY INTEREST IN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
SUBSIDIARIES
|
|
|
(31,906
|
)
|
|
|
(13,863
|
)
|
|
|
(153,965
|
)
|
|
NET
INCOME (LOSS)
|
|
$
|
(54,598
|
)
|
|
$
|
(110,385
|
)
|
|
$
|
(54,854
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
shares outstanding
|
|
|
120,001,000
|
|
|
|
120,001,000
|
|
|
|
120,001,000
|
|
|
Loss
per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
Statements
of Cash Flows
|
|
|
|
|
|
|
|
For
the Nine Months Ending December 31, 2008 and December 31,
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
Income/(loss) for the period
|
|
$
|
(54,598
|
)
|
|
$
|
(110,385
|
)
|
|
Adjustments
to reconcile net earnings to net
|
|
|
|
|
|
|
|
|
|
cash
provided (used) by operating activities:
|
|
|
|
|
|
|
|
|
|
Minority
interest in consolidated subsidiary
|
|
|
31,906
|
|
|
|
13,863
|
|
|
Depreciation
|
|
|
32,314
|
|
|
|
25,863
|
|
|
Compensation
paid by stock issues
|
|
|
-
|
|
|
|
62,600
|
|
|
Changes
in Current assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in Accounts receivable
|
|
|
256,016
|
|
|
|
(93,656
|
)
|
|
(Increase)
decrease in Other receivables
|
|
|
4,603
|
|
|
|
(44,455
|
)
|
|
(Decrease)
increase in Bank overdrafts
|
|
|
3,357
|
|
|
|
157,244
|
|
|
(Decrease)
Increase in Accounts payable
|
|
|
80,798
|
|
|
|
(7,916
|
)
|
|
(Decrease)
Increase in Accrued liabilities
|
|
|
(15,157
|
)
|
|
|
7,983
|
|
|
(Decrease)
Increase in Accrued wages
|
|
|
(16,954
|
)
|
|
|
(8,644
|
)
|
|
(Decrease)
Increase in Accrued taxes
|
|
|
-
|
|
|
|
-
|
|
|
NET
CASH (USED) BY
|
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
322,285
|
|
|
|
2,497
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Purchase
of Fixed assets
|
|
|
(473,300
|
)
|
|
|
(39,972
|
)
|
|
Purchase
of Deposits
|
|
|
(9,050
|
)
|
|
|
-
|
|
|
NET
CASH (USED) BY
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
(482,350
|
)
|
|
|
(39,972
|
)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Increase
in Shareholder loans
|
|
|
125,264
|
|
|
|
-
|
|
|
Increase
in Bank overdrafts
|
|
|
3,357
|
|
|
|
157,244
|
|
|
NET
CASH PROVIDED BY
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
111,329
|
|
|
|
-
|
|
|
EFFECT
OF EXCHANGE RATE ON CASH
|
|
|
13,935
|
|
|
|
37,475
|
|
|
NET
INCREASE IN CASH
|
|
|
(34,801
|
)
|
|
|
-
|
|
|
CASH
AT BEGINNING OF PERIOD
|
|
|
34,801
|
|
|
|
-
|
|
|
CASH
AT END OF PERIOD
|
|
$
|
-
|
|
|
$
|
-
|
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
OPINION OF
MANAGEMENT
It is the
Opinion of the Company’s management that all adjustments that are necessary in
order to make the financial statements not misleading have been
made.
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
History
The
Company was incorporated on May 18, 2004 in the state of Delaware as Now
Marketing Corp.
On May
24, 2005, the Company acquired Conforce Container Corporation in exchange for
120,000,000 shares of the Company’s Common Stock, making Conforce Container
Corporation a wholly owned subsidiary. Immediately prior to the
acquisition, the Company had 1,000 shares of common stock issued and
outstanding. The acquisition was accounted for as a recapitalization
of Conforce Container Corporation, as the shareholders of Conforce Container
Corporation controlled the Company after the acquisition was
completed. Conforce Container Corporation was treated as the
acquiring entity for accounting purposes. There were no adjustments
to the carrying value of the assets or liabilities of acquired company or to the
assets and liabilities of the acquiring company. On May 20, 2005
Conforce Container Corporation was renamed from First National Preferred Card
Service, Inc., which was incorporated under the laws of Ontario on February 9,
2001. Conforce Container Corporation’s Balance Sheet on the date of
acquisition was as follows;
|
|
|
In
Canadian
|
|
|
|
|
Dollars
|
|
|
Assets
|
|
$
|
-0-
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Shareholder
loans
|
|
$
|
18,560
|
|
|
Equity
|
|
|
(18,560
|
)
|
|
|
|
$
|
-0-
|
|
The
Company as renamed from Now Marketing Corp to Conforce International, Inc. at
this time.
