UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-KSB
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December
31, 2007
Commission File
Number 0-25909
AUSTRALIAN FOREST
INDUSTRIES
(f/k/a Multi-Tech International,
Corp.)
(Name of small business issuer in
its charter)
Nevada 86-0931332
(State or other jurisdiction
of (I.R.S.
Employer
incorporation or organization)
Identification
No.)
|
4/95 Salmon Street, Port Melbourne,
Victoria
Australia, 3207
(Address
of principal executive offices) (Zip Code)
Issuer's
telephone number: 011 61 3 8645 4340
Securities
registered under Section 12(b) of the Exchange Act:
|
Name of Each Exchange
Title of Each
Class
on Which Registered
NONE
NONE
|
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, $0.001 par value
(Title of
Class)
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90
days. Yes S No □
Persons
who are to respond to the collection of information contained in this form are
not required to respond unless the SEC 2337 (3-05) form displays a currently
valid OMB control number.
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes □ No S
State the
issuer’s revenues for its most recent fiscal year. As of December 31,
2007, no revenues were realized.
State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was sold, or the average bid and asked price of
such common equity, as of a specified date within
the past 60 days. (See definition of affiliate in Rule 12b-2 of the
Exchange Act.) The aggregate market value of the
voting common stock held by non-affiliates of the registrant as of April 14,
2008 was approximately $1,700,000 based on 17,000,000 shares of
common stock. The number of shares of Common Stock of the registrant outstanding
on April 14, 2008 was
257,600,680.
Note: If
determining whether a person is an affiliate will involve an unreasonable effort
and expense, the issuer may calculate the aggregate market value of the common
equity held by non-affiliates on the basis of reasonable assumptions, if the
assumptions are stated.
(ISSUERS
INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Check
whether the issuer has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by
court. Yes No
(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)
As of
April 14, 2008, there are 257,600,680 shares of common stock.
DOCUMENTS
INCORPORATED BY REFERENCE
If the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The
listed documents should be clearly described for identification purposes (e.g.,
annual report to security holders for fiscal year ended December 24,
1990).
Transitional Small Business Disclosure
Format (Check one): Yes ______; No __X__
PART I
ITEM 1. DESCRIPTION OF
BUSINESS
Australian
Forest Industries ("the Company"), through its wholly owned subsidiary
Integrated Forest Products Pty Ltd ("Integrated"), previously operated a saw
mill in Australia which cut pine timber into building products to supply the
commercial and residential industry along the eastern coast of Australia. In
July 2007, it went into receivership in Australia and, as a result, discontinued
its operations. However, the Company has not been involved in any bankruptcy,
receivership or similar proceeding. Additionally, the Company has not been
involved in any material reclassification, merger, consolidation, or purchase or
sale of a significant amount of assets not in the ordinary course of
business.
On
September 1, 2006, Integrated, owned by the Timbermans Group Pty Ltd
("Timbermans"), entered into a share exchange agreement with the Company and
issued 240,000,000 shares of its common stock to acquire Integrated. In
connection with the share exchange agreement, Integrated became a wholly owned
subsidiary of the Company and Integrated's officers and directors became the
officers and directors of the Company. Prior to the merger, the Company was a
non-operating "shell" corporation.
Pursuant
to Securities and Exchange Commission rules, the merger of a private operating
company (Integrated) into a non-operating public shell corporation with nominal
net assets is considered a capital transaction. Accordingly, for accounting
purposes, the merger has been treated as an acquisition of the Company by
Integrated and a recapitalization of the Company. The historical financial
statements for the years ended December 31, 2007 and 2006 are those of
Integrated. Since the merger is a recapitalization and not a business
combination, pro forma information is not presented.
As shown
in the accompanying consolidated financial statements, the Company has incurred
a net loss of $25,432,835 in 2007 and had a stockholders' deficit of $34,412,897
at December 31, 2007. Management's plans include the dissolution of the business
and the liquidation of all liabilities. It also plans to spin out the bankrupt
subsidiary and look for a merger candidate for the public shell. The Company
subsidiary is in bankruptcy under Australian laws. The accompanying consolidated
financial statements have been prepared on a liquidation basis and discontinued
operation.
HISTORY
Australian
Forest Industries f/k/a Multi-Tech International, Corp., hereinafter referred to
as "the Company", "we' or "us", was originally organized by the filing of
Articles of Incorporation with the Secretary of State of the State of Nevada on
September 21, 1998 under the name Oleramma, Inc. The Articles of Incorporation
authorized the issuance of one hundred five million (105,000,000) shares,
consisting of one hundred million (100,000,000) shares
of Common
Stock at par value of $0.001 per share and five million (5,000,000) shares of
Preferred Stock at par value of $0.001.
On April
28, 1999, the Company changed its name to BuckTV,Com, Inc. on the basis that the
Company would market consumer products through an InteractiveWeb site. The
Company again changed its name in November 2002 to Multi-Tech International,
Corp.
On
September 1, 2004, we entered into a Share Exchange Agreement with Timbermans
Group Pty Ltd, an Australian corporation and its wholly-owned subsidiary at the
time Integrated Forest Products Pty Ltd, an Australian corporation as well
(“Share Exchange Agreement” and “Share Exchange”, respectively). Pursuant to
such Share Exchange Agreement, we:
|
·
|
completed
a 200-1 reverse stock split of our common
stock
|
|
·
|
increased
our authorized number of shares from 100,000,000 to
300,000,000
|
|
·
|
changed
our name from Multi-Tech International, Inc. to Australian Forest
Industries
|
|
·
|
appointed
Messrs. Michael Timms, Norman Backman, Colin Baird, Antony Esplin and
Roger Timms to the board of
directors
|
|
·
|
issued
257,000,000 shares of our common stock as a result of the Share Exchange
Agreement
|
Thus,
upon completion of the Share Exchange, Integrated Forest Products Pty Ltd
(“IFP”) became a wholly-owned subsidiary of the Company and the Company’s symbol
on the OTC-BB was changed from “MLTI” to “AUFI”.
