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
($88,498) and depreciation ($32,314) expenses of $706,348 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 total operating expenses of $24,427 or 0.033% from the prior
period. This decrease was primarily due to a decrease in research and
development expenses.
The
Company had a loss from operations of ($24,559) 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 $31,906 for
the period ended December 31, 2008 compared to $13,863 for the period ended
December 31, 2007. This adjustment accurately portrays the 49.9% minority
interest in Conforce 1 Container Terminals, Inc. Such significant increases are
a direct result of increased sales volumes.
The
net loss for the year was ($56,465) 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 December 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, entered into
November 26, 2008, through a government sponsored program in the amount of
250,000 CDN (USD 198,403) payable over 10 years (due January
2019). The interest rate due on the loan is Canadian Prime plus
3.00%. Blended payments of principal plus interest of $2,902.49 CDN
are due and have been paid monthly. Conforce received the full
business loan in the amount of 250,000 CDN (USD 198,403) in January 2009. 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. Conforce is attempting to secure additional funding 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 loans will be made to the Company from the proceeds of private transactions
with accredited investors involving the sale of Conforce common stock. To date,
the shareholder loans have been oral. At present, the Company intends
to enter into additional oral agreements pertaining to future shareholder loans.
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 additional capital for purposes of establishing an EKO-FLOR
manufacturing facility in China. Such capital requirement is currently estimated
to be 8 – 10 million USD. The Company had received loans,
pursuant to oral agreements, from Marino Kulas, CEO and shareholder, equal to
$450,114 at December 31, 2008.
LIABILITIES
The
Company had Accounts payable of $147,120 at December 31, 2008 compared to
an Accounts payable balance of $66,322 as at March 31, 2008, an increase of
$80,798. 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. The imputed rate of interest on these Shareholder loans is
1.50% per annum. 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. PROPERTIES
.
The
Company’s headquarters are located at 51A Caldari Road, 2nd Floor, Concord,
Ontario L4K 4G3, Canada. The annual lease cost for 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 CERTAIN 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
|
|
Marino
Kulas
40
Bellini Avenue
Brampton,
Ontario L6T 3Z8
|
Common
Stock
|
61,001,000
|
50.834%
|
|
Elio
Guglietti
28
Anthia Drive
North
York, Ontario M9L 1K5
|
Common
Stock
|
11,400,000
|
9.500%
|
|
Michael
Moyal
10520
Yonge St., Suite 298
Richmond
Hill, Ontario L4C 3C7
|
Common
Stock
|
9,070,000
|
7.558%
|
|
Slavko
Kulas
8870
Martingrove Road
Woodbridge,
Ontario L4H 1C2
|
Common
Stock
|
5,000,000
|
4.167%
|
|
Joseph
DeRose
60
Crofters Road
Woodbridge,
Ontario L4L 7C7
|
Common
Stock
|
420,000
|
0.350%
|
|
Kathryn
Saliani
156
Beech Street
Brampton,
Ontario L6V 1V6
|
Common
Stock
|
50,000
|
0.0417%
|
|
Total
|
Common
Stock
|
86,941,000
|
72.450%
|
|
Directors and Executive
Officers
|
Common Stock
|
66,471,000
|
55.392%
|
(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)
Marino
Kulas recognized that Slavko Kulas’ extensive contacts and over 19 years
experience in the container industry made him an indispensible member of the
Company’s management team and determined that it would be in the best interests
of the Company and, by extension all Conforce shareholders, to complete the
above-described transfer of shares to provide Slavko Kulas with additional
incentive to achieve success in the commercialization of EKO-FLOR.
