UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 2013

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period fromN/A toN/A

Commission File Number: 000-05391

METWOOD, INC.

(Name of registrant as specified in its charter)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2012
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934
For the transition period from ________ to ________
Commission file number 000-05391
METWOOD, INC.
(Exact name of registrant as specified in its charter)

Nevada83-0210365

(State or other jurisdiction IRS Employer Identification No. of incorporation or organization)

819 Naff Road Boones Mill, VA 24065

(Address of principal executive offices)

(540) 334-4294

(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

(Title of Class)

Common Stock, $.001 Par Value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.£ Yes   S No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. £ Yes   S No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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   SNo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).£Yes   SNo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ((§229.405ofthis chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K.SYes£No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  £

Non-accelerated filer  £

 
NEVADA

Accelerated filer  £

Smaller Reporting companyS

                                      83-0210365
(State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                                Identification No.)

 

819 Naff Road, Boones Mill, VA 24065
(Address of principal executive offices)
(540) 334-4294
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
$0.001 Par Value Common Voting Stock
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes  £ No   S
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes   £ No  S
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 YesS No£
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site,
if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) YesS No£
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein,  and will not 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-K or any amendment to this Form 10K YesSNo£

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and a smaller reporting company”: in Rule 12b-2 of the Exchange Act.
Large accelerated filer£       Accelerated filer£
Non-accelerated filer£ (Do not check if a smaller reporting company)         Smaller reporting companyS
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes  £  No  S
As of October 1, 2012, the aggregate market value of the 12,231,797 common shares outstanding (based upon
the average of the bid price ($.09) reported on the OTCQB Market) held by non-affiliates was $1,100,867
As of October 1, 2012, the number of shares outstanding of the registrant's common stock, $0.001 par value 
(the only class of voting stock), was 12,231,797 shares.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes£ NoS

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 last sold, or the average bid and asked price of such common equity, as of December 31, 2012, the last business day of the registrant’s most recently completed second fiscal quarter was approximately$12,152,207.

Solely for purposes of the foregoing calculation, all of the registrant’s directors and officers as of June 30, 2013, are deemed to be affiliates. This determination of affiliate status for this purpose does not reflect a determination that any persons are affiliates for any other purposes.

State the number of shares outstanding of each of the issuer’s classes of equity securities, as of the latest practicable date: As atNovember 13, 2013,there were15,221,647shares of Common Stock, $0.001 par value per share issued and outstanding and noshares ofPreferred Stockissued and outstanding.

Documents Incorporated By Reference -None

 

(1)
Table of Contents

METWOOD, INC. AND SUBSIDIARYMetwood, Inc.

FORM 10-K ANNUAL REPORT

FOR THE FISCAL YEARS ENDED JUNE 30, 2013 AND 2012

TABLE OF CONTENTS

PART I Page #
ITEM 1.BUSINESS 4
ITEM 1A.RISK FACTORS 6
ITEM 1B.UNRESOLVED STAFF COMMENTS 6
ITEM 2.PROPERTIES 8
ITEM 3.LEGAL PROCEEDINGS 8
  Page #
PART II
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES9
ITEM 6.SELECTED FINANCIAL DATA9
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 10
ITEM 8.CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 10
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 19
ITEM 9A.CONTROLS AND PROCEDURES 19
ITEM 9B.OTHER INFORMATION 19
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE. 20
ITEM 11.EXECUTIVE COMPENSATION 20
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 21
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 21
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES 22
PART IV
ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 23
SIGNATURES 24
   
 PART ICERTIFICATIONS 
   
Item 1Description of Business4-6
Item 1AExhibit 31Risk Factors7
Item 2Management certificationProperties 7
Item 3Legal Proceedings 723
   
PART II��
Exhibit 32 
Item 5Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities8
Item 7Management's Discussion and Analysis or Plan of Operation 8
Item 8Financial Statements and Supplementary Data10-15
Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure16
Item 9AControls and Procedures 18
Item 9BOther Information 18
PART III
Item 10Directors, Executive Officers and Corporate Governance 19
Item 11Executive Compensation20
Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters20
Item 13Certain Relationships and Related Transactions, and Director Independence21
Item 14Principal Accounting Fees and Services21
PART IV
Item 15Exhibits and Financial Statement Schedules 22
SignaturesSarbanes-Oxley Act23

(2)
Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, and plans and objectives of management.  Statements that are not historical in nature and which include such words as "anticipate," "estimate," "should," "expect," believe," "intend," and similar expressions are intended to identify forward-looking statements for the purpose of the safe harbor provided by Section 21E of the Exchange Act and Section 27A of the Securities Act.

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") regarding management’s plans and objectives for future operations including plans and objectives relating to our planned marketing efforts and future economic performance. The forward-looking statements and associated risks set forth in this Annual Report include or relate to, among other things, (a) our growth strategies, (b) anticipated trends in the construction industry, (c) our ability to obtain and retain sufficient capital for future operations, and (d) our anticipated needs for working capital. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors”. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in fact occur.

The forward-looking statements herein are based on current expectations that involve a number of risks and uncertainties. Such forward-looking statements are based on assumptions described herein. The assumptions are based on judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Accordingly, although we believe that the assumptions underlying the forward-looking statements are reasonable, any such assumption could prove to be inaccurate and therefore there can be no assurance that the results contemplated in forward-looking statements will be realized. In addition, as disclosed in “Risk Factors”, there are a number of other risks inherent in our business and operations, which could cause our operating results to vary markedly, and adversely from prior results or the results contemplated by the forward-looking statements. Management decisions, including budgeting, are subjective in many respects and periodic revisions must be made to reflect actual conditions and business developments, the impact of which may cause us to alter marketing, capital investment and other expenditures, which may also materially adversely affect our results of operations. In light of significant uncertainties inherent in the forward-looking information included in the report statement, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

Any statement in this report that is not a statement of an historical fact constitutes a “forward-looking statement”. Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”, “seek”, “estimate”, “internal”, and similar words, we intend to identify statements and expressions that may be forward- looking statements. We believe it is important to communicate certain of our expectations to our investors. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions that could cause our future results to differ materially from those expressed in any forward-looking statements. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements. Important factors that may cause our actual results to differ from such forward-looking statements include, but are not limited to, the risks outlined under “Risk Factors” herein. The reader is cautioned that our Company does not have a policy of updating or revising forward-looking statements and thus the reader should not assume that silence by management of our Company over time means that actual events are bearing out as estimated in such forward-looking statements.

(3)
Table of Contents

 

PART I
Item 1.  Description of Business
Business Development
The company was incorporated under the laws of the State of Wyoming on June 19, 1969.  Following an involuntary dissolution for failure to file an annual report, the company was reinstated as a Wyoming corporation on October 14, 1999.  On January 28, 2000, the company, through a majority shareholder vote, changed its domicile to Nevada through a merger with EMC Energies, Inc., a Nevada corporation.  The Plan of Merger provided for the dissenting shareholders to be paid the amount, if any, to which they would be entitled under the Wyoming Corporation Statutes with respect to the rights of dissenting shareholders.  The company also changed its par value to $.001 and the amount of authorized common stock to 100,000,000 shares.
Prior to 1990, the company was engaged in the business of exploring for and producing oil and gas in the Rocky Mountain and mid-continental areas of the United States.  The company liquidated substantially all of its assets in 1990 and was dormant until June 30, 2000, when it acquired, in a stock-for-stock, tax-free exchange, all of the outstanding common stock of a privately held Virginia corporation, Metwood, Inc. ("Metwood"), which was incorporated in 1993.  See Form 8-K and attached exhibits filed August 11, 2000.  Metwood has been in the metal and metal/wood construction materials manufacturing business since 1992.  Following the acquisition, the company approved a name change from EMC Energies, Inc. to Metwood, Inc.
Effective January 1, 2002, Metwood acquired certain assets of Providence Engineering, PC ("Providence"), a professional engineering firm with customers in the same proximity as Metwood, for $350,000 and accounted for the transaction under the purchase method of accounting.  As of June 30, 2012, Providence is no longer an operating segment of the Company.  We have concluded that the majority of the engineering portion of the business can best be handled through a strategic partnership with an outside engineering firm.  We believe that continuing research and development efforts will soon enable us to meet code requirements for our products and will eliminate the need for individual engineering seals.

Metwood ("the Company," "We," "Us," "Our") provides construction-related products and engineering services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in southwestern Virginia.
Principal Products or Services and Markets
Residential builders are aware of the superiority of steel framing vs. wood framing, insofar as steel framing is lighter; stronger; termite, pest, rot and fire resistant; and dimensionally more stable in withstanding induced loads.  Although use of steel framing in residential construction has generally increased each year since 1980, many residential builders have been hesitant to utilize steel due to the need to retrain framers and subcontractors who are accustomed to a "stick-built" construction method where components are laid out and assembled with nails and screws.  The Company's founders saw the need to combine the strength and durability of steel with the convenience and familiarity of wood and wood fasteners.
Metwood manufactures light-gage steel construction materials, usually combined with wood or wood fasteners, for use in residential and commercial applications in place of more conventional wood products, which are inferior in terms of strength and durability.  The steel and steel/wood products allow structures to be built with increased load strength and structural integrity and fewer support beams or support configurations, thereby allowing for structural designs that are not possible with wood-only products.
Metwood's primary products and services are:
· TUFFBEAM - internally reinforced cold-formed steel beam
· TUFFJOIST - internally reinforced cold-formed steel joist
    ·  TNT FLOOR SYSTEM - combinations of TUFFBEAM, NUJOIST and TUFFJOIST 
             are utilized to make up a complete floor system
    ·  TUFFDECK - concrete deck systems
    ·  RIMBEAM - internally reinforced CFS load distribution member
    ·  NUJOIST - Metwood is a national distributor for NUJOIST floor joist system by Nuconsteel
    ·  NUFRAME 3.5 & 5.5 - a fully proprietary panelized load bearing and non-load bearing
             CFS wall framing solution
    ·  NUTRUSS 2.0 - a proprietary roof and floor truss system
    ·  NUTRUSS - CFS truss system
    ·  Aegis - Metwood is a distributor of Aegis Metal Framing's cold-formed steel trusses
    ·  Trimmable square columns
    ·  Joist reinforcers
    ·  Engineering, design and custom building services
Metwood is performing ongoing product research and development.  Through a strategic partnership with an outside engineering firm, Metwood is able to offer its customers civil engineering capabilities which include rezoning and special use submissions; erosion and sediment control and storm-water management design; residential, commercial, and religious facility site development design; and utility design, including water, sewer and onsite treatment systems. 

We also perform a variety of structural design and analysis work, successfully providing solutions for many projects, including retaining walls, residential framing, commercial building framing, light-gage steel fabrication drawings, metal building retrofits and additions, mezzanines, and seismic anchors and restraints.
The Company has designed numerous foundations for a variety of structures.  Our foundation design expertise includes metal building foundations, traditional building construction foundations, atypical foundations for residential structures, tower foundations, and sign foundations for a variety of uses and applications.

 

PART I

ITEM 1. Description of Business

The Company was incorporated under the laws of the State of Wyoming on June 19, 1969. On January 28, 2000, the Company, through a majority shareholder vote, changed its domicile to Nevada through a merger with EMC Energies, Inc., a Nevada corporation. The Plan of Merger provided for the dissenting shareholders to be paid the amount, if any, to which they would be entitled under the Wyoming Corporation Statutes with respect to the rights of dissenting shareholders. The Company also changed its par value to $.001 and the amount of authorized common stock to 100,000,000 shares.

Prior to 1990, the Company was engaged in the business of exploring for and producing oil and gas in the Rocky Mountain and mid-continental areas of the United States. The company liquidated substantially all of its assets in 1990 and was dormant until June 30, 2000, when it acquired, in a stock-for-stock, tax-free exchange, all of the outstanding common stock of a privately held Virginia corporation, Metwood, Inc. ("Metwood"), which was incorporated in 1993. Metwood has been in the metal and metal/wood construction materials manufacturing business since 1992. Following the acquisition, the Company approved a name change from EMC Energies, Inc. to Metwood, Inc.

Effective January 1, 2002, Metwood acquired certain assets of Providence Engineering, PC ("Providence"), a professional engineering firm with customers in the same proximity as Metwood, for $350,000 and accounted for the transaction under the purchase method of accounting. As of June 30, 2012, Providence was no longer an operating segment of the Company. A decision was made that the majority of the engineering portion of the business could best be handled through a strategic partnership with an outside engineering firm. We believe that continuing research and development efforts will soon enable us to meet code requirements for our products and will eliminate the need for individual engineering seals.

Metwood (“Metwood”, "the Company," "We," "Us," "Our") provides construction-related products and engineering services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in southwestern Virginia.

Our principal and administrative offices are located at 819 Naff Road, Boones Mill, Virginia 24065. Our telephone number is 540-334-4294.

Principal Products or Services and Markets

Residential builders are aware of the superiority of steel framing vs. wood framing, insofar as steel framing is lighter; stronger; termite, pest, rot and fire resistant; and dimensionally more stable in withstanding induced loads. Although use of steel framing in residential construction has generally increased each year since 1980, many residential builders have been hesitant to utilize steel due to the need to retrain framers and subcontractors who are accustomed to a "stick-built" construction method where components are laid out and assembled with nails and screws. The Company's founders saw the need to combine the strength and durability of steel with the convenience and familiarity of wood and wood fasteners.

Metwood manufactures light-gage steel construction materials, usually combined with wood or wood fasteners, for use in residential and commercial applications in place of more conventional wood products, which are inferior in terms of strength and durability. The steel and steel/wood products allow structures to be built with increased load strength and structural integrity and fewer support beams or support configurations, thereby allowing for structural designs that are not possible with wood-only products.