Recent
events
On July
31, 2007, PricewaterhouseCoopers Australia was appointed Receivers and Managers
of both Integrated and Timbermans. On this same date, Deloitte was
appointed Liquidator of Timbermans. Romanis Cant was appointed
Liquidator of Integrated on October 18, 2007.
Business
operations of Integrated were continued until November 30, 2007 when all the
assets of Integrated were offered for sale as a going concern. No
offers capable of acceptance by the Receivers were submitted. As a
result, the Receivers entered into contracts to sell the land, plant and
equipment of IFP as individual assets. Settlement of these contracts
is expected to take place around the end of April 2008.
Timbermans
owned two major assets, a rural property and the shares in the
Company. The rural property was sold by auction on March 14,
2008. The Company has entered into a contract to sell its land and
buildings for $9,556,357 and all of its manufacturing equipment for $964,403.
Settlement of this sale is expected to take place around the end of April
2008. The sale of the Company’s shares is expected to conclude
shortly after the completion of the audit of Integrated and Timbermans'
accounts, and lodgment of the requisite reports with the authorities in the
United States.
ITEM
2. DESCRIPTION OF PROPERTY
Timbermans
owned a rural property that was sold by auction on March 14,
2008. The Company has entered into a contract to sell its land and
buildings for $9,556,357. Settlement of this sale is expected to take
place around the end of April 2008.
ITEM
3. LEGAL PROCEEDINGS
Integrated
and Timbermans were placed under administration in Australia (in the U.S. this
is tantamount to a Chapter 11 Bankruptcy). On July 31, 2007,
PricewaterhouseCoopers Australia was appointed Receivers and Managers of both
Integrated and Timbermans. Also on this same date, Deloitte was
appointed Liquidator of Timbermans. Romanis Cant was appointed
Liquidator of Integrated on October 18, 2007.
Business
operations of Integrated were continued until November 30, 2007 when all of the
assets of Integrated were offered for sale as a going concern. No
offers capable of acceptance by the Receivers were submitted. As a
result, the Receivers entered into contracts to sell the land, plant and
equipment of Integrated as individual assets. Settlement of these
contracts is expected to take place around the end of April 2008.
Timbermans
owned two major assets, a rural property and the shares in the
Company. The rural property was sold by auction on March 14,
2008. Settlement of this sale is expected to take place around the
end of April 2008. The sale of the Company’s shares is expected to
conclude shortly after the completion of the audit of Integrated and Timbermans'
accounts, and lodgment of the requisite reports with the authorities in the
United States.
Oz
Investmentcorp Pty Ltd. initiated a letter of demand for the $1,578,600 due from
the Timbermans Group for full payment of funds lent to the Timbermans
Group. The Company
is currently negotiating with Oz and had agreed to provide additional
collateral.
On
November 14, 2007, the Company was named as a co-defendant in a lawsuit brought
in the High Court of Justice Chancery Division, England by Courical Holding B.V.
(“Plaintiff”) whereby it is alleged that the Plaintiff invested $650,000 in
Zebra Mining Services Limited (“Co-Defendant”) in exchange for 325,000 shares of
Company common stock and 325,000 warrants to purchase Company common stock
pursuant to an agreement between the three parties. The Plaintiff alleges that
it never received any consideration for its investment from either the
Co-Defendant or the Company. Although the Company anticipates submitting an
answer to such Complaint, it has not currently done so as it is considering its
course of action thereto.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The
Company's Common Stock is traded on the OTC-Bulletin Board under the symbol
AUFI. The following sets forth the range of the closing bid prices for the
Company's Common Stock for the period January 1, 2006 through April 14, 2008.
Such prices represent inter-dealer quotations, do not represent actual
transactions, and do not include retail mark-ups, mark-downs or commissions.
Such prices were determined from information provided by a majority of the
market makers for the Company's Common Stock.
|
|
|
High
Close
|
Low
Close
|
|
2006
|
|
|
|
|
First
Quarter
|
|
4.35
|
0.75
|
|
Second
Quarter
|
|
0.94
|
0.75
|
|
Third
Quarter
|
|
0.30
|
0.12
|
|
Fourth
Quarter
|
|
0.42
|
0.31
|
|
|
|
|
|
|
2007
|
|
|
|
|
First
Quarter
|
|
0.42
|
0.20
|
|
Second
Quarter
|
|
0.22
|
0.10
|
|
Third
Quarter
|
|
0.11
|
0.07
|
|
Fourth
Quarter
|
|
0.15
|
0.07
|
|
|
|
|
|
|
2008
|
|
|
|
|
First
Quarter
|
|
0.10
|
0.05
|
|
Second
Quarter
|
|
0.05
|
0.05
|
|
|
(b)
The approximate number of holders of the Common Stock of the Company as of
April 14, 2008 was 1,000.
|
|
|
(c)
No cash dividends were declared by the Company during the fiscal year
ended December 31, 2007.
|
ITEM
6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING STATEMENTS
It should be noted that this
Management's Discussion and Analysis of Financial Condition and Results of
Operations may contain "forward-looking statements." The terms "believe,"
"anticipate," "intend," "goal," "expect," and similar expressions may identify
forward-looking statements. These forward-looking statements represent the
Company's current expectations or beliefs concerning future events. The matters
covered by these statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those set forth in the
forward-looking statements, including the Company's dependence on
weather-related factors, introduction and customer acceptance of new products,
the impact of competition and price erosion, as well as supply and manufacturing
restraints and other risks and uncertainties. The foregoing list should not be
construed as exhaustive, and the Company disclaims any obligation subsequently
to revise any forward-looking statements to reflect events or circumstances
after the date of such statements, or to reflect the occurrence of anticipated
or unanticipated events. In light of the significant uncertainties inherent in
the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation that the strategy,
objectives or other plans of the Company will be achieved. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made.