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
|
|
Marino
Kulas
|
43
|
President
& CEO, Director
|
|
Joseph
DeRose
|
53
|
VP
of Product Development
|
|
Kathryn
Saliani
|
55
|
Director
of Business Operations, Director
|
|
Slavko
Kulas
|
48
|
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 COMPENSATION
December
31, 2008 and 2007 SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
Change
in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
|
Total
|
|
|
Name
and Principal Position
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
($)
|
($)
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marino
Kulas
|
2007
|
|
|
91,000
|
|
|
|
|
|
|
|
|
|
|
|
91,000
|
|
|
President
& CEO, Director
|
2008
|
|
|
91,000
|
|
|
|
|
|
|
|
|
|
|
|
91,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
DeRose
|
2007
|
|
|
45,500
|
|
|
|
|
267,000
|
|
|
|
|
|
|
|
45,500
|
|
|
VP
of Product Development
|
2008
|
|
|
45,500
|
|
|
|
|
|
|
|
|
|
|
|
|
45,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathryn
Saliani
|
2007
|
|
|
50,000
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
50,000
|
|
|
Director
of Business Op., Director
|
2008
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Slavko
Kulas
|
2007
|
|
|
52,000
|
|
|
|
|
|
|
|
|
|
|
|
|
52,000
|
|
|
Director
of Terminal Op.
|
2008
|
|
|
52,000
|
|
|
|
|
|
|
|
|
|
|
|
|
52,000
|
|
NON-EMPLOYEE
DIRECTOR COMPENSATION
None.
ITEM
7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
.
For the
12 month period ended March 31, 2008, Conforce had a balance of loans
outstanding from its founder and CEO, Marino Kulas in the amount of
$324,850. No interest is payable under these loans, however, they
bear an imputed interest rate of 1.50%. No amount has been repaid
under these loans and there are no fixed terms of repayment. By
comparison, for the 12 month period ended March 31, 2007, Conforce had
a balance of loans outstanding from Marino Kulas on the same terms in the amount
of $287,375. There were two related party transactions between Marino
Kulas and the Company. Marino Kulas loaned Conforce CDN $272,045 and
CDN $60,000 on March 31, 2005, and September 11, 2006,
respectively. The prevailing rate of foreign exchange between
Canadian and U.S. currency at March 31, 2008 was $0.978331 for a total
shareholder loan balance of USD 324,850.
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 its 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
|
|
|
June
30, 2009
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
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 SUPPLEMENTARY 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
|
|
|
|
|
|
|
|
RESTATED
|
|
|
|
|
|
|
|
|
|
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
Stock -----
|
|
|
Treasury
Stock -----
|
|
|
Contributed
|
|
|
Retained
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
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
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
27,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,300
|
|
|
Stock
issued for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employment
agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
|
(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
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
200,000
|
|
|
|
62,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
62,600
|
|
|
Stock
issued for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employment
agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(200,000
|
)
|
|
|
(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
|
|
|
|
|
|
|
|
RESTATED
|
|
|
|
|
|
|
|
|
|
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 30th of each month
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.
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
Sheet
|
|
|
|
|
|
|
|
December
31, 2008
RESTATED
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
March
31,
|
|
|
|
|
2008
|
|
|
2008
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
34,801
|
|
|
Accounts
receivable
|
|
|
200,996
|
|
|
|
457,012
|
|
|
Other
receivables
|
|
|
32,569
|
|
|
|
37,172
|
|
|
Total
Current Assets
|
|
|
233,565
|
|
|
|
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
|
|
$
|
794,443
|
|
|
$
|
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
|
|
|
Total
Current Liabilities
|
|
|
617,484
|
|
|
|
440,176
|
|
|
Minority
interest in consolidated subsidiaries
|
|
|
312,431
|
|
|
|
280,525
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
|
-
|
|
|
Common
stock
|
|
|
9,157
|
|
|
|
9,157
|
|
|
Additional
contributed capital
|
|
|
91,767
|
|
|
|
89,900
|
|
|
Retained
earnings
|
|
|
(236,396
|
)
|
|
|
(179,931
|
)
|
|
|
|
|
(135,472
|
)
|
|
|
(80,874
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
|
$
|
794,443
|
|
|
$
|
639,827
|
|
See
accompanying notes to financial statements.
|
Conforce
International, Inc.