Products

We design, develop, manufacture, market, sell, and support a wide range of products and services. Our primary products are:

• TUFF BEAM -Internally reinforced Cold Formed Steel beam

• TUFF JOIST – Cold Formed Steel floor joist system

• TUFF JOIST+ - Internally reinforced cold-formed steel joist

• TUFF FLOOR SYSTEM - Combinations of TUFF BEAM, TUFF JOIST and TUFF JOIST+ are utilized to make up a complete floor system

• TUFFDECK - Concrete deck systems

• RIMBEAM - Internally reinforced CFS load distribution member

• TUFF FRAME 3.5 & 5.5 - A fully proprietary panelized load bearing and non-load bearing CFS wall framing solution

• TUFF TRUSS - A proprietary roof and floor truss system

• Aegis - Metwood is a distributor of Aegis Metal Framing's cold-formed steel trusses Sure-Spantm

• Trimmable square columns

• Joist reinforcers

• Engineering, design and custom building services

Services

Our primary services are:

Metwood is performing ongoing product research and development. Through a strategic partnership with an outside engineering firm, Metwood is able to offer its customers civil engineering capabilities which include rezoning and special use submissions; erosion and sediment control and storm-water management design; residential, commercial, and religious facility site development design; and utility design, including water, sewer and onsite treatment systems.

We also perform a variety of structural design and analysis work, successfully providing solutions for many projects, including retaining walls, residential framing, commercial building framing, light-gage steel fabrication drawings, metal building retrofits and additions, mezzanines, and seismic anchors and restraints.

The Company has designed numerous foundations for a variety of structures. Our foundation design expertise includes metal building foundations, traditional building construction foundations, atypical foundations for residential structures, tower foundations, and sign foundations for a variety of uses and applications.

We have also designed and drafted full building plans for several applications. When subcontracting for local companies, we have the ability, in partnership with our outside engineering firm, to provide basic architectural, mechanical, electrical, and detailed civil and structural design services for these facilities.

We have reviewed designs by manufacturers for a variety of structures and structural components, including retaining walls, radio towers, tower foundations, sign foundations, timber trusses, light-gage steel trusses, and light-gage steel beams. This service enables clients to take generic designs and have them certified and approved for construction in the desired locality.

(4)
Table of Contents

 

We have also designed and drafted full building plans for several applications.  When subcontracting for local companies, we have the ability, in partnership with our outside engineering firm, to provide basic architectural, mechanical, electrical, and detailed civil and structural design services for these facilities.
We have reviewed designs by manufacturers for a variety of structures and structural components, including retaining walls, radio towers, tower foundations, sign foundations, timber trusses, light-gage steel trusses, and light-gage steel beams.  This service enables clients to take generic designs and have them certified and approved for construction in the desired locality.
Distribution Methods of Products and Services
Our sales are primarily wholesale, directly to lumberyards, home improvement stores, hardware stores, and plumbing and electrical suppliers in Virginia and North Carolina.  Metwood relies primarily on its own sales force to generate sales; additionally, however, the Company has distributors in Virginia, New York, Oklahoma, Arizona and Colorado and also utilizes the salespeople of wholesale yards stocking the Company's products as an additional sales force.  We are an authorized vendor for Lowe's, Home Depot, 84 Lumber, Stock Building Supply, ProBuild, and many more.  We have several stocking dealers of our square columns and reinforcing products.  We will sell directly to contractors in areas where we do not have a dealer, but with our national dealer relationships,  we typically  have a dealer to use.   Metwood  intends to continue expanding  the wholesale marketing of its unique products to retailers, to increase dealer sales, and to license the Company's technology and products to increase its distribution outside of Virginia, North Carolina and the South.
Status of Publicly Announced New Products or Services
Metwood has become a fabricator of the Aegis steel truss system and is a supplier of their products to both residential and commercial customers.

Distribution Methods of Products and Services

Seasonality of Market
Our sales are subject to seasonal impacts, as our products are used in residential and commercial construction projects which tend to be at peak levels in Virginia and North Carolina between the months of March and October.  Accordingly, our sales are typically greater in our fourth and first fiscal quarters.  We build an inventory of our products throughout the winter and spring to support our sales season.  Due to the seasonality of our local market, we are continuing our efforts to expand into markets that are not so seasonally impacted.  We have shipped projects to Florida, Georgia, South Carolina, Arizona, Washington, and more.  These markets have some seasonality, but increased exposure in these markets will help maintain stronger sales year round.
Competition
Nationally, there are over one hundred manufacturers of the types of products produced by the Company.  However, the majority of these manufacturers are using wood-only products or products without metal reinforcement.  Metwood has identified only one other manufacturer in the United States that manufactures a wood-metal floor truss similar to ours.  However, we have often found that our products are the only ones that will work within many customers' design specs. 
Sources and Availability of Raw Materials and the Names of Principal Suppliers
All of the raw materials we use are readily available on the market from numerous suppliers.  The light-gage metal used by the Company is supplied primarily by Telling Industries, Nuconsteel, New Millenium, Allied Tube & Conduit, and Vulcraft.  Our main source of lumber is BlueLinx.  Re-Steel, Nucor and Gerdau Amersteel provide the majority of our rebar.  Because of the number of suppliers available to us, our decisions in purchasing materials are dictated primarily by price and secondarily by availability.  We do not anticipate a lack of supply to affect our production; however, a shortage might cause us to pass on higher materials prices to our buyers.
Dependence on One or a Few Major Customers
For the fiscal years ending June 30, 2012 and 2011, no customer accounted for 10% or more of total sales.  

Our sales are primarily wholesale, directly to lumberyards, home improvement stores, hardware stores, and plumbing and electrical suppliers in Virginia and North Carolina. Metwood relies primarily on its own sales force to generate sales; additionally, however, the Company has distributors in Virginia, New York, Oklahoma, Arizona and Colorado and also utilizes the salespeople of wholesale yards stocking the Company's products as an additional sales force.

We are an authorized vendor for Lowe's, Home Depot, 84 Lumber, Stock Building Supply, ProBuild, and many more. We have several stocking dealers of our square columns and reinforcing products. We will sell directly to contractors in areas where we do not have a dealer, but with our national dealer relationships, we typically have a dealer to use.

Future Outlook

Metwood intends to continue expanding the wholesale marketing of its unique products to retailers, to increase dealer sales, and to license the Company's technology and products to increase its distribution outside of Virginia, North Carolina and the South.

New Products and Services

Metwood has become a fabricator of the Aegis steel truss system and is a supplier of their products to both residential and commercial customers.

Seasonality of Market

Our sales are subject to seasonal impacts, as our products are used in residential and commercial construction projects which tend to be at peak levels in Virginia and North Carolina between the months of March and October. Accordingly, our sales are typically greater in our fourth and first fiscal quarters. We build an inventory of our products throughout the winter and spring to support our sales season. Due to the seasonality of our local market, we are continuing our efforts to expand into markets that are not so seasonally impacted. We have shipped projects to Florida, Georgia, South Carolina, Arizona, Washington, and more. These markets have some seasonality, but increased exposure in these markets will help maintain stronger sales year round.

Competition

Nationally, there are over one hundred manufacturers of the types of products produced by the Company. However, the majority of these manufacturers are using wood-only products or products without metal reinforcement. Metwood has identified only one other manufacturer in the United States that manufactures a wood-metal floor truss similar to ours. However, we have often found that our products are the only ones that will work within many customers' design specs.

Sources and Availability of Raw Materials

All of the raw materials we use are readily available on the market from numerous suppliers. Because of the number of suppliers available to us, our decisions in purchasing materials are dictated primarily by price and secondarily by availability. We do not anticipate a lack of supply to affect our production; however, a shortage might cause us to pass on higher materials prices to our buyers.

Principal Suppliers

The Cold Formed Steel materials used by the company are supplied primarily by Telling Industries, New Millenium, Allied Tube & Conduit, and Vulcraft. Our main source of lumber is BlueLinx. Adelphia Metals, Re-Steel, Nucor and Gerdau Amersteel provide the majority of our rebar.

Major Customers and Percentage of Sales

For the fiscal years ending June 30, 2013 and 2012, no customer accounted for 10% or more of our total sales.

Patents

At June 30, 2013, we held a portfolio of nine (9) U.S. patents that included the following:

U.S. Patent Nos. 5,519,977 and 7,347,031, "Joist Reinforcing Bracket," a bracket that reinforces wooden joists with a hole for the passage of a utility conduit. The Company refers to this as its floor joist patch kit.

U.S. Patent No. 5,625,997, "Composite Beam," a composite beam that includes an elongated metal shell and a pierceable insert for receiving nails, screws or other penetrating fasteners.

U.S. Patent No. 5,832,691, a continuation in part of U.S. Patent No. 5,625,997, "Composite Beam," a composite beam that includes an elongated metal shell and a pierceable insert for receiving nails, screws or other penetrating fasteners.

U.S. Patent No. 5,921,053, "Internally Reinforced Girder with Pierceable Nonmetal Components," a girder that includes a pair of "c"-shaped members secured together so as to form a hollow box which permits the girder to be secured within a building structure with conventional fasteners such as nails, screws and staples.

U.S. Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications of Metwood's Joist Reinforcing Bracket, which will be used for repairs of wood I-joists.

Each of the above indicated patents were originally issued to the inventors and Company founders, Robert Callahan and Ronald B. Shiflett, who licensed these patents to the Company.

Need for Government Approval of Principal Products

Our products must either be sold with an engineer's seal or applicable building code approval. Currently, we are seeking International Code Council ("ICC") code approval on our TUFFBEAMS. Once that approval is obtained, our products can be used in all fifty states, which will eliminate the need for an engineer's seal on individual products. To date, the Company's 2x10 floor joist reinforcer has received both Bureau Officials Code Association approval (2001) and ICC approval (2004).

Sustainability and Effects of Compliance with Environmental Laws

Environmental stewardship and social responsibility are both integral parts of how we manage our business, and complement our focus on business efficiencies and customer satisfaction. We do not incur any costs to comply with environmental laws. We are an environmentally friendly business in that our products are fabricated from recycled steel.

Employees

As of the end of the fiscal year ending June 30, 2013, the Company had 14 employees. Each management hire has been carefully selected to address immediate needs in particular functional areas, but also with consideration of the Company’s future needs during a period of expected rapid growth and expansion. Value is placed not only on outstanding credentials in specific areas of functional expertise, but also on cross-functionality, collegiality, a strong knowledge of content acquisition and distribution, along with hands-on experience in scaling operations from initial beta and development stage through successful commercial deployment. We believe that the relationship with our employees is excellent. We regularly use independent consultants and outside contractors to perform various professional services, particularly in the areas of engineering, field, on-site production services, and certain accounting functions.

Executive Officers of Metwood Inc.

Our executive officers are appointed by, and serve at the pleasure of, our Board of Directors. Set forth below is biographical information about each of the persons who were serving as our executive officers as of June 30, 2013:

Robert M. Callahan - President and Chief Executive Officer

Mr. Callahan has been involved in the building industry for over thirty years. He is well recognized in southwestern Virginia as an innovator in the uses of passive solar design and wood/metal products in custom home building. Along with Mr. Ronald Shiflett, he formed Metwood, Inc. in 1993 to bring light-gage construction, used in commercial building for years, into common use in residential construction.

Shawn A. Callahan – Vice President and Chief Financial Officer

Since starting with Metwood, Inc., in May 1996, Mr. Callahan has played a major role in the restructuring of the Company, increasing production, improving efficiency, and developing computer aids for the Company.

Shawn received a B.S. in Computer Science and Mathematics from the Virginia Military Institute, and a MBA in Accounting from the University of Phoenix.

 

(5)
Table of Contents

Patents
The Company has nine U.S. Patents:
     U.S. Patent Nos. 5,519,977 and 7,347,031, "Joist Reinforcing Bracket," a bracket that reinforces wooden joists with a hole for the passage of a utility conduit.  The Company refers to this as its floor joist patch kit.
     U.S. Patent No. 5,625,997, "Composite Beam," a composite beam that includes an elongated metal shell and a pierceable insert for receiving nails, screws or other penetrating fasteners.
     U.S. Patent No. 5,832,691, a continuation in part of U.S. Patent No. 5,625,997, "Composite Beam," a composite beam that includes an elongated metal shell and a pierceable insert for receiving nails, screws or other penetrating fasteners.

ITEM 1A - Risk Factors

     U.S. Patent No. 5,921,053, "Internally Reinforced Girder with Pierceable Nonmetal Components," a girder that includes a pair of "c"-shaped members secured together so as to form a hollow box which permits the girder to be secured within a building structure with conventional fasteners such as nails, screws and staples.
     U.S. Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications of Metwood's Joist Reinforcing Bracket, which will be used for repairs of wood I-joists.
Each of the above-mentioned patents was originally issued to the inventors and Company founders, Robert Callahan and Ronald B. Shiflett, who licensed these patents to us.
Need for Government Approval of Principal Products
Our products must either be sold with an engineer's seal or applicable building code approval.  Currently, we are seeking International Code Council ("ICC") code approval on our TUFFBEAMS.  Once that approval is obtained, our products can be used in all fifty states and will eliminate the need for an engineer's seal on individual products.  To date, the Company's 2x10 floor joist reinforcer has received both Bureau Officials Code Association approval (2001) and ICC approval (2004). 
Time Spent During the Last Two Fiscal Years on Research and Development Activities
Approximately fifteen percent of our time and resources have been spent during the last two fiscal years researching and developing our metal/wood products, new product lines, and new patents.
Costs and Effects of Compliance with Environmental Laws
We do not incur any costs to comply with environmental laws.  We are an environmentally friendly business in that our products are fabricated from recycled steel.
Number of Total Employees and Number of Full-Time Employees
We had eighteen employees at June 30, 2012, all of whom were full time.

Our business is subject to a variety of risks and uncertainties, including, but not limited to, the risks and uncertainties described below. If any of the risks  described below, or elsewhere in this report on Form 10-K, or our Company’s other filings with the Securities and Exchange Commission (the "SEC"), were to occur, our financial condition and results of operations could suffer and the trading price of our common stock could decline. Additionally, if other risks not presently known to us, or that we do not currently believe to be significant, occur or become significant, our financial condition and results of operations could suffer and the trading price of our common stock could decline.

You should carefully review the risk factors together with all other information contained in this Annual Report on Form 10-K, and in prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended. Our risk factors, including but not limited to the risk factors listed below, are as follows:

 

SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS OF OUR BUSINESS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED.

Changingeconomicconditions couldmateriallyadverselyaffectus-Ouroperations and performancedependsignificantlyonregional and national economicconditions andtheir impacton levels of spendingbyour customers and endusers. Currently, those economic conditions havedeteriorated and mayremaindepressedfor theforeseeablefuture. These changing economic conditions could have a material adverse effect ondemandforourproducts andonourfinancial condition andoperatingresults.