Integrated
and Timbermans are currently under administration in Australia (in the U.S. this
is tantamount to a Chapter 11 Bankruptcy). On July 31, 2007, Price
Waterhouse Coopers LLP was appointed Receivers and Managers of both Integrated
and Timbermans. Also on this same date, Deloitte was appointed
Liquidator of Timbermans. Romanis Cant was appointed Liquidator of
Integrated on October 18, 2007.
The
business operations of Integrated were continued until November 30, 2007 when
all of the assets of Integrated were offered for sale as a going
concern. No offers capable of acceptance by the Receivers were
submitted. As a result, the Receivers entered into contracts to sell
the land, plant and equipment of Integrated as individual
assets. Settlement of these contracts is expected to take place
around the end of April 2008.
Timbermans
owned two major assets, a rural property and the shares in the
Company. The rural property was sold by auction on March 14,
2008. The Company has entered into a contract to sell its land and
buildings for $9,556,357 and all of its manufacturing equipment for $964,403.
Settlement of this sale is expected to take place around the end of April
2008. The sale of the Company’s shares is expected to conclude
shortly after the completion of the audit of Integrated and Timbermans'
accounts, and lodgment of the requisite reports with the authorities in the
United States.
As shown in the accompanying
consolidated financial statements, the Company has incurred a net loss of
$25,432,835 in 2007 and had a stockholders' deficit of $34,412,897 at December
31, 2007. Management's plans include the dissolution of the business and the
liquidation of all liabilities. It also plans to spin out the bankrupt
subsidiary and look for a
merger candidate. The
Company’s
subsidiary is in bankruptcy
under Australian laws.
Our
current business objective for the next 12 months is to investigate and, if such
investigation warrants, acquire a target company or business seeking the
perceived advantages of being a publicly held corporation. We will
not restrict our potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of
business.
We do not
currently engage in any business activities that provide us with positive cash
flows. As such, the costs of investigating and analyzing business
combinations for the next approximately 12 months and beyond will be paid
through funds from financing to be obtained.
During
the next 12 months we anticipate incurring costs related to filing of Exchange
Act reports and costs relating to consummating an acquisition.
We
believe we will be able to meet these costs with amounts to be loaned to or
invested in us by our stockholders or other investors.
We may
consider a business which has recently commenced operations, is a developing
company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business
which may be experiencing financial or operating difficulties and is in need of
additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.
Any
target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be
subject to numerous risks inherent in the business and operations of financially
unstable and early stage or potential emerging growth companies. In
addition, we may effect a business combination with an entity in an industry
characterized by a high level of risk, and, although our management will
endeavor to evaluate the risks inherent in a particular target business, there
can be no assurance that we will properly ascertain or assess all significant
risks.
RESULTS OF
OPERATIONS
The
Company’s subsidiary is in bankruptcy under Australian laws.
Losses
associated with discontinued operations for the twelve-month period ended
December 31, 2006 aggregated $6,232,558. As a result, we realized a
net operating loss from discontinued operations of $6,232,558 or $(0.02) per
share.
Losses
associated with discontinued operations for the twelve-month period ended
December 31, 2007 aggregated $9,792,485. As a result, we realized a
net operating loss from discontinued operations of $25,432,835 or $(0.10) per
share.
LIQUIDITY AND CAPITAL
RESOURCES
On
December 31, 2005 and 2006 we had no assets.
The
Company had total liabilities of $34,412,897 and 6,934,184 in 2007 and 2006,
respectively.
The
Company has incurred a net loss of $25,432,835 in 2007 and had a stockholders'
deficit of $34,412,897 at December 31, 2007. In 2006, the Company
incurred a net loss of $6,232,558 and had a stockholders’ deficit of
$6,834,184.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
The
Company’s discussion and analysis of its financial condition and results of
operations are based upon its financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to bad debts, income taxes and
contingencies and litigation. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
Recent
Accounting Pronouncements Affecting the Company:
In June
2007, the Financial Accounting Standards Board ("FASB") issued Interpretation
48, "Accounting for Income Tax Uncertainties" ("FIN 48"). FIN 48 defines the
threshold for recognizing the benefits of tax return positions in the financial
statements as "more-likely-than-not" to be sustained by the taxing authority.
Recently issued literature also provides guidance on the derecognition,
measurement and classification of income tax uncertainties, along with any
related interest and penalties. FIN 48 also includes guidance concerning
accounting for income tax uncertainties in interim periods and increases the
level of disclosures associated with any recorded income tax uncertainties. FIN
48 is effective for fiscal years beginning after December 15,2007. The Company
expects to adopt the provisions of FIN 48 beginning in the first quarter of
2007. The Company is currently in the process of determining the impact, if any,
of adopting the provisions of FIN 48 on its financial position, results of
operations and liquidity.
In
September 2007, the FASB issued SFAS No. 157, "Fair Value Measurements," which
defines fair value, establishes a framework for measuring fair value under other
accounting pronouncements that permit or require fair value measurements,
changes the methods used to measure fair value and expands disclosures about
fair value measurements. In particular, disclosures are required to provide
information on the extent to which fair value is used to measure assets and
liabilities; the inputs used to develop measurements; and the effect of certain
of the measurements on earnings (or changes in net assets). SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. Early adoption, as of the beginning of an entity's
fiscal year, is also permitted, provided interim financial statements have not
yet been issued. The Company expects to adopt the provisions of FIN 48 beginning
in the first quarter of 2008. The Company is currently evaluating the potential
impact, if any, that the adoption of SFAS No. 157 will have on its consolidated
financial statements.
In
September 2007, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108").