On May
24, 2005, the Company acquired 50.1% of Conforce 1 Container Terminals, Inc.,
for $100. Conforce 1 Container Terminals, Inc. was incorporated under
the laws of Ontario on November 12, 2003. The combination was
accounted for as a reverse acquisition as the shareholders of Conforce 1
Container Terminals, Inc. controlled the Company after the acquisition was
completed. Conforce 1 Container Terminals, Inc. was
treated
as the acquiring entity for accounting purposes. There were no
adjustments to the carrying value of the assets or liabilities of acquired
company or to the assets and liabilities of the acquiring
company.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The
Company’s 50.1% subsidiary, Conforce 1 Container Terminals, Inc., provides
handling, storage and transport of overseas shipping containers for
international steamship lines, as well as domestic retailers. All
revenues for the two fiscal years reported here were generated by the operations
of Conforce 1 Container Terminals, Inc. Conforce Container
Corporation has embarked on the development of a new container flooring system,
EKO-FLOR which has been designed to provide an environmentally friendly product
to increase container versatility while reducing shipping costs.
Financial Statement
Presentation
The
accompanying statements have been prepared form the books and records of the
Company and its subsidiaries. All significant intercompany accounts
have been eliminated. The Company’s 50.1% subsidiary enjoys an
October 31, yearend for tax purposes. The books and records included
herein have been adjusted for the periods ending December 31, 2008, 2007 and
March 31, 2008 respectively.
Cash and Cash
Equivalents
For
purposes of the statement of cash flows, the Company considers all short-term
debt securities purchased with a maturity of three months or less to be cash
equivalents. There was no cash paid during the periods for interest
or taxes.
Property and
Equipment
Property
and equipment are carried at cost. Maintenance, repairs and renewals
are expensed as incurred. Depreciation of property and equipment is
provided for over their estimated useful lives, which range from three and five
years, using the declining balance method. Leasehold improvements are
amortized over the life of the lease. Depreciation expense was
$32,312, 25,863 and 30,121 for the period ending December 31, 2008, 2007
and March 31, 2008 respectively.
Use of
Estimates
The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Revenue
Recognition
The only
revenue producing operations of the Company during both years is the Container
Terminal operation which recognizes revenues when services are
rendered. The operation bills at the end of each month for the
services rendered during the month.
NOTE 2 – INCOME
TAXES
The
Company accounts for income taxes under Generally Accepted Accounting Principles
used in the United States of America, which requires the Company to recognize
deferred tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company’s financial statements or tax
returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the financial statement carrying
amounts and tax basis of the assets and liabilities using enacted tax
rates. The Company has no significant differences between book and
tax accounting. The operating loss carry forward from the
periods ending March 31, 2007 was use to reduce taxable income in the periods
ending December 31, 2008, 2007 and March 31, 2008 to $0.
NOTE 3 –
EQUITY
Preferred
Stock
At March
31, 2008 and 2007, the Company had authorized 5,000,000 shares of Preferred
Stock at a par value of $.0001 per share. There were 0 shares
outstanding. The unissued shares of Preferred stock may be divided
into and issued in designated series from time to time by one or more
resolutions adopted by the Board of Directors.
Common
Stock
At March
31, 2008 and 2007, the Company had authorized 250,000,000 shares of Common Stock
at a par value of $.0001 per share. There were 120,001,000 shares
outstanding.