Currentvolatilityanddisruptioninthecapitalandcreditmarketsmay continue toexertdownwardpressureonour stockprice-Thecapitaland credit marketshave been experiencing extreme volatilityand disruption over the past year. Stock marketsin general, andourstockprice in particular, have experienced significant volatility over the past year. Our stockrecently traded at historic lows. In the future, there can be no assurance thatprice volatilityin the stock markets in general will abate or that our stockprice inparticularwill rise. Additionally, the volatility in the creditmarkets couldimpactour abilitytoaccessnewfinancing.

Wehaveahistoryofoperating lossesandmayincurfuture losses.Weincurrednetlosses of $61,291forthefiscal yearendedJune30,2013and$354,919for theyear endedJune30,2012.Our ability to generate significant revenues and maintain profitability is dependent in largepartonour ability toexpandour customerbase;increasesalesof ourproductstoexistingcustomers; manageour expense growth;enter into additional supply, licenseand collaborative arrangements; and successfully manufacture and commercialize products incorporating our technologies innew applications and innew markets.

Our common shares have been subject to penny stock regulation in the United States of America.Our common shares have been subject to the provisions of Section 15(g) and Rule 15g-9 of the (US) Securities Exchange Act of 1934, as amended (the “Exchange Act”), commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act. The Commission generally defines penny stock to be any equity security that has a market price less than US$5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; issued by a registered investment company; excluded from the definition on the basis of price (at least US$5.00 per share) or the registrant’s net tangible assets; or exempted from the definition by the Commission. If our common shares are deemed to be “penny stock”, trading in common shares will be subject to additional sales practice requirements on broker/dealers who sell penny stock to persons other than established customers and accredited investors.

Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to buy and sell our common shares.In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a client, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that client. Prior to recommending speculative low priced securities to their non-institutional clients, broker-dealers must make reasonable efforts to obtain information about the client’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some clients. FINRA requirements make it more difficult for broker-dealers to recommend that their clients buy our common shares, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

As a public company we are subject to complex legal and accounting requirements that will require us to incur significant expenses and will expose us to risk of non-compliance.As a public company, we are subject to numerous legal and accounting requirements in both Canada and the United States of America that do not apply to private companies. The cost of compliance with many of these requirements is material, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company. Our relative inexperience with these requirements may increase the cost of compliance and may also increase the risk that we will fail to comply. Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of our securities and/or governmental or private actions against us. We cannot assure you that we will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis privately held and larger public competitors.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for our management.Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team needs to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Because we are quoted on the OTC pink Sheets instead of a national securities exchange, our investors may have more difficulty selling their stock or experience negative volatility on the market price of our stock in the United States.Our common shares are quoted on the OTC Pink Sheets. The OTC Pink Sheets is marketed as an electronic exchange for high growth and early stage companies. Trades are settled and cleared in a manner similar to any NASDAQ or NYSE stock and trade reports are disseminated through Yahoo, Bloomberg, Reuters, and most other financial data providers. The OTC Pink Sheets can be significantly illiquid, in part because it does not have a national quotation system by which potential investors can follow the market price of shares except through information received and generated by a limited number of broker-dealers that make markets in particular stocks. There is a greater chance of volatility for securities that trade on the OTC Pink Sheets as compared to a national securities exchange, such as the New York Stock Exchange, the NASDAQ Stock Market or the NYSE Amex. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume, and market conditions. Investors in our common shares may experience high fluctuations in the market price and volume of the trading market for our securities. These fluctuations, when they occur, have a negative effect on the market price for our common shares. Accordingly, our shareholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our common shares improves.

The price at which you purchase our common shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you. The market price for our common shares is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price.

The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer. The volatility in our share price is attributable to a number of factors. First our common shares, at times, are thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Second, we are a speculative or “risky” investment due to our limited operating history, lack of profits to date and uncertainty of future market acceptance for our potential products. As a consequence, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our performance. We cannot make any predictions as to what the prevailing market price for our common shares will be at any time or as to what affect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

(6)
Table of Contents

Item 1A.  Risk Factors
Our business is subject to various risks, including those described below.  You should carefully consider the following risk factors and all other information contained in this Form 10-K.  If any of the following events or outcomes actually occurs, our business, operating results, and financial conditions would likely suffer.
Changing economic conditions could materially adversely affect us - Our operations and performance depend significantly on regional and national economic conditions and their impact on levels of spending by our customers and end users. Currently, those economic conditions have deteriorated and may remain depressed for the foreseeable future. These changing economic conditions could have a material adverse effect on demand for our products and on our financial condition and operating results.

Volatility in our common share price may subject us to securities litigation, thereby diverting our resources that may have a material effect on our profitability and results of operations.The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. This type of litigation could result in substantial costs and could divert management’s attention and resources.

Current volatility and disruption in the capital and credit markets may continue to exert downward pressure on our stock price - The capital and credit markets have been experiencing extreme volatility and disruption over the past year. Stock markets in general, and our stock price in particular, have experienced significant volatility over the past year. Our stock recently traded at historic lows. In the future, there can be no assurance that price volatility in the stock markets in general will abate or that our stock price in particular will rise. Additionally, the volatility in the credit markets could impact our ability to access new financing.
We have a history of operating losses and may incur future losses. We incurred net losses of $354,919 for the fiscal year ended June 30, 2012 and $86,262 for the year ended June 30, 2011. Our ability to generate significant revenues and maintain profitability is dependent in large part on our ability to expand our customer base; increase sales of our products to existing customers; manage our expense growth; enter into additional supply, license and collaborative arrangements; and successfully manufacture and commercialize products incorporating our technologies in new applications and in new markets.
Item 2. Properties
During the year ended June 30, 2005, we sold our facilities to a related party for $600,000 and subsequently leased the facilities back under a long-term lease agreement.  We now lease our facilities in Boones Mill, Virginia, which consist of corporate offices, warehouses, a garage/vehicle maintenance building, and other multi-use buildings.  The condition of these buildings is very good.
We do not invest in real estate or interests in real estate, real estate mortgages or securities of or interests in persons primarily engaged in real estate activities and therefore have no policies related to such investments.
Item 3. Legal Proceedings
We are currently the complainant in two legal proceedings seeking to recover unpaid amounts from customers.  We are not a party to any other legal proceedings, nor, to the best of our knowledge, are any such proceedings threatened or contemplated.
Item 4.  Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote during the year.

 

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) could have a material adverse effect on our business and our operating results.If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common shares.

Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, we are required to prepare assessments regarding internal controls over financial reporting. In connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover “material weaknesses” in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The PCAOB defines “significant deficiency” as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected.

In the event that a material weakness is identified, as it has been for this report, subject to expansion of the size of our Company and our finance department, we will employ qualified personnel and adopt and implement policies and procedures to address any material weaknesses that we identify. However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls over our financial process and reporting in the future.

Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we may identify or to implement new controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could adversely affect the results of the management evaluations of our internal controls. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares.

We do not intend to pay dividends.We do not anticipate paying cash dividends on our common shares in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally available to pay dividends, we may nevertheless decide, in our sole discretion, not to pay dividends. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our board of directors may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

The current financial environment may impact our business and financial condition that we cannot predict.The continued instability in the global financial system and related limitation on availability of credit may continue to have an impact on our business and our financial condition, and we may continue to face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets has been restricted as a result of the economic downturn and related financial market conditions and may be restricted in the future when we would like, or need, to raise capital. The difficult financial environment may also limit the number of prospects for potential joint venture, asset monetization or other capital raising transactions that we may pursue in the future or reduce the values we are able to realize in those transactions, making these transactions uneconomic or difficult to consummate.

We did not consummate the Global Energy Group LLC transaction. Metwood had previously entered into a Member Interests Purchase Agreement (the "Agreement") dated June 30, 2013 with Global Energy Group LLC. The Company has determined not to consummate the transaction. The discussions regarding this Agreement are ongoing and any failure of the parties to reach an accommodation may havematerial adverse effect on our financial condition or results of operations and could divert management’s attention and resources.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable

(7)
Table of Contents

 

PART II
Item 5.  Market for Common Equity and Related Stockholder Matters
Because there is no active trading market for Metwood, Inc. common stock, it is difficult to determine the market value of the stock.  Based on the recent close of our common stock at October 1, 2012 of $.09 per share (with a 52-week high of $.43), the market value of shares held by non-affiliates would be $1,100,867.  There are no preferred shares authorized.

 

Our common stock is currently listed on the OTCQB Market, the middle tier of the OTC marketplace, under the symbol "MTWD.OB." 
The following table sets forth high and low bid information for each full quarterly period within the two most recent fiscal years.  These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

ITEM 2. PROPERTIES

 

         
 Year Ended June 30, 2012  High Bid  
 First Quarter  $0.43 $0.22  
 Second Quarter $0.39 $0.20  
 Third Quarter  $0.37 $0.21  
 Fourth Quarter $0.31 $0.04  
         
 Year Ended June 30, 2011       
 First Quarter  $0.25 $0.13  
 Second Quarter $0.55 $0.11  
 Third Quarter  $0.43 $0.18  
 Fourth Quarter $0.43 $0.21  

The executive offices of the Company are located at819 Naff Road Boones Mill, Virginia 24065.

 

Holders
The approximate number of holders of record of our common stock as of August 17, 2012 was 1,112.  This number does not include an indeterminate number of stockholders whose shares are held by brokers in street name.  The number of stockholders has been substantially the same during the past ten years.
Dividends
��
We have not paid any dividends on our common stock and do not intend to pay dividends in the foreseeable future.
Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operation
Financial Condition
We anticipate that the next twelve months will be a period of continued growth as we seek to further expand our presence in new markets throughout the United States through increased numbers of distributors, licensees and dealers.  ICC code approval is being sought for our TUFFBEAM and is expected to be obtained within the coming fiscal year.  If this approval is obtained, product marketability would be greatly enhanced and would likely lead to higher demand.  
Higher product demand would likely increase the need for more capital as inventory requirements grew, which could be met through borrowing or a stock offering.  No decision has been made at the present time, however, as to which means might be used to raise capital.

During the fiscal year ended June 30, 2005, we entered into a sales and leaseback transaction with a related party. We sold the various buildings at our corporate headquarters in Boones Mill, Virginia, which house our manufacturing plant, executive offices and other buildings for $600,000 in cash. We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014. Rent expense charged to operations for the years ended June 30, 2013 and 2012 was $81,600 and $80,600, respectively.

 

Results of Operations
        
Below are selected financial data for the years ended June 30, 2012 and 2011: 
        
    2012 2011 
     Revenues  $ 1,940,526  $ 2,212,757  
 Net loss  $  (354,919) $    (86,262) 
 Net loss per common share$        (0.03) $        (0.01) 
 Weighted average common    
    shares outstanding 12,231,797  12,231,797  
        
At June 30, 2012 and 2011:     
        
 Total assets $ 1,828,928  $ 2,185,815  
 Working capital $ 1,119,326  $ 1,250,111  
 Shareholders' equity $ 1,552,165  $ 1,907,084  
        

We now lease our facilities in Boones Mill, Virginia, which consists of our corporate offices, warehouses, a garage/vehicle maintenance building, and other multi-use buildings. The conditions of these building are very good.

 

No dividends have been declared or paid during the periods presented.
Revenues and Cost of Sales - Consolidated gross sales decreased $272,231, or 12%, for the year ended June 30, 2012 ("fiscal 2012") compared to the year ended June 30, 2011 ("fiscal 2011"). Construction sales consisted of product sales, engineering, delivery and installation fees and decreased $122,846 (6%) comparing fiscal 2012 to 2011. Engineering sales consisted of fees for engineering services and declined $149,385 (91%) comparing fiscal 2012 to 2011. This decline results from the fact that Providence is no longer an operating segment of the Company. Gross profit decreased $198,622 (22%) from fiscal 2011 to fiscal 2012, again reflecting the fact that Providence is not an active segment for us.
The sales decrease for fiscal 2012 versus 2011 continues to reflect an ongoing general downtown in the building industry. Although we have sold product in over twenty-five states, our local market is down more than 30%. Nonetheless, the commercial market has overcome some of the residential downturn. The potential for increased sales volume as the Company goes forward is enhanced by the fact that we are now an authorized fabricator for the Dynatruss light-gage steel truss system, begun in March 2008.
Cost of sales decreased $73,609 overall (6%) in fiscal 2012 compared to fiscal 2011.  On the construction side, cost of sales increased $72,375 (6%), while cost of engineering sales decreased $145,984 (88%).  The change in construction and engineering costs was proportional to the change in sales for the same period.  
Administrative expenses - These costs increased $95,164, or 9%, to $1,135,402 in fiscal 2012 from $1,040,238 in fiscal 2011. The increase resulted from impairment losses on intangible assets. Aside from that expense, administrative costs declined in all but two categories. We are invested in decreasing expenditures where possible in order to maximize our net earnings.

We do not invest in real estate or interests in real estate, real estate mortgages, or securities of or interests in persons primarily engaged in real estate activities and therefore have no policies related to such investments.

ITEM 3. LEGAL PROCEEDINGS

We are currently the complainant in one legal proceeding seeking to recover unpaid amounts from customers. We are not a party to any other legal proceedings, nor, to the best of our knowledge, are any such proceedings threatened or contemplated.There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

(8)
Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUERS PURCHASES OF EQUITY SECURITIES.

BecausethereisnoactivetradingmarketforMetwood,Inc.commonstock,itisdifficulttodetermine themarketvalueofthestock.Basedontherecentcloseofourcommon stockat July24,2013of $.68 per share (with a 52-weekhighof$1.35), the market valueof sharesheldby non-affiliates wouldbe$10,350,720.

Our common stock is currently listed on the OTCPK Market under the symbol “MTWD.PK”

The following table sets forth high and low bid information for each full quarterly period within the two most recent fiscal years. These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark down, or commission and may not necessarily represent actual transactions.

  Price Range of Common Stock
Periods  High   Low 
Fiscal Year 2013        
First Quarter (July - September 2012) $0.51  $0.04 
Second Quarter (October - December 2012) $1.35  $0.03 
Third Quarter (January - March 2013) $1.00  $0.08 
Fourth Quarter (April - June 2013) $0.45  $0.37 
         
         
Periods  High   Low 
Fiscal Year 2012        
First Quarter (July - September 2011) $0.43  $0.22 
Second Quarter (October - December 2011) $0.39  $0.20 
Third Quarter (January - March 2012) $0.37  $0.21 
Fourth Quarter (April - June 2012) $0.31  $0.04 

On June 30, 2013, the closing bid price of our common stock was $0.45.