|
|
|
|
|
|
|
|
|
|
|
Statement
of Income
|
|
|
|
|
|
|
|
|
|
|
For
the Nine Months Ended December 31, 2008 and December 31,
2007
|
|
|
|
|
|
and
for the 12 months ending March 31, 2008
RESTATED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
88,498
|
|
|
|
124,304
|
|
|
|
209,437
|
|
|
Depreciation
|
|
|
32,314
|
|
|
|
25,863
|
|
|
|
30,121
|
|
|
|
|
|
706,348
|
|
|
|
730,775
|
|
|
|
965,449
|
|
|
OTHER
INCOME AND EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain)/loss
on currency conversion
|
|
|
-
|
|
|
|
-
|
|
|
|
7,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
(24,559
|
)
|
|
|
(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)
|
|
$
|
(56,465
|
)
|
|
$
|
(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.
|
|
|
|
|
|
|
|
Statement
of Cash Flows
|
|
|
|
|
|
|
|
For
the Nine Months Ended December 31, 2008, December 31, 2007
RESTATED
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
Net
Income/(loss) for the period
|
|
$
|
(56,465
|
)
|
|
$
|
(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
|
|
|
1,867
|
|
|
|
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 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
|
|
|
318,928
|
|
|
|
(154,747
|
)
|
|
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
|
|
|
128,621
|
|
|
|
157,244
|
|
|
EFFECT
OF EXCHANGE RATE ON CASH
|
|
|
-
|
|
|
|
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
RESTATEMENT
These
financial statements have been restated to omit $67,200 from current assets and
liabilities. This restatement was required in order to correct the
recording of stock compensation under an employment
agreement. The corresponding reference to the $67,200
has also been omitted from Note 3
.
In addition, the financial
statements have been restated to record a stock transaction issued under an
employment agreement (see
NOTE 3 – EQUITY - Stock Transactions
for further information),
as well as to correct the presentation of bank overdrafts in the Statement of
Cash Flows. The effects of the restatement are shown
below:
|
|
|
Original
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Adjustments
|
|
|
As
Restated
|
|
|
Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$
|
300,765
|
|
|
$
|
67,200
|
|
|
$
|
233,565
|
|
|
Total Assets
|
|
$
|
861,643
|
|
|
$
|
67,200
|
|
|
$
|
794,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
$
|
684,684
|
|
|
$
|
67,200
|
|
|
$
|
617,484
|
|
|
Total Liabilities and Equity
|
|
$
|
861,643
|
|
|
$
|
67,200
|
|
|
$
|
794,443
|
|
|
Additional Capital Contributed
|
|
$
|
89,900
|
|
|
$
|
1,867
|
|
|
$
|
91,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations
|
|
$
|
(22,692
|
)
|
|
$
|
(1,867
|
)
|
|
$
|
(24,559
|
)
|
|
Net
Income (Loss)
|
|
$
|
(54,598
|
)
|
|
$
|
(1,867
|
)
|
|
$
|
(56,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Used by Operations
|
|
$
|
322,285
|
|
|
$
|
3,357
|
|
|
$
|
318,928
|
|
|
Cash Provided by Financing Activities
|
|
$
|
125,264
|
|
|
$
|
3,357
|
|
|
$
|
128,621
|
|
|
Compensation paid by stock
|
|
$
|
0
|
|
|
$
|
1,867
|
|
|
$
|
1,867
|
|
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 (the “VP
Employment Agreement”) with its Vice-President, Product
Development. The initial term of the VP Employment Agreement was
twelve months. Pursuant to the terms of the VP Employment
Agreement, a founding shareholder of Conforce agreed to provide 10,000
shares of Common stock per month. In addition, a founding shareholder
of Conforce agreed to provide 200,000 shares of Common Stock at the end of the
employment term (i.e. October 26, 2007). Shares provided under the VP Employment
Agreement during the year ended March 31, 2008 totaled 200,000 and were valued
at $62,600 and shares provided during the year ended March 31, 2007 totaled
50,000 and were valued at $27,300. These valuations were based on the
trading value of shares of the Common Stock on the date the shares were
provided.