Stock
Transactions
On
October 26, 2006, the Company entered into an employment agreement with its
Vice-President, Product Development. The agreement is for a period of
twelve months, fixes compensation level and calls for an issue of Common stock
on the 30
th
of each
month
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 3 – EQUITY –
CONTINUED
during
the life of the agreement. In addition an additional 200,000 shares
are to be issued at the end of the agreement. Shares issues are
dependent upon continued employment. The shares were provided by the
majority shareholder of the Company. Shares issued during the year
ended March 31, 2008 totaled 200,000 and were valued at $62,600 and shares
issued during the year ended March 31, 2007 totaled 50,000 and were valued at
$27,300. Valuation was based on the trading value of the shares on
the date the shares were provided and issued which in all cases the on the same
day.
On
October 31, 2007, the Company entered into a renewal of the employment agreement
with it Vice-President, Product Development. The agreement was for a
period of twelve months, fixes compensation level and calls for an issue of
Common stock upon completion of the agreement if certain goals are met in
connection with the EKO-FLOR products. None of the performance
criteria were met as of March 31, 2008. This agreement was verbally
extended for an additional twelve months. The goals outlined appear
to be obtainable in the current year. Accordingly the value of the
issue was computed using the Black Sholes method of determining the present
value of a future event. The liability computed at December 31, 2008
was $67,200. The asset Other Current Assets From Derivative
Computation records the charge from this computation and will be expensed when
the goals have been obtained.
NOTE 4 – RELATED
PARTIES
At
December 31, 2008 and March 31, 2008 the Company owed $450,114 and $324,850
respectively to Marino Kulas, the CEO, a member of the Board of Directors and
majority shareholder under an informal borrowing arrangement. These
loans, made in Canadian Dollars, are without interest or terms of
repayment. There were no repayments made under this arrangement
during the periods ending December 31, 2008, 2007 and March 31, 2008
respectively. Interest has been imputed on these notes at 1.5
percent.
The
Company also rents three pieces of equipment on a month to month basis from a
related party. Rent expense for these items was $13,625, $0 and
$16,625 for the periods ending December 31, 2008, December 31, 2007 and March
31, 2008 respectively. The rental rate paid by the Company to the
related party is felt by management to be a competitive
rate.
The
CEO of the Company, Marino Kulas, is the 49.9 % minority shareholder of Conforce
1 Container Terminals, Inc.
The
Company had no sales or purchases to or from TRC during the periods ending
December 31, 2008, 2007 and March 31, 2008.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 4 – RELATED PARTIES -
CONTINUED
During
2008 the CEO of the Company contributed 200,000 shares, of Common stock,
respectively to satisfy the stock issue requirements of an employment
agreement.
NOTE 5 –
COMMITMENTS
The
Company leases office space under a five year lease which runs through April
2012. Monthly lease payments are $2,883.
The
Company leases container terminal site space under a lease which originally ran
from April 2004 to March 2007. The lease was renewed in April 2007 for an
additional five year term to March 2012 with monthly lease payments increasing
by $3,514 to $14,641 per month. In December 2008, the Company
entered into a three year lease for its production and development centre site
space. The monthly payments are $9,350 and will commence in January 2009 and run
until December 2011.
Future
lease commitments are as follows: Fiscal 2009 represents the Company’s fourth
quarter ending March 31, 2009.
Future
commitments;
|
Fiscal 2009
|
|
$
|
80,622
|
|
|
Fiscal 2010
|
|
|
322,488
|
|
|
Fiscal 2011
|
|
|
322,488
|
|
|
Fiscal 2012
|
|
|
294,438
|
|
|
Fiscal 2013
|
|
|
-0-
|
|
|
Thereafter
|
|
|
-0-
|
|
NOTE 6 – MINORITY
INTEREST
Minority
interest on the consolidated balance sheets represents the portion of the
shareholders’ equity at the respective year ends not owned by the shareholders
of the Company.
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 7 – BUSINESS
SEGMENTS
The
Company operated in three reportable business segments; Container Terminal,
EKO-FLOR and Administrative. The Container Terminal operations are
organized as Conforce 1 Container Terminals, Inc. is a 50.1% owned subsidiary of
the Company. The subsidiary is responsible for all container terminal
operations. EKO-FLOR is organized as Conforce Container Corporation a
100% owned subsidiary of the Company. This subsidiary is responsible
for the development, manufacturing and marketing of the Company’s EKO-FLOR
product. Operations to date have been research and
development. The Administrative operations are the operations of the
parent company Conforce International, Inc. The operations to date
have been minimal since formation.