Holders

The approximate number of holders of record of our common stock as of July 30, 2013 was 1,108. This number does not include an indeterminate number of stockholders whose shares are held by stockbrokers in brokerage accounts. The number of stockholders has been substantially the same during the past ten years.

Dividends

We have not paid any dividends on our common stock and do not intend to pay dividends in the foreseeable future.

Transfer Agent

Metwood’s Transfer Agent and Registrar for the common stock is: Colonial Stock Transfer Co, Inc., located at 66 Exchange Place, Suite 100, Salt Lake City, Utah 84111

Issuer Repurchases of Equity Securities

None

RECENT SALES OF UNREGISTERED SECURITIES

Common Stock Issued

Fiscal Year 2013 – Period April 1, 2013 through June 30, 2013

At June 30, 2013, there were no outstanding stock options or warrants.

Forward Stock Splits

There were no forward stock splits to report on for this period.

ITEM 6. Selected Financial Data

The following information has been summarized from financial information included elsewhere and should be read in conjunction with such financial statements and notes thereto.

Summary of Statements of Operations of Metwood Inc.

Other Income - Other income in fiscal 2012 was $18,876, 28% higher than fiscal 2011. The increase resulted from higher customer finance charges and gains on asset disposals.
Income Taxes - In fiscal 2012 we recorded an income tax benefitStatement of $75,098 compared to a tax benefit of $54,145 in fiscal 2011. An income tax benefit was recognized in both fiscal years because, in addition to the book loss experienced, temporary ("timing") differences between book and tax income gave rise to a higher tax loss, which will be carried forward and offset future taxable income. A deferred tax asset has been recorded to reflect the potential future benefit of such a carryforward. Since the realization of such an asset is uncertain, we have also recorded a valuation allowance to reduce this asset to its net realizable value.
Liquidity and Capital Reserves - Cash flows used for operating activies in fiscal 2012 were $96,612 versus net cash provided by operating activities of $47,395 in fiscal 2011. The decrease in cash flows from operations for fiscal 2012 was primarily attributable to increases in the net loss and in inventory. We also used $39,361 for capital improvements and purchases of fixed assets in fiscal 2012 compared to $271,362 in fiscal 2011. Property disposals increased cash provided by investing activites by $6,290 and fiscal 2012 compared to $9,100 in 2011. Financing activities in fiscal 2012 used $54,119 compared to $8,197 used in fiscal 2011. The use of funds in 2012 was from amounts repaid to a related party and full repayment of a vehicle loan, while funds used in 2011 in financing activities were from amounts repaid to a related party.
We have historically funded our cash needs through operating income and credit line draws as needed.  We will continue to rely on sales revenue as our main source of liquidity and will incur debt primarily to fund inventory purchases as sales growth produces increased product demand.  Liquidity needs that cannot be met by current sales revenue may also arise in certain unusual circumstances such as has previously occurred when rain and snow significantly slowed construction activity and resulted in a corresponding decline in demand for our products.  In those circumstances, debt may be added to meet our fixed costs and to maintain inventory in anticipation of a spurt in product demand that generally occurs once a weather-related slowdown has ended.
On a long-term basis, we also anticipate that product demand will increase considerably as we continue to expand our marketing and advertising campaign, which may include the use of television, radio, print and internet advertising.  Efforts are well underway to increase the number of out-of-state sales representatives/brokers who will market our products throughout the country.  As sales increase, we can add a second shift to meet the additional product demand without having to use funds to expand our production facilities.  If additional cash becomes necessary to fund our growth, we may raise this capital through an additional follow-on stock offering rather than taking on more debt.  However, there can be no assurance that we will be able to obtain additional equity or debt financing in the future.  If we are unable to raise additional capital as needed, our growth potential will be adversely affected, and we would have to significantly modify our plans.Operations Data
   For the Year Ended
   20132012
 Revenues $2,157,379 $1,940,526
 Net loss $(327,504)$(354,919)
 Net loss per common share $(0.02)$(0.03)
     
   Weighted average common shares outstanding  15,221,647 12,231,797
      
    For the Year Ended
    2013 2012
 Total assets $1,944,206 $2,185,815
 Working capital $1,112,947 $1,250,111
 Shareholders' equity $1,583,156 $1,907,084

Nodividendshavebeendeclaredorpaidduring theperiodspresented.

RevenuesandCostofSales-Consolidatedgrosssalesincreased$216,853,or11%,forthe yearended June30,2013("fiscal2013") compared to theyear ended June30,2012("fiscal 2012"). Construction sales consisted of product sales, engineering, delivery and installationfees and increased$231,709 (12%) comparingfiscal2013 to2012. Engineeringsales consistedof feesfor engineeringservices and declined 100% comparingfiscal2013 to2012. This decline resulted from thefact thatProvidence isno longer an operating segment ofthe Company. Grossprofit increased$111,708(16%)fromfiscal2012 tofiscal 2013.

Our Company'ssalesincreaseforfiscal2013versus2012reflectsacontinuing efforttomarketour productscombinedwithaslightupturn inthebuilding industry. Additionally, the commercial market has overcome some of the residentialdownturn. The potential for increased sales volume as the Company goes forward is enhanced by thefact that we arenow an authorized fabricator for the Aegis light-gage steel truss system.

Costofsalesincreased$105,145overall(8%)infiscal2013 comparedtofiscal2012,representing an increasethatwasproportionaltothechangein salesforthesameperiod.

Administrative expenses-These costsdecreased$253,059fromfiscal2012tofiscal2013. The decreaseresultedfromthefactthattherewerenoimpairmentlossesonintangible assetsin fiscal2013. We are invested indecreasing expenditureswhere possible inorder tomaximizeournet earnings.

OtherIncome-Otherincomeinfiscal2013was$9,967,47%lowerthanfiscal2012. Thedecrease resultedprimarilyfromlowercustomerfinancechargeincome.

IncomeTaxes-Infiscal2013werecordedanincometaxbenefitof$77,150 comparedtoataxbenefit of$75,098 infiscal2012. An incometaxbenefit was recognized in bothfiscalyearsbecause, in addition to the book loss experienced, temporary ("timing") differencesbetweenbook and tax income gave rise toahighertax loss, which will be carriedforwardandoffsetfuture taxable income. A deferred taxassethas been recorded toreflect thepotentialfuturebenefitofsuch acarryforward. Since the realization of such anasset is uncertain, we have also recorded a valuation allowance to reducethisassettoitsnetrealizablevalue.

Liquidity andCapitalReserves-Cashflowsusedforoperatingactivitiesinfiscal2013were$220,013 versusnetcashusedforoperatingactivitiesof$96,612 infiscal2012. Thedecreasein cashflows from operations for fiscal2013 wasprimarilyattributable todecreases in thenet lossand in inventory and to no impairmentloss in fiscal2013. The issuanceof common stock provided$358,495from investing activities in fiscal 2013, and we also used $29,567 for capital improvements andpurchasesoffixed assetsin fiscal 2013 compared to$39,361 infiscal2012. Property disposals increased cashprovided by investing activitiesby $19,800 infiscal2013 compared to$68,290 in2012. Financing activities in fiscal 2013 used $12,711 compared to$54,119used infiscal2012.Theuseoffunds in2013 wasfrom amounts repaidtoarelatedparty,whilefundsused in2012 infinancing activitieswerefromamounts repaidtoarelatedpartyandfullrepaymentof avehicleloan.

Wehavehistoricallyfundedourcashneedsthroughoperating incomeandcreditline drawsasneeded. Wewillcontinuetorelyonsalesrevenueasourmainsourceofliquidityandwillincurdebtprimarily tofundinventorypurchasesassalesgrowthproduces increasedproduct demand.Liquidityneedsthat cannotbemetby current sales revenue may also arisein certain unusual circumstances such as has previously occurred when rain and snow significantlyslowed construction activity and resulted in a correspondingdeclineindemandforourproducts. Inthosecircumstances,debt may beaddedtomeet ourfixed costs and to maintain inventory in anticipationof a spurt in product demand that generally occurs once a weather-related slowdown has ended.

Onalong-termbasis,wealsoanticipatethatproductdemandwillincreaseconsiderablyaswecontinue toexpandourmarketingandadvertisingcampaign,whichmayincludetheuse oftelevision,radio, print andinternetadvertising. Efforts are well underway toincrease the number of out-of-state sales representatives/brokers who will marketour productsthroughoutthecountry. As salesincrease, we can add a second shift to meet the additional productdemand without having to use funds to expand our productionfacilities. If additional cash becomes necessary to fund our growth, we may raise this capitalthroughanadditionalfollow-on stockofferingratherthantakingonmoredebt. However,there can be no assurance that we will be able to obtain additional equity or debt financing in the future. If weareunable toraise additionalcapitalasneeded,ourgrowthpotentialwillbeadverselyaffected,and we wouldhave to significantly modify ourplans.

 

(9)
Table of Contents

Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Metwood, Inc.
We have audited the accompanying consolidated balance sheets of Metwood, Inc. (a Nevada corporation) and subsidiary as of June 30, 2012 and 2011, and the related consolidated statements of income, stockholders' equity, and cash flows for the years then ended.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Metwood, Inc. and subsidiary as of June 30, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Bongiovanni & Associates, CPAs
Bongiovanni & Associates, CPAs
Cornelius, North Carolina
October 1, 2012

ITEM 7. Management’s Discussion and analysis of financial condition and results of operation

Management’s Discussion and Analysis of Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the financial statements included herein. Further, this MD&A should be read in conjunction with the Company’s Financial Statements and Notes to Financial Statements included in this Annual Report on Form 10-K for the years ended June 30, 2013 and June 30, 2012, as well as the “Business” and “Risk Factors” sections within this Annual Report on Form 10-K. The Company's financial statements have been prepared in accordance with United States generally accepted accounting principles.

Management’s Discussion and Analysis may contain various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-K, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company has adopted the most conservative recognition of revenue based on the most astringent guidelines of the SEC. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

We had previously entered into a Member Interests Purchase Agreement (the "Agreement") dated June 30, 2013 with Global Energy Group LLC. Our company has determined not to consummate the transaction. Therefore, we have decided to proceed with filing a 10K excluding information regarding Global Energy Group LLC. At the present time, both parties continue their due diligence as negotiations proceed. Please look for additional information on these proceedings in future filings.

Weanticipatethatthenexttwelvemonthswillbeaperiodofcontinued growthasweseektofurther expandourpresenceinnewmarketsthroughout theUnited Statesthrough increasednumbersof distributors,licensees anddealers. ICC code approval is being soughtforour TUFFBEAM and is expected tobeobtained within the comingfiscal year. If this approval is obtained, product marketability would be greatly enhanced and would likely lead tohigher demand.

ITEM 7.A. Quantitative and Qualitative Disclosures about Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

 

(10)
Table of Contents

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2012 AND 2011

ITEM 8. Financial statements and supplementary data

   June 30,
  20122011
ASSETS    
    
Current Assets       
Cash and cash equivalents $58,646 $180,448 
Accounts receivable, net  231,081  240,581 
Inventory  961,780  855,864 
Recoverable income taxes  —    42,606 
Other current assets  31,871  47,872 
        
Total current assets  1,283,378  1,367,371 
        
Property and Equipment       
Leasehold improvements  264,820  259,490 
Furniture, fixtures and equipment  93,458  98,458 
Computer hardware, software and peripherals  167,763  159,261 
Machinery and shop equipment  459,087  457,688 
Vehicles  381,373  420,533 
Land improvements  67,959  67,959 
   1,434,460  1,463,389 
Less accumulated depreciation  (1,001,068) (935,093)
        
Net property and equipment  433,392  528,296 
        
Other Assets       
Deferred tax asset  224,317  157,792 
Less valuation reserve  (112,159) (120,732)
   112,158  37,060 
        
Goodwill  —    253,088 
        
TOTAL ASSETS $1,828,928 $2,185,815 
        
LIABILITIES AND STOCKHOLDERS' EQUITY       
        
Current Liabilities       
Accounts payable $79,177 $78,401 
Note payable  —    5,359 
Customer deposits  74,688  —   
Accrued expenses  10,187  33,500 
        
Total current liabilities  164,052  117,260 
        
Long-term Liabilities       
Note payable  —    24,529 
Due to related company  112,711  136,942 
        
Total long-term liabilities  112,711  161,471 
        
Total liabilities  276,763  278,731 
        
Stockholders' Equity       
Common stock ($.001 par, 100,000,000 shares authorized;       
  12,231,797 shares issued and outstanding at June 30, 2012 and 2011)  12,232  12,232 
Common stock not yet issued ($.001 par, 8,150 shares at       
   June 30, 2012 and 2011)  8  8 
Additional paid-in capital  1,544,268  1,544,268 
Retained earnings (deficit)  (4,343) 350,576 
        
Total stockholders' equity  1,552,165  1,907,084 
        
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,828,928 $2,185,815 

See accompanying notesREPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

TotheBoardofDirectorsof Metwood,Inc.

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofMetwood,Inc.(aNevada corporation)andsubsidiaryasofJune30,2013and2012,andtherelatedconsolidatedstatementsof income, stockholders' equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to consolidateexpress an opinionon these consolidatedfinancial statementsbasedonour audits.

WeconductedourauditsinaccordancewithauditingstandardsofthePublicCompanyAccounting OversightBoard(UnitedStates). Those standards require that weplan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that ouraudits provide a reasonablebasis for our opinion.

Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterial respects,thefinancialpositionofMetwood,Inc.andsubsidiaryasof June30,2013and2012,and the results of their operations and their cash flows for the years then ended in conformity with accountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

/s/Bongiovanni&Associates,CPAs

Bongiovanni&Associates,CPAs

Cornelius,NorthCarolina

November 21,2013

(11)
Table of Contents

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED JUNE 30, 2012 and 2011
     
  2012 2011
     
REVENUES        
Sales $1,925,670  $2,048,516 
Cost of sales  1,218,251   1,161,821 
         
Gross profit  707,419   886,695 
         
ADMINISTRATIVE EXPENSES        
Advertising  40,115   77,253 
Bad debt provision  1,973   11,548 
Depreciation  32,997   30,541 
Impairment losses on intangible assets  253,088   —   
Insurance  23,269   18,235 
Payroll expenses  489,196   559,136 
Professional fees  49,757   55,876 
Rent  80,600   79,200 
Research and development  15,142   10,555 
Telephone  17,694   18,240 
Vehicle  47,498   44,117 
Other  78,837   103,691 
         
Total administrative expenses  1,130,166   1,008,392 
         
Loss from operations  (422,747)  (121,697)
         
Other income  9,896   14,718 
         
Income tax benefit  (65,654)  (41,142)
         
Loss from continuing operations  (347,197)  (65,837)
         
Discontinued operations  (7,722)  (20,425)
         
Net loss $(354,919) $(86,262)
         
Basic and diluted deficit per share $(0.03) $(0.01)
         
Loss per share from discontinued operations  **   ** 
         
Weighted average number of shares  12,231,797   12,231,797 
         
**Less than $.01        
         
See accompanying notes to consolidated financial statements.  

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2013 AND 2012
     
   June 30,
  2013 2012
ASSETS   
     
Current Assets        
Cash and cash equivalents $174,650  $58,646 
Accounts receivable, net  238,515   231,081 
Inventory  930,672   961,780 
Other current assets  30,160   31,871 
         
Total current assets  1,373,997   1,283,378 
         
Property and Equipment        
Leasehold improvements  266,689   264,820 
Furniture, fixtures and equipment  93,243   93,458 
Computer hardware, software and peripherals  178,605   167,763 
Machinery and shop equipment  465,085   459,087 
Vehicles  372,646   381,373 
Land improvements  67,959   67,959 
   1,444,227   1,434,460 
Less accumulated depreciation  (1,063,326)  (1,001,068)
         
Net property and equipment  380,901   433,392 
Other Assets        
Deferred tax asset, less valuation reserve  189,308   112,158 
TOTAL ASSETS $1,944,206  $1,828,928 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
         
Current Liabilities        
Accounts payable $135,248  $79,177 
Customer deposits  115,011   74,688 
Accrued expenses  10,791   10,187 
         
Total current liabilities  261,050   164,052 
         
Long-term Liabilities        
Due to related company  100,000   112,711 
         
Total long-term liabilities  100,000   112,711 
         
Total liabilities  361,050   276,763 
         
Stockholders' Equity        
Common stock ($.001 par, 100,000,000 shares authorized;        
15,221,647 shares issued and outstanding at June 30, 2013)  15,222   12,232 
Common stock not yet issued ($.001 par, 8,150 shares at        
    June 30, 2013)  8   8 
Additional paid-in capital  1,899,773   1,544,268 
Retained earnings (deficit)  (331,847)  (4,343)
         
Total stockholders' equity  1,583,156   1,552,165 
         
TOTAL LIABILITIES        
  AND STOCKHOLDERS' EQUITY $1,944,206  $1,828,928 

See accompanying notes to consolidated financial statements.

 

(12)
Table of Contents

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
             
             
           
  Common Shares Not Common Shares Not Additional   
 Common Shares Common Shares Yet Issued Yet Issued Paid-in Retained 
 (000s) ($.001Par) (000s) ($.001Par) Capital Earnings 
             
Balances July 1, 201012,232 $12,232 8 $8 $  1,544,268 $   436,838  
             
Net loss for year- - - -  -  (86,262) 
             
Balances June 30, 201112,232 $12,232 8 $8 $  1,544,268 $350,576 
             
Net loss for year- - - - - $ (354,919) 
             
Balances June 30, 201212,232 $12,232 8    $       8 $1,544,268 ($4,343) 
METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED JUNE 30, 2013 and 2012

   June 30,
   2013   2012 
REVENUES        
Construction sales $2,157,379  $1,925,670 
Engineering sales  —     14,856 
Gross sales  2,157,379   1,940,526 
         
Cost of construction sales  1,359,162   1,234,196 
Cost of engineering sales  —     19,821 
Gross cost of sales  1,359,162   1,254,017 
         
Gross profit  798,217   686,509 
         
ADMINISTRATIVE EXPENSES        
Advertising  29,607   41,719 
Bad debt provision  110   15,058 
Depreciation  22,289   36,040 
Impairment losses on intangible assets  —     253,088 
Insurance  22,584   23,521 
Payroll expenses  767,770   489,196 
Professional fees  60,022   49,757 
Rent  80,820   80,600 
Research and development  5,073   15,142 
Telephone  19,525   17,787 
Vehicle  30,683   47,619 
Other  174,355   65,875 
         
Total administrative expenses  1,212,838   1,135,402 
         
Operating loss  (414,621)  (448,893)
         
Other income  9,967   18,876 
         
Loss before income taxes  (404,654)  (430,017)
         
Income tax benefit  (77,150)  (75,098)
         
Net loss $(327,504) $(354,919)
         
Basic and diluted deficit per share $(0.02) $(0.03)
         
Weighted average number of shares  15,221,647   12,231,797 

See accompanying notes to consolidated financial statements.

 

(13)
Table of Contents

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
   
  2012 2011
OPERATING ACTIVITIES        
Net loss $(354,919) $(86,262)
Adjustments to reconcile net loss to net cash provided by        
(used for) operating activities:        
Depreciation, net of property disposals  65,975   109,151 
Impairment loss on intangible assets  253,088   —   
Provision for deferred income taxes  (75,098)  (86,815)
(Increase) decrease in operating assets:        
Accounts receivable  9,500   47,208 
Inventory  (105,915)  83,013 
Other current assets 16,001   15,496 
Refundable income taxes  42,606   41,777 
Increase (decrease) in operating liabilities:        
Accounts payable and accrued expenses  52,150   (76,173)
Net cash provided by (used for) operating activities  (96,612)  47,395 
         
INVESTING ACTIVITIES        
Property, plant and equipment:        
Purchases  (39,361)  (271,362)
Property disposals  68,290   9,100 
Net cash provided by (used for) investing activities  28,929   (262,262)
         
FINANCING ACTIVITIES        
Net repayment to related party  (24,231)  (38,085)
Net borrowings (repayments) from vehicle financing  (29,888)  29,888 
Net cash used for financing activities  (54,119)  (8,197)
         
Net (decrease) in cash  (121,802)  (223,064)
         
Cash, beginning of the year  180,448   403,512 
         
Cash, end of the year $58,646  $180,448 
         
See accompanying notes to consolidated financial statements.  

METWOOD, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012

       
       
   CommonCommon  
 CommonCommonShares NotShares NotAdditional 
 SharesSharesYet IssuedYet IssuedPaid-inRetained
  (000s)  ($.001 Par)  (000s)  ($.001 Par)  Capital  Earnings 
                   
Balances July 1, 2011 12,232 $12,232  8 $8 $1,544,268 $350,576 
                   
Net loss for year —    —    —    —    —    (354,919)
                   
Balances June 30, 2012 12,232 $12,232  8 $8  1,544,268 ($4,343)
                   
Issuance of common stock                  
  to employees 560 $560       $285,040    
                   
Issuance of common stock                  
  to related company 2,430 $2,430       $70,465    
                   
Net loss for year —    —    —    —    —   $(327,504)
                   
Balances June 30, 2013 15,222 $15,222  8 $8 $1,899,773 ($331,847)
                   
See accompanying notes to consolidated financial statements.

 

(14)
Table of Contents

METWOOD, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 20122013 AND 2011
2012

 

   2013   2012 
         
OPERATING ACTIVITIES        
Net loss $(327,504) $(354,919)
Adjustments to reconcile net loss to net cash provided by        
(used for) operating activities:        
Depreciation, net of property disposals  62,258   65,975 
Provision for deferred income taxes  (77,150)  (75,098)
(Increase) decrease in operating assets:        
Accounts receivable  (7,134)  6,539 
Impairment loss on intangible assets  —     253,088 
Inventory  31,108   (105,915)
Prepaid expenses  1,411   18,962 
Refundable income taxes  —     42,606 
Increase in operating liabilities:        
Accounts payable, customer deposits and accrued expenses  96,998   52,150 
Net cash provided used for operating activities  (220,013)  (96,612)
         
INVESTING ACTIVITIES        
Issuance of common stock  358,495   —   
Property, plant and equipment:        
Purchases  (29,567)  (39,361)
Property disposals  19,800   68,290 
Net cash provided by investing activities  348,728   28,929 
         
FINANCING ACTIVITIES        
Net repayment to related party  (12,711)  (24,231)
Net borrowings from vehicle financing  —     (29,888)
Net cash used for financing activities  (12,711)  (54,119)
         
Net increase (decrease) in cash  116,004   (121,802)
         
Cash, beginning of the year  58,646   180,448 
         
Cash, end of the year $174,650  $58,646 
         
See accompanying notes to consolidated financial statements.

NOTE 1 - ORGANIZATION AND OPERATIONS
Metwood, Inc. ("Metwood") was organized under the laws of the Commonwealth of Virginia on April 7, 1993.  On June 30, 2000, Metwood entered into an Agreement and Plan of Reorganization in which the majority of its outstanding common stock was acquired by a publicly held Nevada shell corporation.  The acquisition was a tax-free exchange for federal and state income tax purposes and was accounted for as a reverse merger in accordance with Accounting Principles Board ("APB") Opinion No. 16.  Upon acquisition, the name of the shell corporation was changed to Metwood, Inc., and Metwood, Inc., the Virginia corporation, became a wholly owned subsidiary of Metwood, Inc., the Nevada corporation.  The publicly traded shell corporation had not had a material operating history for several years prior to the merger.
Effective January 1, 2002, Metwood acquired certain assets of Providence Engineering, PC (The"Providence"), a professional engineering firm with customers in the same proximity as Metwood, for $350,000 and accounted for the transaction under the purchase method of accounting.  As of June 30, 2012, Providence is no longer an operating segment of the Company. The Company has concluded that the majority of the engineering portion of the business can best be handled through a strategic partnership with an outside engineering firm. The Company believes that continuing research and development efforts will soon enable us to meet code requirements for our products and will eliminate the need for individual engineering seals.
The Company provides construction-related products and engineering services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in southwestern Virginia.  
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES(15)
Table of Contents

 

METWOOD,INC.ANDSUBSIDIARY

NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

JUNE30,2013AND2012

NOTE1-ORGANIZATIONANDOPERATIONS

Metwood,Inc.("Metwood") wasorganizedunderthelawsof theCommonwealthofVirginiaon April7,1993. OnJune30,2000,MetwoodenteredintoanAgreementandPlanofReorganizationin which the majorityof its outstanding common stock was acquiredbyapubliclyheld Nevada shell corporation. The acquisitionwas a tax-free exchangeforfederal andstate income taxpurposes and was accountedfor asareversemerger inaccordancewithAccounting Principles Board("APB") OpinionNo.16. Upon acquisition, thenameof theshell corporation was changed to Metwood, Inc., and Metwood, Inc., the Virginia Corporation,became a whollyowned subsidiaryof Metwood, Inc., theNevadaCorporation. The publiclytraded shell corporationhadnothad a materialoperating historyforseveralyearspriortothemerger.

EffectiveJanuary1,2002,MetwoodacquiredcertainassetsofProvidence Engineering, PC ("Providence"),aprofessionalengineeringfirmwith customers in the sameproximityasMetwood, for $350,000 and accountedfor the transactionunder thepurchase methodof accounting. AsofJune 30, 2012,Providenceisnolongeranoperating segmentofthe Company. We have concluded that the majority of the engineering portion of thebusiness canbestbehandled through a strategic partnership with an outside engineeringfirm. We believe that continuing research and development efforts will soon enable us to meet code requirementsforourproducts andwill eliminatetheneedfor individual engineering seals.

Weprovideconstruction-relatedproducts andengineeringservicestoresidential customersand contractors,commercialcontractors,developers andretailenterprises, primarilyinsouthwestern Virginia.

NOTE2-SUMMARYOFSIGNIFICANTACCOUNTING PRACTICES

BasisofPresentation- The financial statements include the accounts of Metwood, Inc.ThefinancialstatementsincludetheaccountsofMetwood, Inc.(aNevada corporation)anditswhollyowned subsidiary, MetwoodInc. (a Nevada corporation) and its wholly owned subsidiary, Metwood Inc. (a Virginia corporation) preparedVirginiacorporation)prepared in accordance with accounting principles generally accepted in the United States ofof America and pursuant to the rules and regulationspursuanttotherulesandregulations of the Securities and Exchange Commission.theSecurities and Exchange Commission. All significant intercompany balances and transactions have been eliminated.

 

Management'sUseofEstimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts-Thepreparationofconsolidatedfinancialstatementsinconformity withaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequiresmanagement tomakeestimatesandassumptionsthataffectthe reportedamounts of assets and liabilitiesandliabilities and disclosures of contingent assetsofcontingentassets and liabilities at the date of consolidated financialliabilitiesatthedate ofconsolidatedfinancial statements and theandthe reported amounts of revenues and expenses during the reporting period. At June 30, 2012 and 2011, the significant estimates used by management include the valuation of its goodwill.  Actual results could differActualresults coulddiffer from those estimates.

FairValueofFinancial Instruments - For certain of our financial instruments, none of which-Forcertainofourfinancialinstruments,noneofwhich are held for trading, including cash, held fortrading,includingcash,accountsreceivable,accounts receivable, inventory, other current assets, accounts payable and accrued expenses, and the bank lines of credit, the carrying amounts approximate fair value due to their short maturities.payableandaccrued expenses, and thebank linesofcredit, thecarryingamounts approximatefairvalue duetotheir shortmaturities.

CashandCashEquivalents - For purposes of the Consolidated-ForpurposesoftheConsolidated Statements of Cash Flows, we consider liquid investments with an original maturity of three months or less to be cash equivalents.ofCashFlows,weconsider liquidinvestmentswithanoriginalmaturityofthreemonthsorlesstobecashequivalents. We maintain our cash in bank deposit accounts, which, at times, may exceed the federally insured limit of $250,000.$250,000. We have not experienced any losses in such accountsaccounts and believe we are not exposednot exposed to any significant credit riskrisk on cash and cash equivalents.and cash equivalents.