On
October 31, 2007, the Company entered into an extension of the VP Employment
Agreement. Pursuant thereto, the VP Employment Agreement was extended
for a period of twelve months, through October 31, 2008. In
accordance with this extension, a founding shareholder of the Company agreed to
provide additional compensation in the form of Common stock of Conforce if
certain performance criteria were satisfied in connection with the development
of the EKO-FLOR products. None of the performance criteria had been
met as of March 31, 2008, five months into the agreement or when the agreement
expired at October 31, 2008. Consequently, no additional shares of
Common Stock were provided under the VP Employment Agreement. The VP
Employment Agreement was extended for an additional twelve months through
October 31, 2009. This renewal also provided for the above-mentioned additional
compensation in the form of common stock if certain performance criteria were
satisfied in connection with the development of Eko-Flor products. As of
December 31, 2008, one component of the performance criteria was satisfied
entitling recipient to the distribution of 80,000 shares of common stock at the
end of the renewal period (October 31, 2009). The shares allocated under the
agreement as at December 31, 2008 totaled 13,333 and were valued at $1,867. This
valuation was based on the highest trading value recorded for the shares during
the months of November and December 2008.
The
recording of the stock compensation as described above effected a restatement of
the December 31, 2008 financial statements. The effects of the restatement
are shown below;
|
|
|
Original
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Adjustment
|
|
|
As
Revised
|
|
|
Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
Additional
contributed capital
|
|
$
|
89,900
|
|
|
$
|
1,867
|
|
|
$
|
91,767
|
|
|
Retained
earnings
|
|
$
|
(234,529
|
)
|
|
$
|
(1,867
|
)
|
|
$
|
(236,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
$
|
704,481
|
|
|
$
|
1,867
|
|
|
$
|
706,348
|
|
|
Income
from operations
|
|
$
|
22,692
|
|
|
$
|
(1,867
|
)
|
|
$
|
(24,599)
|
|
|
Net
Income (Loss)
|
|
$
|
(54,598)
|
|
|
$
|
(1,867
|
)
|
|
$
|
(56,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flow Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss) for the period
|
|
$
|
(54,598)
|
|
|
$
|
(1,867
|
)
|
|
$
|
(56,465
|
)
|
|
Compensation
paid by stock
|
|
$
|
0
|
|
|
$
|
1,867
|
|
|
$
|
1,867
|
|
Conforce
International, Inc.
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008, 2007 and March 31, 2008
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
|
|
$
|
1,575,118
|
|
|
$
|
-0-
|
|
|
$
|
1,575,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
cost of Sales
|
|
|
893,329
|
|
|
|
-0-
|
|
|
|
893,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
– operations
|
|
|
585,536
|
|
|
|
-0-
|
|
|
|
585,536
|
|
|
Research
& development
|
|
|
-0-
|
|
|
|
88,498
|
|
|
|
88,498
|
|
|
Depreciation
|
|
|
32,314
|
|
|
|
-0-
|
|
|
|
32,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss)
From Operations
|
|
$
|
63,939
|
|
|
$
|
(88,498
|
)
|
|
$
|
(24,559
|
)
|
Total
Assets, December 31, 2008
|
Container
Terminals
|
|
$
|
1,342,654
|
|
|
EKO-FLOR
|
|
|
-0-
|
|
|
Inter-company
receivable
|
|
|
(548,211
|
)
|
|
Consolidated
Total Assets
|
|
$
|
794,443
|
|
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 *
|
|
10.5
|
Employment
Renewal Proposal for Joseph DeRose dated October 31, 2008 *
|
|
10.6
|
Employment
Proposal for Joseph DeRose dated Octobe 27, 2006
|
|
10.7
|
Employment
Renewal Proposal for Joseph DeRose dated October 31,
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.
|
|
|
|
|
|
|
|
October 16 , 2009
|
By:
|
/s/ Marino
Kulas
|
|
|
|
|
Marino
Kulas
|
|
|
|
|
President
& CEO
|
|
|
|
|
|
|