Business
Segments –For the Period Ended December 31, 2008
|
|
|
Container
Terminals
|
|
|
|
|
|
|
|
|
|
|
|
|
EKO-FLOR
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,575,188
|
|
|
$
|
-0-
|
|
|
$
|
1,575,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
893,329
|
|
|
|
-0-
|
|
|
|
893,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
585,536
|
|
|
|
-0-
|
|
|
|
585,536
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
86,631
|
|
|
|
86,631
|
|
|
Depreciation
|
|
|
32,314
|
|
|
|
-0-
|
|
|
|
32,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss)
From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
$
|
63,939
|
|
|
$
|
(86,631
|
)
|
|
$
|
(22,692
|
)
|
Total
Assets, December 31, 2008
|
Container
Terminals
|
|
$
|
1,409,854
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(548,211
|
)
|
|
Consolidated Total
Assets
|
|
$
|
861,643
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 7 – BUSINESS SEGMENTS –
CONTINUED
Business
Segments –For the Period Ended December 31, 2007
|
|
|
Container
Terminals
|
|
|
|
|
|
|
|
|
|
|
|
|
EKO-FLOR
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,586,689
|
|
|
$
|
-0-
|
|
|
$
|
1,586,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
952,436
|
|
|
|
-0-
|
|
|
|
952,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
580,608
|
|
|
|
-0-
|
|
|
|
580,608
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
124,304
|
|
|
|
124,304
|
|
|
Depreciation
|
|
|
25,863
|
|
|
|
-0-
|
|
|
|
25,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
$
|
27,782
|
|
|
$
|
(124,304
|
)
|
|
$
|
(96,522
|
)
|
Total
Assets, December 31, 2007
|
Container
Terminals
|
|
$
|
764,131
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(124,304
|
)
|
|
Consolidated Total
Assets
|
|
$
|
639,827
|
|
Business
Segments –For the Year Ended March 31, 2008
|
|
|
Container
Terminals
|
|
|
|
|
|
|
|
|
|
|
|
|
EKO-FLOR
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,364,945
|
|
|
$
|
-0-
|
|
|
$
|
2,364,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
1,293,100
|
|
|
|
-0-
|
|
|
|
1,293,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
725,891
|
|
|
|
-0-
|
|
|
|
725,891
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
209,437
|
|
|
|
209,437
|
|
|
Depreciation
|
|
|
30,121
|
|
|
|
-0-
|
|
|
|
30,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss)
From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
$
|
308,014
|
|
|
$
|
(209,437
|
)
|
|
$
|
99,111
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
NOTE 7 – BUSINESS SEGMENTS –
CONTINUED
Total
Assets, March 31, 2008
|
Container
Terminals
|
|
$
|
1,101,407
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(461,580
|
)
|
|
Consolidated Total
Assets
|
|
$
|
639,827
|
|
|
Exhibit
|
|
|
No.
|
Description
|
|
2.0
|
Acquisition
Agreement and Plan of Merger dated May 24, 2005 *
|
|
3.1
|
Certificate
of Incorporation for Conforce International, Inc.
*
|
|
3.1.1
|
Certificate
of Incorporation for Conforce Container Corporation
*
|
|
3.1.2
|
Certificate
of Incorporation for Conforce 1 Container Terminals, Inc.
*
|
|
3.2
|
Bylaws
*
|
|
10.1
|
Canada
Small Business Financial Loan dated November 26,
2008*
|
|
10.2
|
Sea
Box, Inc. Purchase Order dated November 25, 2009
|
|
10.3
|
Letter
of Agreement in Connection with the Strategic Partnership Between Conforce
International, Inc. and Bayer MaterialScience, LLC. dated February 2,
2009
|
|
10.4
|
Advisory
Agreement between WorldWide Associates, Inc. and Conforce International,
Inc. dated April 2, 2007
|
*
Denotes previously filed exhibits with Conforce International, Inc.’s Form
10-12G.
SIGNATURES
Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
June
29, 2009
|
By:
|
/s/ Marino
Kulas
|
|
|
|
|
Marino
Kulas
|
|
|
|
|
President
& CEO
|
|
|
|
|
|
|
Conforce (GM) (USOTC:CFRI)
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