AccountsReceivable - We grant credit in the form of unsecured accounts receivable-Wegrantcreditintheformofunsecuredaccountsreceivable to our customers based on an evaluation of their financial condition.ourcustomers basedonanevaluationoftheirfinancial condition. We perform ongoing credit evaluationsongoingcreditevaluations of our customers.our customers. The estimate of the allowance for doubtful accounts, doubtfulaccounts,which is charged off to bad debtischargedoff tobad debt expense,is based on management’sonmanagement’s assessment of current economic conditions and historical collection experience with each customer. At both June30 2012,2013 and 2011, the allowance for doubtful accounts2012, the allowance fordoubtful accounts was $5,000.$5,000. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms and are charged off to the allowance for doubtful accounts when determined uncollectible.  For thefor doubtful accountswhendetermined uncollectible. Forthe years ended JuneJune 30, 20122013 and 2011,2012, the bad debt expense waswas $110 and $15,058, and $13,332, respectively.

Inventory-Inventory,consistingprimarilyofmetalandwoodrawmaterials,islocatedonourpremises andisstatedatthelowerofcostormarket usingthefirst- Inventory, consisting primarily of metalin,first-out method.

PropertyandEquipment-Propertyandequipmentarestatedatcostlessaccumulateddepreciation and wood raw materials, is located on our premises and is stated at the lower of cost or market using the first-in, first-out method.aredepreciatedovertheirestimatedusefu

l livesusingthestraight-linemethod.RecoveryperiodsraProperty and Equipment - Property and equipment are stated at cost less accumulated depreciation and are depreciated over their estimated useful lives using the straight-line method.  Recovery periods range from three to thirty-nine years.  Upon retirement or sale, the cost and related accumulated depreciationnge fromthreetothirty-nineyears.Uponretirementorsale,thecostandrelatedaccumulateddepreciation are removed from the balance sheet, and the resulting gain or loss is reflected in otherother income and expense. Maintenance and repairs are charged to operations as incurred.expense. Maintenanceandrepairsarechargedtooperations asincurred.

 

ImpairmentofLong-livedAssets - We-Weevaluateourlong-livedassetsforindicationsofpossibevaluate our long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability is measuredle impairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountofanasset maynotberecoverable. Recoverabilityismeasured by comparing the carrying amounts toamountsto the future net undiscounted cash flows which theflows which the assets are expectedexpected to generate. Should an impairment exist, the impairment would be measuredimpairmentwouldbemeasuredby theamount by the amount by which the carrying amount of the assets exceeds thewhichthecarrying amountof theassetsexceedsthe projected discounted future cash flows arising from thefuturecashflows arising from the asset. There have been no such impairments ofimpairmentsof long-lived assets through June throughJune30,2013and 2012 and 2011..

(15)
Table of Contents

Patents - We have been assigned several key product patents developed by certain Company officers.  No value has been recorded in our financial statements because the fair value of the patents was not determinable within reasonable limits at the date of assignment.-Wehavebeenassignedseveralkeyproductpatentsdevelopedbycertain Companyofficers. Novaluehasbeenrecordedinourfinancialstatementsbecausethefairvalueofthepatentswasnot determinablewithinreasonablelimitsatthedateofassignment.

 

Goodwill - We account for goodwill and intangibles under FASB ASC 350, “Goodwill and Other Intangible Assets.-Weaccountforgoodwillandintangiblesunder SFASNo.142,“Goodwill andOther IntangibleAssets. As such, goodwill is not amortized, but is subject to annual impairment reviews, orAssuch,goodwillisnotamortized,butissubjectto annual impairmentreviews,or more frequent reviews if events or circumstances indicate there may be anmaybe impairment. Goodwill wasGoodwillwas recorded at theatthe time of Metwood's acquisition of Providence Engineering.of Providence Engineering. Since ProvidenceProvidence is nono longer an active company (it has no employees and carries on no business activities),all goodwillgoodwill carried onon the books was100%impairedand accordinglywaswritten off asofJune30,2012.

RevenueRecognition-Revenueisrecognizedwhengoodsareshipped andearnedorwhen services areperformed,providedcollectionof theresulting receivableisprobable.Ifanymaterial contingencies are present, revenue recognition is 100% impaireddelayed until all material contingencies are eliminated. Further, no revenue is recognized unless collection of the applicable consideration is probable.

IncomeTaxes-IncometaxesareaccountedforinaccordancewithFASBASC740,IncomeTaxes.Adeferredtaxassetorliabilityis recorded for alltemporarydifferencesbetweenfinancial and tax reporting and accordinglyfor net operating loss carry forwards,where applicable. Deferred tax assets arereduced bya valuationallowance when, in theopinion ofmanagement, itis more likely thannot thatsome portion or the entiredeferred tax assetwillnotbe realized. Deferred tax assets and liabilities are adjustedfortheeffectofchangesintaxlaws andratesonthedateofenactment.

ResearchandDevelopment-Weperformresearchanddevelopmentonourmetal/woodproducts, newproductlines,andnewpatents. Costs,ifany,are expensed asthey are incurred. For the year ended June30,2013, expenseswere$5,073 andfor the year endedJune30,2012, expenseswere$15,142.

Advertising-Weexpenseadvertisingcostsasincurred. However,certainexpenditures aretreated asprepaid (suchas tradeshow fees) if they arefor goodsor serviceswhichwillnotbereceiveduntil after the end of the accountingperiod. These costs are subsequentlyrecognized as expenses in those periodsinwhich thegoodsorservices arereceived.

EarningsPerCommonShare-Basicearningspershareamountsarebasedontheweighted average sharesofcommonstockoutstanding. Ifapplicable,dilutedearningspershare would assumethe conversion, exercise or issuance of all potential common stock instruments such asoptions,warrants and convertible securities, unlessthe effect is toreduce a lossor increase earningsper share. This presentation has been written off.adoptedfor the yearspresented. There were no adjustmentsrequired tonet income for the years presented in the computationof diluted earningsper share.

 

Recent AccountingPronouncements-InApril2013,the FASBissuedASUNo.2013-07, PresentationofFinancialStatements(Topic205):LiquidationBasisofAccounting(“ASU2013-07"). With ASU 2013-07, the FASB amends the guidance in the FASBAccounting Standards Codification [FASB ASC] Topic 205, entitled Presentationof Financial Statements. The amendments serve to clarify when and how reporting entities should apply the liquidationbasisof accounting. The guidance is applicable to all reporting entities, whether they arepublicorprivate companies or not-for-profit entities. The guidance also providesprinciples for therecognitionof assets and liabilities and disclosures, as well as related financial statement presentation requirements. With the new guidance, reporting entities in liquidation are required topreparefinancial statements usingabasisofaccountingthat communicates information to usersof thefinancial statementsto enable those users to develop expectations about how much the reporting entitieswillhave available for distribution to investors after disposing of its assets and settling itsobligations. The requirements in ASU 2013-07 are effective for annual reportingperiodsbeginning afterDecember15,2013, and interim reportingperiodswithinthose annualperiods. Reporting entities are required toapply the requirements in ASU 2013-07 prospectively from the day that liquidationbecomes imminent. Early adoption ispermitted.

Revenue Recognition - Revenue is recognized when goods are shipped and earned or when services are performed, provided collection of the resulting receivable is probable.  If any material contingencies are present, revenue recognition is delayed until all material contingencies are eliminated.  Further, no revenue is recognized unless collection of the applicable consideration is probable.
Income Taxes - Income taxes are accounted for in accordance with FASB ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carryforwards, where applicable. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Research and Development - We perform research and development on our metal/wood products, new product lines, and new patents.  Costs, if any, are expensed as they are incurred.  For the year ended June 30, 2012, expenses were $15,142 and for the year ended June 30, 2011, expenses were $10,555.
Advertising -  We expense advertising costs as incurred.  However, certain expenditures are treated as prepaid (such as trade show fees) if they are for goods or services which will not be received until after the end of the accounting period.  These costs are subsequently recognized as expenses in those periods in which the goods or services are received.
Earnings (loss) Per Common Share - Basic earnings (loss) per share amounts are based on the weighted average shares of common stock outstanding.  If applicable, diluted earnings (loss) per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. This presentation has been adopted for the years presented.  There were no adjustments required to net income (loss) for the years presented in the computation of diluted earnings (loss) per share.
Recent Accounting Pronouncements -  In May 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) No. 2011-04 amending Topic 820 that substantially converged the requirements for fair value measurement and disclosure between the FASB and the International Accounting Standards Board (“IASB”).  This ASU is largely consistent with existing fair value measurement principles under U.S. GAAP. This ASU was effective for the Company in its quarter beginning January 1, 2012 and has not had a material impact on the Company’s financial statements.
In June 2011, the FASB issued ASU 2011-05 amending Topic 220 that addressed the presentation of comprehensive income in the financial statements. This accounting update allows an entity the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, this ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity and does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This ASU is effective for the Company in its quarter beginning January 1, 2012 and is not expected to have a material impact on the Company’s financial statements other than modifying the presentation of comprehensive income.

Managementdoesnotbelievethat anyotherrecentlyissued,butnotyeteffectiveaccounting pronouncements,ifadopted,wouldhaveamaterialeffectontheaccompanyingconsolidatedfinancial statements.

(16)
Table of Contents

In June 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-05 "Comprehensive Income (Topic 220): Presentation of Comprehensive Income." The Update is intended to increase the prominence of other comprehensive income in financial statements.  In U.S. GAAP, the ASU will supersede some of the guidance in Topic 220 of the accounting Codification.  The main provisions of this Update provide that an entity that reports items of other comprehensive income has the option to present comprehensive income in either one or two consecutive financial statements.  A single statement must present the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income.  In a two-statement approach, an entity must present the components of net income and total net income in the first statement. That statement must be immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income.   The option  in  current GAAP  that permits the presentation of other comprehensive income in the statement of changes in equity has been eliminated.  The amendments in this Update should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. Early adoption is permitted, because compliance with the amendments is already permitted.  We are evaluating the impact this Update will have on our consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08 amending Topic 350 that allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  Under this new ASU, if a Company chooses the qualitative method, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. This ASU is effective for annual and interim impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted.  The Company does not expect this ASU to have a material impact on its financial statements.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3 - RELATED-PARTY TRANSACTIONS
For the years ended June 30, 2012 and 2011, the Company had sales of $24,231 and $112,062,  respectively, to our shareholder and CEO,  Robert Callahan.   As of June 30, 2012 and 2011,  the related receivable was $-0-.
Also, from time to time, the Company contract with a construction company 50% owned by its CEO which provides capital improvements and maintenance work on our buildings and grounds.  Billings for such services during the years ended June 30, 2012 and 2011 were $-0-.

NOTE3-RELATED-PARTYTRANSACTIONS

 

NOTE 4 - COMMITMENT

In prior years,FortheyearsendedJune30,2013 and2012, we implementedhadsalesof$21,455 a stock-based incentive compensation plan for our employees.nd$24,231,respectively,to ourshareholderandCEO,Robert Callahan. AsofJune30,2013 and2012, therelated receivablewas$-0-.

Also,fromtimetotime,wecontractwithaconstructioncompany50%ownedbyour CEOwhich providescapitalimprovementsandmaintenanceworkonourbuildings and grounds. Billingsforsuch services duringtheyears endedJune30, 2013and2012were$10,080and$-0-, respectively.

NOTE4-COMMITMENT

Inprioryears,weimplementedastock-basedincentivecompensationplanforouremployees. Participating employees have an after-tax deduction withheld by the Company throughout the calendaremployeeshaveanafter-taxdeductionwithheldbytheCompanythroughout thecalendar year. As of December 31 of each year, the employee is considered vested in the plan, and we will match the participating employee's withheld amounts. We may also make a discretionary contributionmakea discretionarycontribution based upon pay incentives or attendance. Periodically, we will purchase restricted stock on behalf of the employee in the amount of his withholdings, our match, and any discretionary contributions.

 

NOTE5-EQUITY

DuringtheyearsendedJune30,2013,weissued560,000commonsharesfor thebenefitofemployees includedinourstock-basedincentivecompensationprogram. Therewereno shares issued in the programfortheyearendedJune30,2012. Inaddition,2,429,850 shareswere issuedto arelatedparty aspaymentfora finder's fee.

NOTE6-SALEOFFIXEDASSETSANDRELATEDOPERATINGLEASE

DuringtheyearendedJune30,2005,weenteredintoasalesandleasebacktransactionwitharelated party.Wesoldthevariousbuildingsat our corporateheadquarterswhichhouseour manufacturing plants, executiveofficesand other buildingsfor$600,000 in cash. We simultaneously enteredinto a commercial lease agreement with the related party whereby we are committed to lease back these same properties for $6,800 per month over a ten-year term expiring December31, 2014. Rent expense charged to operations related to the commercial lease for the years ended June 30, 2013 and 2012 was $81,600 and$80,600, respectively.