SAB No. 108 provides guidance on how prior year misstatements should be
considered when quantifying misstatements in the current year financial
statements. SAB No. 108 requires registrants to quantify misstatements using
both a balance sheet and an income statement approach and evaluate whether
either approach results in quantifying a misstatement that, when all relevant
quantitative and qualitative factors are considered, is material. SAB No. 108
does not change the guidance in SAB No. 99, "Materiality," when evaluating the
materiality of misstatements.
SAB No.
108 is effective for fiscal years ending after November 15, 2007. Upon initial
application, SAB No. 108 permits a one-time cumulative effect adjustment to
beginning retained earnings. The Company adopted SAB No. 108 for the fiscal year
ended December 31, 2007. Adoption of SAB No. 108 did not have a material impact
on the consolidated financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS
159 allows entities to measure at fair value many financial instruments and
certain other assets and liabilities that are not otherwise required to be
measured at fair value. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. We have not determined what impact, if any, that adoption
will have on our results of operations, cash flows or financial
position.
ITEM 7.
FINANCIAL STATEMENTS
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
AUDITED
FINANCIAL STATEMENTS
FOR THE
YEARS ENDED DECEMBER 31, 2007 AND 2006
CONTENTS
_____________________________________________________________________________________________
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|
Report
of Independent Registered Public Accounting Firm
|
Page F-1
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Consolidated
Balance Sheets
|
F-2
|
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|
Consolidated
Statements of Operations
|
F-3
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
F-4
|
|
|
|
|
Consolidated
Statement of Stockholders’ Equity
|
F-5
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
F-6
|
MEYLER
& COMPANY, LLC
CERTIFIED
PUBLIC ACCOUNTANTS
ONE ARIN
PARK
1715
HIGHWAY 35
MIDDLETOWN,
NJ 07748
Report of
Independent Registered Public Accounting Firm
To the
Board of Directors
Australian
Forest Industries
Melbourne,
Australia
We have
audited the accompanying consolidated balance sheets of Australian Forest
Industries, Inc. and Subsidiary as of December 31, 2007 and 2006 and
the related consolidated statements of operations, stockholders’ deficit, and
cash flows for each of the years in the two-year period ended December 31, 2007.
These consolidated 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
conducted our audit 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. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal control
over financial reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Australian Forest
Industries, Inc. and Subsidiary as of December 31, 2007 and 2006, and the
results of its operations and its cash flows for each of the years in the
two-year period ended December 31, 2007, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Meyler & Company,
LLC
Middletown,
NJ
April 14,
2008
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED
BALANCE SHEETS
| ASSETS |
|
|
|
|
December 31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Net
liabilities of entities discontinued
|
|
$ |
34,412,897 |
|
|
$ |
6,834,184 |
|
|
Total
Current Liabilities
|
|
|
34,412,897 |
|
|
|
6,834,184 |
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT
|
|
|
|
|
|
|
|
|
|
Preferred
stock, par value $0.001, 5,000,000 shares
|
|
|
|
|
|
|
|
|
|
authorized,
none issued and outstanding
|
|
|
|
|
|
|
|
|
|
Common
stock, par value $0.001, 300,000,000 shares
|
|
|
|
|
|
|
|
|
|
authorized,
257,600,680 and 257,400,680 issued and
|
|
|
|
|
|
|
|
|
|
outstanding
in 2007 and 2006, respectively
|
|
|
257,600 |
|
|
|
257,600 |
|
|
Additional
paid-in capital
|
|
|
4,573,217 |
|
|
|
4,573,217 |
|
|
Accumulated
other comprehensive income
|
|
|
(1,843,600 |
) |
|
|
302,278 |
|
|
Accumulated
deficit
|
|
|
(37,400,114 |
) |
|
|
(11,967,279 |
) |
|
Total
Stockholders’ Deficit
|
|
|
(34,412,897 |
) |
|
|
(6,834,184 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Deficit
|
|
$ |
- |
|
|
$ |
- |
|
See
accompanying notes to financial statements.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
For
the Year Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
|
Loss
from discontinued operations
|
|
|
|
|
|
|
|
(Net
of income tax expense of $0)
|
|
$ |
9,792,485 |
|
|
$ |
6,232,558 |
|
|
Loss
on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|
(Net
of income tax expense of $0)
|
|
|
15,640,350 |
|
|
|
|
|
|
Total
Discontinued Operations
|
|
|
25,432,835 |
|
|
|
6,232,558 |
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$ |
(25,432,835 |
) |
|
$ |
(6,232,558 |
) |
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE (BASIC AND DILUTED)
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
|
- |
|
|
|
- |
|
|
Discontinued
operations
|
|
$ |
(0.10 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
|
|
|
257,600,680 |
|
|
|
257,400,680 |
|
See
accompanying notes to financial statements.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
December 31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
|
|
|
Loss
from discontinued operations
|
|
$ |
(25,432,835 |
) |
|
$ |
(6,232,558 |
) |
|
Increase
in net liabilities of entities discontinued
|
|
|
27,578,713 |
|
|
|
6,193,899 |
|
|
Cash
provided by (used in) discontinued operations
|
|
|
2,145,878 |
|
|
|
(38,659 |
) |
|
|
|
|
|
|
|
|
|
|
|
EFFECT
OF EXCHANGE RATE ON CASH
|
|
|
(2,145,878 |
) |
|
|
38,659 |
|
|
CASH
END OF YEAR
|
|
$ |
- |
|
|
$ |
- |
|
See
accompanying notes to financial statements.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Other
|
|
|
Total
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
|
Paid-In
|
|
|
Accumulated
|
|
|
Comprehensive
|
|
|
Stockholders’
|
|
|
|
Shares
|
Amount
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Income (loss)
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2005
|
|
|
|
|
257,400,680 |
|
|
|
257,400 |
|
|
|
4,503,417 |
|
|
|
(5,734,721 |
) |
|
|
333,619 |
|
|
|
(640,285 |
) |
|
Adjustments
from exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
rate
changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31,341 |
) |
|
|
(31,341 |
) |
|
Issuance
of shares for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.35 per share
|
|
|
|
|
200,000 |
|
|
|
200 |
|
|
|
69,800 |
|
|
|
|
|
|
|
|
|
|
|
70,000 |
|
|
Net
loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,232,558 |
) |
|
|
|
|
|
|
(6,232,558 |
) |
|
Balance,
December 31, 2006
|
|
|
|
|
257,600,680 |
|
|
|
257,600 |
|
|
|
4,573,217 |
|
|
|
(11,967,279 |
) |
|
|
302,278 |
|
|
|
(6,834,184 |
) |
|
Adjustments
from exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
rate
changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,145,878 |
) |
|
|
(2,145,878 |
) |
|
Net
loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(25,432,835 |
) |
|
|
|
|
|
|
(25,432,835 |
) |
|
Balance,
December 31, 2007
|
|
|
|
|
257,600,680 |
|
|
$ |
257,600 |
|
|
$ |
4,573,217 |
|
|
$ |
(37,400,114 |
) |
|
$ |
(1,843,600 |
) |
|
$ |
(34,412,897 |
) |
See
accompanying notes to financial statements.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007
NOTE A
- - BASIS OF PRESENTATION AND NATURE OF BUSINESS
Nature of
Business
Australian
Forest Industries (“the Company”), through its wholly owned subsidiary
Integrated Forest Products Pty Ltd (“Integrated”), previously operated a saw
mill in Australia which cut pine timber into building products to supply the
commercial and residential industry along the eastern coast of Australia. In
July 2007, its wholly owned subsidiary in Australia went into bankruptcy and has
formerly discontinued its operations.
Going Concern and
Liquidation
As shown
in the accompanying consolidated financial statements, the Company incurred a
net loss of $25,432,835 in 2007 and had an accumulated deficit of $37,400,114 at
December 31, 2007. Management plans to dissolve the business and
liquidate the liabilities. It also plans to spin out the bankrupt
subsidiary and look for a merger candidate for the public
shell. The Company’s wholly owned subsidiary is in bankruptcy
under Australian laws. The accompanying consolidated financial statements and
discontinued operations of the Australian subsidiary have been prepared on a
liquidation basis.
NOTE B –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Foreign Currency
Translation
For 2007
and 2006, the Company considered the Australian dollar to be its functional
currency. Assets and liabilities were translated into US dollars at
year-end exchange rates. Statement of operations amounts were
translated using the average rate during the year. Gains and losses
resulting from translating foreign currency financial statements were
accumulated in other comprehensive income, a separate component of stockholders’
equity.
Cash
Equivalents
For
purposes of reporting cash flows, cash equivalents include investment
instruments purchased with an original maturity of three months or
less. There were no cash equivalents in 2007 or 2006.
Inventories
Inventories
are stated at the lower of cost or market value. Cost is determined
using the first-in, first-out (FIFO) method. There was no inventory
at December 31, 2007.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007
NOTE B –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equipment and
Depreciation
Equipment
is stated at cost and is depreciated using the straight line method over the
estimated useful lives of the respective assets. Routine maintenance,
repairs and replacement costs are expensed as incurred and improvements that
extend the useful life of the assets are capitalized. When equipment
is sold or otherwise disposed of, the cost and related accumulated depreciation
are eliminated from the accounts and any resulting gain or loss is recognized in
operations.
Consolidated Financial
Statements
The
consolidated financial statements include the Company and its wholly owned
subsidiary. All significant intercompany transactions and balances
have been eliminated in consolidation.
Net Loss Per Common
Share
The
Company computes per share amounts in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS No.
128 requires presentation of basic and diluted EPS. Basic EPS is
computed by dividing the income (loss) available to Common Stockholders by the
weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares
of Common Stock and Common Stock equivalents outstanding during the
periods.
Comprehensive Income
(Loss)
SFAS No.
130 establishes standards for the reporting and disclosure of comprehensive
income and its components to be presented in association with a company’s
financial statements. Comprehensive income is defined as the change
in a business enterprise’s equity during a period arising from transactions,
events or circumstances relating to non-owner sources, such as foreign currency
translation adjustments and unrealized gains or losses on available-for-sale
securities. It includes all changes in equity during a period except
those resulting from investments by or distributions to
owners. Comprehensive income is accumulated in accumulated other
comprehensive income (loss), a separate component of stockholders’
deficit.
Stock Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with the Emergency Issues Task Force (“EITF”)
96-18, the measurement date of shares issued for service is the date at which
the counterpart’s performance is complete.
Fair Values of Financial
Instruments
The
Company uses financial instruments in the normal course of
business. The carrying values of cash, accounts receivable, bank
overdraft, accounts payable and accrued expenses approximate their fair value
due to the short-term maturities of these assets and liabilities. The
carrying values of loans payable approximate their fair value based upon
management’s estimates using the best available information.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007
NOTE B –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Allowance for Doubtful
Accounts
The
allowance for doubtful accounts represents management’s estimate of the amount
of probable credit losses in accounts receivable, based upon experience and a
review of past due balances.
Revenue
Recognition
The
Company was in the business of producing lumber for the building
industry. In this connection, it receives orders from distributors
and lumber yards throughout Australia. The Company ships its finished
products FOB shipping point and title passes at that point. The
Company also assures itself that there are valid sales arrangements, sales
prices are fixed and determinable, and that collectibility is reasonably
assured.
Recent Accounting
Pronouncements
In February 2007, the FASB issued
SFAS No. 159,
The
Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 allows entities to measure
at fair value many financial instruments and certain other assets and
liabilities that are not otherwise required to be measured at fair value.