Futureminimumleasepaymentsundernon-cancelableoperatingleasesasof June30,2013 areas follows:

YearEnding June30,

 2014 $81,600 
 2015 and beyond    

NOTE8-INCOMETAXES

Thecomponentsofincometaxbenefit consistof:

   2013   2012
 Current:       
  Federal $(20,681)   $
    State  (5,598)     — 
   (26,279)     —  
 Deferred:       
 Federal  (44,569)  (64,362)
    State  (6,302)  (10,736)
   (50,871)   (75,098)
        
  Total income tax benefit $(77,150) $(75,098)

Thereconciliationoftheprovisionfor income taxesatthe U.S.federalstatutoryincometaxrateof 39%totheCompany'sincometaxes isasfollows:

 
NOTE 5 - EQUITY
During the years ended June 30, 2012 and 2011, we did not issue any common shares for the benefit of employees included in our stock-based incentive compensation program. 
NOTE 6 - SALE OF FIXED ASSETS AND RELATED OPERATING LEASE
During the year ended June 30, 2006, we entered into a sales and leaseback transaction with a related party.  We sold the various buildings at our corporate headquarters which house our manufacturing plants, executive offices and other buildings for $600,000 in cash.  We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014.  Rent expense charged to operations for the years ended June 30, 2012 and 2011 was $80,600 and $79,200, respectively.
Future minimum lease payments under non-cancelable operating leases as of June 30, 2012 are as follows:

 

          
 Year Ending June 30,
              201381,600  
              201481,600  
              2015 and beyond           40,800      
          
       $ 204,000  
     Loss before income taxes $(404,654) $(430,017)
     Income tax benefit computed at the statutory rate  (157,815)  (167,706)
     State income tax benefit, net of federal tax effect  (14,517)  (15,459)
     Non-deductible expenses  3,119   2,977 
     Valuation reserve adjustment  77,150   89,209 
     Effect of graduated income tax rates  14,912   15,881 
         
     Total income tax benefit $(77,150) $(75,098)

 

Deferredincometaxesreflectthenettaxeffectsoftemporarydifferencesbetweenthecarryingamounts ofassetsandliabilitiesforfinancialreportingpurposesandtheamountusedforfederalandstate income tax purposes. Wehaverecordeddeferredtaxassets at June30,2013 and2012,netofa valuation reserve, of $189,308and $112,158,respectively. The components of these amounts are as follows:

  2013 2012
         
Tax loss carryforward $102,666  $99,047 
Depreciation and miscellaneous  86,642   13,111 
         
Net deferred tax asset $189,308  $112,158 

(17)

 

NOTE 7 - DISCONTINUED OPERATIONS
In June 2012, the Company's subsidiary, Providence Engineering, PC, ceased operations because management concluded that most of the engineering portion of our business can best be handled through a strategic partnership with an outside engineering firm.  The discontinued operations are reported in these consolidated financial statements for the two reporting years ended June 30, 2012 and 2011.  See Note 9 for information on the revenues and expenses of this segment of our business.

 

NOTE 8 - INCOME TAXES    
      
The components of income tax benefit consist of:   
  2012 2011 
 Current:    
      Federal $              -  $ (113,429) 
      State                 - (7,303) 
                   - (120,732) 
 Deferred:    
      Federal(64,362) 67,636  
      State(10,736) (1,049) 
  (75,098) 66,587  
      
     Total income tax benefit$   (75,098) $  (54,145) 
      
The reconciliation of the provision for income taxes at the U. S. federal statutory income tax rate of 39% to the Company's income taxes is as follows:
      
     Loss before income taxes$ (430,017)  $(140,407) 
     Income tax benefit computed at the statutory rate(167,706) (54,758) 
     State income tax benefit, net of federal tax effect(15,459) (5,095) 
     Non-deductible expenses2,977  475  
     Valuation reserve adjustment89,209                  - 
     Effect of graduated income tax rates15,881  5,233  
      
     Total income tax benefit$   (75,098) $  (54,145) 

NOTE9-SEGMENTINFORMATION

 

      
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.  We have recorded deferred tax assets at June 30, 2012 and 2012, net of a valuation reserve, of $112,159 and $37,060, respectively.  The components of these amounts are as follows:
      
  2012 2011 
      
 Tax loss carryforward$     99,047  $    66,587  
 Depreciation and miscellaneous13,112  17,528  
 Amortization of goodwill                 - (47,055) 
      
 Net deferred tax asset$   112,159  $    37,060  

UntilJune30,2012,weoperatedintwoprincipalbusiness segments:(1) construction-relatedproducts and(2)engineering services.Performanceofeach segment isevaluatedbasedonprofitor lossfrom operations before income taxes. These reportable segments are strategic business units that offer different products and services. Summarized revenue and expense information by segment for the years endedJune30, 2013and2012isasfollows:

 

NOTE 9 - SEGMENT INFORMATION
      
Until June 30, 2012, we operated in two principal business segments: (1) construction-related products and (2) engineering services.  Performance of each segment is evaluated based on profit or loss from operations before income taxes.  These reportable segments are strategic business units that offer different products and services.  Summarized revenue and expense information by segment for the years ended June 30, 2012 and 2011 is as follows:
      
  2012 2011 
        Construction:    
 Sales$ 1,925,670  $ 2,048,516  
 Cost of sales(1,234,196) (1,161,821) 
 Intersegment expenses(200) (18,693) 
 Intersegment revenues6,000  24,000  
 Corporate and other expenses(1,032,671) (952,532) 
 Segment loss$  (335,397) $    (60,530) 
      
 Total assets$ 1,828,928  $ 2,200,858  
 Capital expenditures$      39,361  $    235,017  
 Depreciation$      97,821  $    103,308  
 Interest expense $               -  $               - 
      
 Engineering:    
 Sales$      14,856  $    164,241  
 Cost of sales(19,821) (165,805) 
 Intersegment revenues200  18,693  
 Intersegment expenses(6,000) (24,000) 
 Corporate and other expenses(8,757) (18,861) 
 Segment income$    (19,522) $    (25,732) 
      
 Total assets $               - $    534,620  
 Capital expenditures $               - $      36,345  
 Depreciation$        4,120  $      13,575  
 Interest expense$           111   $               - 

 2013 2012
Construction:       
Sales$2,157,379  $1,925,670 
Cost of sales (1,359,162)  (1,234,196)
Intersegment expenses —     (200)
Intersegment revenues —     6,000 
Corporate and other expenses (1,125,721)  (1,032,671)
Segment loss$(327,504) $(335,397)
        
Total assets$1,944,206  $1,828,928 
Capital expenditures$(29,567) $39,361 
Depreciation$79,631  $97,821 
Interest expense$28  $—   
        
Engineering:       
Sales$—    $14,856 
Cost of sales —     (19,821)
Intersegment revenues —     200 
Intersegment expenses —     (6,000)
Corporate and other expenses —     (8,757)
Segment loss$—    $(19,522)
        
Total assets$—    $—   
Capital expenditures$—    $—   
Depreciation$—    $4,120 
Interest expense$—    $111 

 

(18)

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
(a) Evaluation of disclosure controls and procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this Annual Report on Form 10-K. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 
Based on our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures as of June 30, 2012, were designed at a reasonable assurance level and were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information was accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. 
(b) Changes in internal control over financial reporting
We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. As we grow geographically and with new product offerings, we continue to create new processes and controls as well as improve our existing environment to increase efficiencies. Improvements may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes. 
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
Item 9B.  Other Information
None.

NOTE 10 – SUBSEQUENT EVENTS

The following events occurred subsequent to the period covered by this Form 10-K Annual Report for the period ended June 30, 2013.

Amendment to Company’s Articles of Incorporation

On October 1, 2013, the Company filed with the Nevada Secretary of State a Certificate of Amendment to the Company’s Articles of Incorporation. The Amendment was approved by a “Unanimous Written Consent of The Board of Directors of Metwood, Inc.”, on August 6, 2013, pursuant to the authority granted them by a “Written Consent of The Holders of a Majority of the Voting Shares of Metwood, Inc.”, dated August 6, 2013. The information regarding this issue was fully disclosed in the Company’s Form 8-K Report filed on October 2, 2013. The Amendment incorporated the following changes:

a. The total number of shares of "Preferred Stock" that the Corporation is authorized to issue is 40,000,000 shares with a par value of $0.001 per share.

b. Grant to the Board of Directors the full right and authority to increase or otherwise change the authorized shares of common stock and preferred stock without any shareholder action or approval.

c. Grant to the Board of Directors the full right and authority to change the name of the Corporation at a future date without out any shareholder action or approval.

Metwood had previously entered into a Member Interests Purchase Agreement (the "Agreement") dated June 30, 2013 with Global Energy Group LLC. The Company has determined not to consummate the transaction. Therefore, the Company has decided to proceed with filing a 10K excluding information regarding Global Energy Group LLC. At the present time, both parties continue their due diligence as negotiations proceed. Please look for additional information on these proceedings in future filings.

(19)

PART III
Item 10.  Directors, Executive Officers and Corporate Governance
Identification of Directors and Executive Officers
The following table sets forth the names and the nature of all positions and offices held by all directors and executive officers of the Company for the year ending June 30, 2011 and to the date of the filing of this report and the periods during which each such director or executive officer has served in his respective positions:
NamePosition and Background
Robert M. CallahanPresident and CEO
Mr. Callahan has been involved in the building industry for over thirty years.  He is well recognized in southwestern Virginia as an innovator in the uses of passive solar design and wood/metal products in custom home building.  Along with Mr. Ronald Shiflett, he formed Metwood, Inc. in 1993 to bring light-gage construction, used in commercial building for years, into common use in residential construction.
Shawn A. Callahan                     Secretary/Treasurer/CFO/VP/General Manager
Education:  MBA Accounting, University of Phoenix
  B.S. Computer Science and Mathematics, Virginia Military Institute
Since starting with Metwood, Inc. in May 1996, Mr. Callahan has played a major role in the restructuring of the Company, increasing production, improving efficiency, and developing computer aids for the Company.
Term of Office
The term of office of the current directors shall continue until new directors are elected or appointed.
Family Relationships
Robert Callahan is the father of Shawn Callahan.
Involvement in Certain Legal Proceedings
Except as indicated below and to the knowledge of management, during the past five years, no present or former director, person nominated to become a director, executive officer, promoter or control person of the Company:
(1) was a general partner or executive officer of any business by or against which any bankruptcy petition was filed, whether at the time of such filing or two years prior thereto;
(2) was convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
(4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than sixty days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; or
(5) was found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, nor has a judgment been reversed, suspended, or vacated.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors, officers and persons who own more than 10% of the Company's common stock or other registered class of equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission.  Officers, directors and greater than 10% shareholders are required to furnish us with copies of all Section 16(a) forms they file.
Based solely on a review of the forms received covering purchase and sale transactions in the Company's common stock during the fiscal year ended June 30, 2012, the Company believes that each person who, at any time during that period, was a director, executive officer, or beneficial owner of more than 10% of the Company's common stock complied with all Section 16(a) filing requirements.

Item9.ChangesinandDisagreementswithAccountantsonAccountingandFinancialDisclosure

None.

Item9A.ControlsandProcedures

(a) Evaluation odisclosure controls andprocedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, our Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting was not effective as of June 30, 2013. Management’s assessment identified the following materialweaknesses in internal control over financial reporting:

·                     The small size of our Company limits our ability to achieve the desired level of separation in our internal controls and financial reporting. We do have a separate CEO and CFO; however, we do not have an Audit Committee to review and oversee the financial policies and procedures of the Company. Until such time we are able to install an audit committee, we do not meet the full requirement for separation. In the interim, we will continue to strengthen the role of our CEO and CFO and their review of our internal control procedures.

(b) Changes in internal controover financial reporting

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. As we grow geographically and with new product offerings, we continue to create new processes and controls as well as improve our existing environment to increase efficiencies. Improvements may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were not changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item9B.OtherInformation

None.

(20)

Item 11.  Executive Compensation
The following table sets forth in summary form the compensation received during each of the Company's last three fiscal years by our President and Chief Executive Officer, Robert M. Callahan:

PARTIII

 

Summary Compensation Table
         
    OtherRestricted Restricted 
 FiscalAnnual CompensationStock LTIPStock 
 YearSalaryBonusesAwardsOptionsBonuses 
   (1)(2)(3)(4)(4) 
 2012$71,667$   7,800 -0--0--0--0- 
 2011$95,119$   7,200 -0--0--0--0- 
 2010$98,126$   2,400 -0--0--0--0- 

Item10.Directors,ExecutiveOfficersandCorporate Governance

IdentificationofDirectors andExecutiveOfficers

Thefollowing tablesetsforththenamesandthenatureofallpositionsandofficesheldby all directorsandexecutiveofficersoftheCompanyforthe yearending June30,2013andtothedateof thefiling ofthisreport and the periodsduringwhicheach suchdirectororexecutiveofficerhas served inhis respectivepositions:

NamePositionand Background

Robert M.CallahanPresident and CEO

Mr.Callahanhasbeeninvolvedinthebuilding industry forover thirtyyears. Heiswell

recognizedinsouthwesternVirginiaasaninnovator intheusesofpassive solardesign

andwood/metalproducts incustomhomebuilding.AlongwithMr.RonaldShiflett,he

formedMetwood,Inc. in1993tobringlight-gageconstruction,usedincommercial

buildingforyears,intocommonuseinresidentialconstruction.

ShawnA.CallahanSecretary/Treasurer/CFO/VP/GeneralManager

Education:MBAAccounting,UniversityofPhoenix

B.S.ComputerScienceandMathematics,VirginiaMilitary Institute

SincestartingwithMetwood,Inc.inMay1996, Mr.Callahanhasplayedamajor rolein

therestructuringoftheCompany,increasingproduction, improvingefficiency,and

developingcomputeraidsforthe Company.

TermofOffice

Thetermofoffice ofthecurrentdirectorsshallcontinueuntilnewdirectors areelectedor appointed.

FamilyRelationships

RobertCallahanisthefatherofShawnCallahan.

InvolvementinCertainLegalProceedings

Exceptasindicatedbelowandtotheknowledgeofmanagement,during thepastfiveyears,no presentorformerdirector,personnominatedtobecomeadirector, executiveofficer, promoteror controlpersonof the Company:

(1)wasageneralpartnerorexecutiveofficerofanybusinessbyor againstwhich anybankruptcy petitionwasfiled,whetheratthetimeofsuchfilingortwoyearspriorthereto;

(2)wasconvictedinacriminalproceedingornamedthesubjectofapending criminalproceeding (excludingtrafficviolationsandother minoroffenses);

(3)wasthesubjectofanyorder,judgmentordecree,notsubsequentlyreversed,suspendedor vacated,ofanycourtof competentjurisdiction,permanentlyor temporarily enjoining,barring, suspending orotherwiselimitinghisinvolvementinany typeofbusiness,securitiesorbanking activities;

(4)wasthesubjectofanyorder,judgmentordecree,notsubsequentlyreversed,suspendedor vacated,ofanyfederalor stateauthoritybarring, suspendingorotherwiselimitingformorethansixty daystherightofsuchperson to engagein any activity describedabove underthis Item,or tobe associatedwithpersonsengagedinanysuchactivity;or

(5)was foundbyacourtofcompetentjurisdiction(inacivilaction),theCommissionorthe CommodityFuturesTradingCommissiontohaveviolatedafederalorstatesecuritiesorcommodities law,nor hasajudgmentbeenreversed,suspended,orvacated.