SFAS 159 is effective for fiscal years beginning after November 15,
2007. We have not determined what impact, if any, that adoption will have on our
results of operations, cash flows or financial
position.
In December 2007, the FASB issued SFAS
NO. 141R, Business
Combinations. This standard
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the
goodwill acquired. This statement also establishes disclosure
requirements which will enable users to evaluate the nature and financial
effects of the business combination. SFAS No. 141R is effective for
us for acquisitions made after November 30, 2009. The company is
currently evaluating the potential impact, if any, that the adoption of SFAS No.
141R will have on its consolidated financial
statements.
Recent Accounting
Pronouncements (Continued)
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements. This standard outlines the
accounting and reporting for ownership interest in a subsidiary held by parties
other than the parent. SFAS No. 160 is effective for our first
quarter of 2010. The Company is currently evaluating the potential
impact, if any, that the adoption of SFAS No. 160 will have on its consolidated
financial statements.
NOTE
C - VARIABLE INTEREST ENTITIES
The
Company accounts for variable interest entities (“VIE’s”) under FIN 46R. FIN 46R
provides general guidance as to the definition of a variable interest entity and
requires it to be consolidated if a party with an ownership, contractual or
other financial interest, absorbs the majority of the VIE’s expected losses, or
is entitled to receive a majority of the residual returns, or both. A
variable interest holder that consolidates the VIE is the primary beneficiary
and is required to consolidate the VIE’s assets, liabilities and noncontrolling
interests at fair value at the date the interest holder first becomes the
primary beneficiary of the VIE.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007
NOTE
C - VARIABLE INTEREST ENTITIES (CONTINUED)
The
Company concluded that Timbermans Group Pty. Ltd. was deemed to be a VIE under
FIN 46R and accordingly it has been consolidated in the accompanying financial
statements. Timbermans Group, a holding company which acquired the
Company through an exchange agreement, became the majority shareholder of
Australian Forest Industries by investing $5,307,400 in the Company which was
borrowed from National Australia Bank. Timbermans Group Pty. Ltd. is also in
bankruptcy under Australian laws.
NOTE D -
NET LIABILITIES OF DISCONTINUED ENTITIES
The
following represents the net liabilities of entities discontinued at December
31, 2007:
|
Cash
|
|
$ |
1,922,008 |
|
|
Property
and equipment
|
|
|
3,547,356 |
|
|
Bank
overdrafts
|
|
|
(4,400,360 |
) |
|
National
Bank of Australia - commercial loan
|
|
|
(6,273,931 |
) |
|
National
Bank of Australia - capitalized lease loan
|
|
|
(9,867,459 |
) |
|
Accounts
payable
|
|
|
(7,531,841 |
) |
|
Accrued
goods and service tax
|
|
|
(1,041,966 |
) |
|
Related
party loan
|
|
|
(8,508,300 |
) |
|
Accrued
taxes and benefits
|
|
|
(2,258,404 |
) |
|
|
|
$ |
(34,412,897 |
) |
The
following is supplemental information on the major categories listed
above:
Property and
Equipment
The
Company has entered into a contract to sell its land and buildings for
$9,556,357 and all of its manufacturing equipment for
$964,403. Accordingly, the manufacturing equipment has been written
down to the net contract price. No write down was
recorded for the land and buildings since the contract price is
substantially greater than the carrying value recorded on the books and records
of the Company.
Bank
Overdraft
The
Company has an overdraft facility with the National Bank of Australia in the
amount of $4,400,360 at the Australian base rate plus 1.80%
annually. The facility is secured by the assets of the Company and
Timbermans Group Pty. Ltd., and personal guarantees of the principal Officers
and Directors of the Company. The notes currently bear interest at
the rate of 11.9% per annum with a default rate of 18.4% per
annum. The facility is currently due and is in default.
National Bank of Australia -
Commercial Loan
In
2006, the Timbermans Group Pty. Ltd. obtained a credit facility of $6,273,931 to
acquire a majority interest in Australian Forest Industries. The
credit facility is secured by the assets of Australian Forest Industries,
Timbermans Group Pty. Ltd., the personal guarantees of the principal Officers
and Directors of Australian Forest Industries and Timbermans Group Pty. Ltd., as
well as personal properties of certain principal Officers and
Directors. The loan bears interest at the rate of 6.2% on $2,880,000
and a floating rate on the balance of the loan.
AUSTRALIAN
FOREST INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2007
NOTE D -
NET LIABILITIES OF DISCONTINUED ENTITIES (CONTINUED)
National Bank of Australia -
Capitalized Lease
The
Company has obtained various pieces of equipment under capital leases
aggregating $9,867,459. This equipment had been originally
recorded under property and equipment and has been written down to the sales
contract value described in the Property and Equipment note. The
loans are secured by the equipment and bears interest at 8% per
annum. The loans are currently in default..
Related Party
Loan
Included
in the related party debt is a loan to Timberman’s from Oz Investmentcorp Pty.
Ltd. (“Oz”)In the amount of $2,103,068, which bears interest at 7.5% per
annum. The loan is in default. The loan is convertible
into Timberman’s shares at a conversion price that will give Oz a proportionate
share of the total issued shares of Timbermans Group (See also Note G -
Litigation.)
At
December 31, 2007 and 2006, the Company was indebted to the shareholders of
Timbermans for $6,405,232. The loans are non interest bearing,
are unsecured and have no specific repayment date. This indebtedness
is the net result of transactions between the Company and
Timbermans.
NOTE E -
INCOME TAXES
The
Company has adopted Financial Accounting Statement SFAS No. 109, Accounting for
Income Taxes. Under this method, the Company recognizes a deferred
tax liability or asset for temporary differences between the tax basis of an
asset or liability and the related amount reported on the financial
statements. The principal types of differences, which are measured at
current tax rates, are net operating loss carry forwards. At December 31, 2007
and 2006, these differences resulted in a deferred tax asset of approximately
$11,200,000 and $3,590,100. SFAS No. 109 requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred tax
assets. Since realization is not assured,
the Company has recorded a valuation allowance for the entire deferred tax asset, and the accompanying financial
statements do not reflect any net asset for deferred taxes at December 31, 2007
or 2006.
The
Company’s net operating loss carry forwards amounted to approximately
$37,400,000 and $11,967,000 at December 31, 2007 and 2006, which have unlimited
expiration.
NOTE F -
STOCKHOLDERS’ DEFICIT
In
connection with the Reverse Merger on September 1, 2006, the Company issued
17,000,000 shares to a consultant. The shares were valued at $0.015
per share which was the average trading price for the third
quarter.
During
the year ended December 31, 2007, the Company issued 200,000 shares at $0.35
which was recorded as stock based compensation of $70,000.
NOTE G –
LITIGATION
Oz has
initiated a letter of demand for the $2,103,068 due from the Timbermans Group
for full payment of funds lent to the Timbermans Group. The Company
is currently negotiating with Oz and has agreed to provide additional
collateral.
ITEM
8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Through
the September 30, 2004 reporting period, our accountants were Michael Johnson
& Co., LLC. In January 2005, we changed accountants to Meyler & Company
LLC, independent certified public accountants. At no time has there been any
disagreement with such accountants regarding any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or
procedure.
ITEM
8A. DISCLOSURE CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures.
As of the
end of the period covering this Form 10-KSB, we evaluated the effectiveness of
the design and operation of our "disclosure controls and procedures". The
Company’s President conducted this evaluation by himself.
(i)
Definition of Disclosure Controls and Procedures.
Disclosure
controls and procedures are controls and other procedures that are designed with
the objective of ensuring that information required to be disclosed in our
periodic reports filed under the Exchange Act, such as this report,
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. As defined by the SEC, such disclosure
controls and procedures are also designed with the objective of ensuring that
such information is accumulated and communicated to our management, including
the President and Chief Financial Officer, in such a manner as to allow timely
disclosure decisions.
(ii)
Limitations on the Effectiveness of Disclosure Controls and Procedures and
Internal Controls.
The
Company recognizes that a system of disclosure controls and procedures (as well
as a system of internal controls), no matter how well conceived and operated,
cannot provide absolute assurance that the objectives of the system are met.
Further, the design of such a system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance that all control issues
have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. Additionally, controls can be
circumvented in a number of ways. Because of the inherent limitations in a
cost-effective control system, system failures may occur and not be
detected. However,
our officers and directors believe that our system of disclosure controls and
procedures provides reasonable assurance of achieving their
objectives.
(iii)
Conclusions with Respect to Our Evaluation of Disclosure Controls and
Procedures.
Our
officers and directors have concluded, based on the evaluation of these controls
and procedures, that our disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company required to
be included in our periodic SEC filings.
(b)
Changes in Internal Controls.
There
have been no changes in our internal controls over financial reporting during
the last fiscal quarter of 2005 that has materially affected or is reasonably
likely to affect the Company's internal control over financial
reporting.
ITEM
8B. OTHER INFORMATION
Not
applicable.
PART
III
ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT
OFFICERS
AND DIRECTORS
We have 4
executive officers who also serve as our board of directors. Our directors are
elected at each annual meeting of shareholders. The following individuals are
all of our executive officers and directors:
Name Age Positions
and Offices With The Company
------- ----- ---------------------------------------------------
Michael
Timms
57
Chief Executive Officer; President; Chairman of the Board
Colin
Baird
49
Chief Financial Officer; Director
Tony
Esplin 45
Executive Vice President - Marketing; Director
Roger
Timms 51 Executive
Vice President - Engineering; Director
The
following is a biographical summary of the directors and officers of the
Company:
Michael
Timms
Mr.
Michael Bruce Timms was born at 30 May 1950 in Bega, New South Wales, Australia.
He has spent over thirty years in the sawmilling industry. He has been involved
with design and construction of over seven greenfield sawmill facilities and
scores of equipment upgrades across Australia and Canada in both the Hardwood
and Softwood sectors, through his engineering business, Acora Reneco Group Pty
Ltd. Among other responsibilities he works as Chief Executive Officer and
President of the Company and is Chairman of the Board.
Colin
Baird
Mr. Colin
Baird was born at 22 June 1958 in Melbourne, Australia. He is a qualified
accountant who has operated his own practice, Colib Pty Ltd since 1987. He has
been involved in the timber industry through his association with some of his
clients since 1983. At present his practice has in excess of 500 clients. Mr.
Baird is Director of Finance of the Company.
Tony
Esplin
Mr. Tony
Esplin was born at 23 August 1962 in Melbourne, Australia. He has had twelve
years of experience in the sawmill industry covering fabrication of sawmill
equipment, project management of new sawmills through his own business, Acora
Reneco Group Pty Ltd. Over the last four years he has been involved in the on
site management of Integrated Forest Products, covering all aspects of sawmill
administration, including log procurement and product marketing. He works as
Director of Marketing & Log Procurement for the Company.
Roger
Timms
Mr. Roger
Kenneth Timms was born 24 April 1956 in Bega, New South Wales, Australia. He has
spent over twenty-five years in the sawmilling industry. He is currently
involved in the design, supply and installation of sawmill equipment in
Australia and part owns a company, Acora Reneco Group Pty Ltd, which performs
these functions. He is the Company’s Director of Engineering.
Director
Positions in Other Public Companies
No
director holds any directorship in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act. No director holds any
directorship in a company registered as an investment company under the
Investment Company Act of 1940. However, with the exception of Norman
Backman, the remaining directors have other business interest and work for the
Company on a part-time basis at the present time.
Code
of Conduct
The
Company does not have an Audit or Strategy committee. Neither does the Company
have a standing nominating committee or any committee performing a similar
function. For the above reasons, the Company has not adopted a code of
ethics.
COMPLIANCE
WITH SECTION 16(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Section
16(a) of the Securities Exchange Act of 1934 requires executive officers and
directors who beneficially own more than ten percent (10%) of the Company's
Common Stock to file initial reports of ownership and reports of changes of
ownership with the Securities and Exchange Commission. Executive officers,
directors and greater than ten percent (10%) beneficial owners are required by
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
The
information required to be compliant with Section 16(a) is found herein.
However, at the present time the required individuals have not filed the
appropriate Section 16(a) forms although it has been represented to the Company
that such are being prepared and will be filed shortly after the filing of this
annual report.
ITEM
10. EXECUTIVE COMPENSATION
The table
below sets forth all annual and long-term compensation paid by the Company
through the latest practicable date to the Chief Executive Officer of the
Company and to all executive officers of the Company who received total annual
salary and bonus in excess of $100,000 for services rendered in all capacities
to the Company and its subsidiaries during the fiscal years ended December 31,
2006 and 2007.
Summary Compensation
Table
|
|
|
|
|
|
|
Long-Term
Compensation
Awards
|
|
|
|
|
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
Bonus
|
|
Securities
Underlying
Options
(#) /SARS
|
|
All
Other
Compensation
|
|
Michael Timms
- -
Chairman of the Board; CEO and
President
|
|
2007
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
2006
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coin Baird - Chief Financial
Officer and Director
|
|
2007
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
2006
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tony Esplin – Executive Vice
President – Marketing; Director
|
|
2007
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
2006
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norman Backman – Chief Operating
Officer; Director (resigned)
|
|
2007
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
2006
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger Timms – Executive Vice
President – Marketing; Director
|
|
2007
|
|
0
|
|
None
|
|
None
|
|
None
|
|
|
|
2006
|
|
0
|
|
None
|
|
None
|
|
None
|
Directors'
Compensation
Other
than minimal expenses incurred for traveling to Canberra which were reimbursed
by the Company, during the fiscal year ended December 31, 2007 our Directors did
not received a fee for serving in that capacity.
Employment
Contracts
There are
no employment agreements with the executive officers at this time.
ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The
following table sets forth information regarding the beneficial ownership of the
shares of the Common Stock (the only class of
shares previously issued by the Company) at April 14, 2008
by (i) each person known by the Company to be the beneficial owner of more than
five percent (5%) of the Company’s outstanding shares of Common
Stock, (ii) each director of the Company, (iii) the
executive officers of the Company, and (iv) by all directors and executive
officers of the Company as a group. Other than the Timbermans Group
Pty Ltd, each person named in the table, has sole voting and investment power
with respect to all shares shown as beneficially owned by such person and can be
contacted at the address of the Company.
|
Title
of Class
|
Name
of Beneficial Owner
|
Shares
of Common Stock
|
|
Percent
of Class
|
|
|
|
|
|
|
|
Common
|
Timbermans
Group Pty Ltd1
|
140,000,000
|
|
54.47%
|
|
|
|
|
|
|
|
Common
|
Norman
Backman2
|
20,000,000
|
|
7.78%
|
|
Common
|
Colin
Baird3
|
20,000,000
|
|
7.78%
|
|
Common
|
Tony
Esplin4
|
20,000,000
|
|
7.78%
|
|
Common
|
Michael
Timms5
|
20,000,000
|
|
7.78%
|
|
Common
|
Roger
Timms6
|
20,000,000
|
|
7.78%
|
|
Directors
and Officers as a group
|
|
240,000,000
|
|
93.39%
|
1Timbermans
Group Pty Ltd is an Australian corporation with 5 shareholders who are the same
individuals as our officers and directors. For the purposes of aggregating the
securities ownership of officers and directors, we have included those shares
held by Timbermans Group.
2Mr.
Backman maintains his shares in his and his wife’s name
3Mr. Baird
maintains his shares in his and his wife’s name
4Mr.
Esplin maintains his shares in his and his wife’s name
5Mr.
Michael Timms maintains his shares in his and his wife’s name
6Mr. Roger
Timms maintains his shares in his and his wife’s name
ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Timbermans Group Pty Ltd owns the
majority of the shares of common stock of the Company and its shareholders are
the same individuals as our officers and directors.
ITEM
13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
Number Exhibit Description
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
|
32.2
|
Certification
of the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
(b)
Reports on Form 8-K.
On April
7, 2008, we filed a current report on Form 8-K informing the public that we will
amend our periodic report on Form 10-QSB for the three-month period ended March
31, 2005, our periodic report on Form 10-QSB for the three- and six-month
periods ended June 30, 2005 and our periodic report on Form 10-QSB for the
three- and nine-month periods ended September 30, 2005.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES
Audit Fees
For the
Company's fiscal year ended December 31, 2007, the cost for
professional services
rendered for the audit of our financial statements and the review of
the Form 10-KSB aggregated $30,700. Costs for
professional services rendered for the preparation of our Form 10-QSB filings
during 2007 aggregated $16,000.
All Other Fees
The Company did not
incur any other fees related to services rendered by our principal accountant for
the fiscal year ended December 31, 2007.
SIGNATURES
In accordance with Section 13 or 15(d)
of the Exchange Act, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AUSTRALIAN
FOREST INDUSTRIES
/s/ Michael
Timms
Name:
Michael Timms
Title:
Chief Executive Officer, President and Chairman
Date:
April 14, 2008
/s/ Colin
Baird
Name:
Colin Baird
Title:
Chief Financial Officer and Director
Date:
April 14, 2008
/s/ Roger
Timms
Name:
Roger Timms
Title:
Executive Vice President and Director
Date:
April 14, 2008