CompliancewithSection16(a)ofthe ExchangeAct

Section16(a)oftheSecuritiesExchangeActof1934,asamended,requires theCompany'sdirectors, officersandpersonswhoownmorethan10%oftheCompany's commonstockorotherregistered classofequitysecuritiestofilereportsofownership and changes in ownershipwith the Securities and Exchange Commission. Officers, directors and greater than10% shareholders are required to furnishuswithcopiesofallSection16(a)forms theyfile.

Basedsolelyonareviewoftheformsreceivedcoveringpurchaseandsaletransactions inthe Company'scommonstockduringthefiscalyearendedJune30, 2013,theCompanybelieves that each person who, at any time during that period, was adirector, executiveofficer,orbeneficialownerof more than10%of the Company's common stock compliedwith all Section16(a)filing requirements.

Item11.ExecutiveCompensation

Thefollowingtablesetsforthinsummary formthecompensationreceivedduring eachoftheCompany's lastthreefiscalyearsbyourPresident andChief ExecutiveOfficer, RobertM. Callahan, and our Chief Financial Officer, ShawnA. Callahan:

 

 

 

 

 

Name and Principal Position

 

 

 

 

 

Fiscal Year

Salary
($)
Bonus
($) (1)

Stock Awards
($)

(3)

Option Awards ($)Non Equity Inventive Plan Compens-aton ($)Change in Pension Value and Non Qualified Deferred Compensation Earnings ($)

 

 

 

All Other Compens-ation
($)

(2)

 

 

 

 

 

Total

($)

 

Robert  M. Callahan. CEO and Director201380,0007,100153,0000000241,000)
201271,6677,8000000079,467
201195,1197,20000000102,319
          
Shawn A. Callahan CFO and Director201362,1027,58076,5000000146,182
201263,0068,9380000071,944)
201176,6637,2870000083,950

(1)Thedollarvalueofbonuses(cashandnon-cash) received.

  

 
(1) The dollar value of bonuses (cash and non-cash) received.
(2) During the periods covered by the table, the Company did not pay any other annual compensation not properly categorized as salary or bonus, including perquisites and other personal benefits,

(2) Duringtheperiodscoveredbythetable,theCompanydidnotpayanyother annual compensationnotproperlycategorizedassalaryorbonus, includingperquisites andother personalbenefits,securities or property.(3) During the periods covered by the table, the Company did not make any award of restricted stock.(4) The Company currently has no stock option or restricted stock bonus plans.No member of our management has been granted any option or stock appreciation right; accordingly, no tables relating to such items have been included within this item.Compensation of DirectorsThere are no standard arrangements pursuant to which our directors are compensated for any services provided as director.  No additional amounts are payable to our directors for committee participation or special assignments.There are no arrangements pursuant to which any of our directors was compensated during our last completed fiscal year or the previous two fiscal years for any services provided as director.Termination of Employment and Change of Control ArrangementThere are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary Compensation Table set out above which would in any way result in payments to any such person because of his resignation, retirement or other termination of such person's employment with the Company or its subsidiaries, or any change in control of the Company, or a change in the person's responsibilities following a change in control of the Company.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners
The following table sets forth the shares held by those persons who owned more than five percent of Metwood's common stock as of October 1, 2012, based upon 12,231,797 shares outstanding:

 

Grater Than 5% Owners(3) Duringtheperiodscoveredbythetable,theCompany maderestricted stock

awards asshown.

 

Title of ClassName and Address of Benefial OwnerNo. of SharesPrecent of Class
    
 CommonRobert Callahan
 819 Naff Road  
 Boones Mill, VA 24065 6,521,782 (1) 53.3%
    
CommonRonald Shiflett  
 638 Patti Road  
 Rocky Mount, VA 241512,101,28217.2%

(1) Includes direct and indirect interests.  There are 6,148,750 common shares included in this amount that are owned in the names of family members of Mr. Callahan.
Security Ownership of Management
The following table sets forth the shares held by Metwood directors and officers as of October 1, 2012:

(4)TheCompanycurrentlyhasnostockoptionor restrictedstockbonusplans.

 

Management OwnershipOutstanding Stock Options and Stock Appreciation Rights Grants

The Company has no stock appreciation rights.

 

Title of ClassName and Address of Benefial OwnerNo. of SharesPrecent of Class
 CommonRobert Callahan
819 Naff Road
Boones Mill, VA 24065 6,521,782 (1) 53.3%

Outstanding Stock Awards at Year End

The outstanding equity awards have vested and are previously reported under “Summary Compensation”.

 

Options Exercises and Stocks Vested

(1) Includes direct and indirect interests.  There are 6,148,750 common shares included in this amount that are owned in the names of family members of Mr. Callahan.
Ownership of shares by directors and officers of Metwood as a group:  53.3%
Changes in Control
We know of no contractual arrangements which may at a subsequent date result in a change of control in the Company.

Options exercised and stocks vested as at June 30, 2013 are none.

Grants of Plan-Based Awards

Grants of plan-based awards are none.

Non Qualified Deferred Compensation

As atJune 30, 2013, the Company had no formalized deferred compensation plan.

Golden Parachute Compensation

As atJune 30, 2013, the Company had no arrangements in place relating to the termination of employees.

Long-Term Incentive Plan Awards Table

There are no Long-Term Incentive Plans in place at this time.

Aggregated Option Exercises and Fiscal Year-End Option Values

None.

Compensation of Directors

Directors who provide services to the Company in other capacities has been previously reported under “Summary Compensation”.

Pension Benefits

As ofJune 30, 2013, the Company had no pension or retirement plans.

Equity Compensation Plan Information

None.

 

(21)

Item 13. Certain Relationships and Related Transactions, and Director Independence
Following are the transactions between Metwood and members of management, directors, officers, 5% shareholders, and promoters of Metwood:
We contract with a construction company 50% owned by our CEO which provides capital improvements and maintenance work on ourbuildings and grounds. 
During the year ended June 30, 2006, we entered into a sales and leaseback transaction with a related party.  We sold the various buildings at our corporate headquarters which house our manufacturing plants, executive offices and other buildings for $600,000 in cash.  We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014.  Rent expense charged to operations for the years ended June 30, 2012 and 2011 was $80,600 and $79,200, respectively.
Item 14.  Principal Accounting Fees and Services
The following table sets forth the aggregate fees billed or to be billed by Bongiovanni & Associates, CPAs for audit services rendered in connection with the consolidated financial statements and reports for the years ended June 30, 2012 and 2011:

 20122012
   
Audit Fees$ 15,500$15,500
Audit-related fees--
Tax fees--
All other fees4,2245,550
   
Total fees$ 19,724$21,050

CompensationofDirectors

 

Audit fees: Consist of fees billed for professional services rendered for the audits of our consolidated financial statements and reviews of the interim consolidated financial statements included in quarterly reports and services that are normally provided by our auditors in connection with statutory and regulatory filings or engagements and attest services, except those not required by statute or regulation.
Audit-related fees: Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit fees." These services include accounting consultations in connection with the Sarbanes-Oxley Act of 2002.
Tax fees: Consist of fees billed for tax compliance, tax advice and tax planning services.
All other fees: Consist of fees billed for all other services other than those reported above.

Therearenostandardarrangementspursuanttowhichourdirectors arecompensatedforanyservices providedasdirector. Noadditional amountsare payableto ourdirectorsfor committee participationor special assignments.

Therearenoarrangements pursuanttowhichanyofourdirectorswascompensatedduringourlast completedfiscalyearortheprevioustwofiscalyearsforanyservicesprovidedasdirector.

TerminationofEmploymentandChangeof ControlArrangement

Therearenocompensatoryplansorarrangements,includingpaymentstobereceived fromthe Company,withrespecttoanypersonnamedintheSummaryCompensation Tablesetoutabove which would in any way result in payments to any suchpersonbecauseofhisresignation,retirement or other terminationof suchperson's employment with the Companyorits subsidiaries,orany change in control of the Company, or a change in theperson'sresponsibilitiesfollowing a change in controlof the Company.

Item12.SecurityOwnershipofCertainBeneficialOwnersand ManagementandRelated StockholderMatters

SecurityOwnershipof CertainBeneficialOwners

Thefollowingtablesetsforththesharesheldby thosepersons whoowned morethanfivepercentof Metwood'scommonstockasofJuly24,2013,based upon15,221,647sharesoutstanding:

GreaterThan 5%Owners

 Title of ClassName and Address of Beneficial Owner No. of Shares Percent of Class
       
 CommonRobert Callahan    
  819 Naff Road    
  Boones Mill, VA 24065  9,501,632(1)62.4%
       
 CommonRonald Shiflett    
  638 Patti Road    
  Rocky Mount, VA 24151 1,000,000 6.6%

(1)Includesdirectandindirect interests.Thereare9,128,600 commonshares includedinthisamount that areowned inthenamesoffamily membersof Mr. Callahan.

SecurityOwnershipof Management

ThefollowingtablesetsforththesharesheldbyMetwooddirectors andofficers asofJuly24,2013:

Management Ownership

 Title of ClassName and Address of Beneficial Owner No. of Shares  Percent of Class 
         
 CommonRobert Callahan 9,501,632(1) 62.4% 
  819 Naff Road      
  Boones Mill, VA 24065      

(1)Includesdirectandindirect interests.Thereare9,128,600 commonshares

included inthisamount thatareownedinthenamesoffamilymembersofMr.Callahan.

Ownershipofsharesby directorsandofficersofMetwoodasagroup: 62.4%

ChangesinControl

Weknowofnocontractualarrangementswhichmayatasubsequentdateresult inachangeofcontrol in theCompany.

Description of Capital Structure

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $ 0.001.

Common Stock

The shares of our common stock presently outstanding, and any shares of our common stock issues upon exercise of common stock purchase options and/or warrants, will be fully paid and non-assessable. Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders. In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding. The common stock has no preemptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.

Voting Rights 

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.

Dividends 

Subject to preferences that may be applicable to any then-outstanding securities with greater rights, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past and does not presently contemplate that there will be any future payment of any dividends on Common Stock.

Amendment to Company’s Articles of Incorporation

On October 1, 2013, the Company filed with the Nevada Secretary of State a Certificate of Amendment to the Company’s Articles of Incorporation. The Amendment was approved by a “Unanimous Written Consent of The Board of Directors of Metwood, Inc.”, on August 6, 2013, pursuant to the authority granted them by a “Written Consent of The Holders of a Majority of the Voting Shares of Metwood, Inc.”, dated August 6, 2013. The information regarding this issue was fully disclosed in the Company’s Form 8-K Report filed on October 2, 2013. The Amendment incorporated the following changes:

a. The total number of shares of "Preferred Stock" that the Corporation is authorized to issue is 40,000,000 shares with a par value of $0.001 per share.

b. Grant to the Board of Directors the full right and authority to increase or otherwise change the authorized shares of common stock and preferred stock without any shareholder action or approval.

Item 13.Certain RelationshipsandRelated Transactions,andDirectorIndependence

FollowingarethetransactionsbetweenMetwoodandmembersofmanagement,directors,officers,5% shareholders,andpromotersofMetwood:

For the years ended June 30, 2013 and 2012, we had sales of $21,455 and $24,231, respectively, to our shareholder and CEO, Robert Callahan. Specifically we contract with a construction company 50% owned by our CEO, Robert Callahan, which provides capital improvements and maintenance work on our buildings and grounds. As of June 30, 2013 and 2012, the related receivable was $0.00 Also, from time to time, we contract with a construction company 50% owned by our CEO, Robert Callahan, which provides capital improvements and maintenance work on our buildings and grounds. Billings for such services during the years ended June 30, 2013 and 2012 were $10,080 and $-0-, respectively.

DuringtheyearendedJune30,2005,weenteredintoasalesandleasebacktransactionwitharelated party.Wesoldthevariousbuildingsatourcorporateheadquarters whichhouseourmanufacturing plants, executive offices and other buildingsfor$600,000 in cash. We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to lease back these same properties for $6,800 per month over a ten-year term expiringDecember31,2014. Rent expense charged tooperationsfor the years endedJune30,2013and2012 was$81,600and$80,600,

 

(22)

PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
NUMBERDESCRIPTION
 3(i)*Articles of Incorporation
  3(ii)*By-Laws
31.1Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2Certification of Chief Financial Officer Pursuant to  Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

WHERE YOU CAN FIND MORE INFORMATION

 

*IncorporateWe file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the website athttp://www.sec.gov. The public may also read and copy any document we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We maintain a website at http://www.energizerresources.com, (which website is expressly not incorporated by reference into this filing). Information contained on our website is not part of this report on Form 8-K, filed February 16, 200010-K.

Item 14.PrincipalAccountingFeesandServices

Thefollowingtablesetsforththeaggregatefeesbilledortobebilledby Bongiovanni &Associates,

CPAs forauditservicesrenderedinconnectionwiththeconsolidatedfinancialstatementsandreportsfor theyearsendedJune30,2013and 2012:

   2013   2012
Audit fees $28,384  $29,124
Audit-related fees  —     —  
Tax fees  —     —  
All other fees  —     —  
        
Total fees $28,384  $29,124

Auditfees:Consistoffeesbilledforprofessionalservicesrenderedfortheauditsofourconsolidated financialstatementsandreviews ofthe interim consolidatedfinancial statements included inquarterly reports and services that are normally provided by our auditors in connectionwith statutory and regulatoryfilingsorengagementsandattestservices, except those not required by statute or regulation.

Audit-related fees:Consistoffeesbilledforassuranceandrelatedservicesthatarereasonablyrelatedto theperformanceoftheauditorreviewofour consolidatedfinancialstatements andarenotreported under"Audit fees." These services include accounting consultations in connectionwith the Sarbanes-Oxley Actof2002.

Tax fees:Consistoffeesbilledfortaxcompliance,taxadviceandtax planningservices.

All other fees:Consistof feesbilledforallother servicesotherthanthosereportedabove.

  

(23)

PART IV

ITEM 15. EXHIBITS AND REPORTS.

SIGNATURESExhibit No.Exhibit
3.1(a)Articles of Incorporation (1)
3.1(b)Amendment to Articles of Incorporation(2)
3.2New Adopted Bylaws (1)
     
 31.1* 
Certification of Chief Executive Officer Pursuant to the requirements of Section 13 or 15(d)302 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.Sarbanes-Oxley Act. (6)(6 (2)
 31.2* 
Date:  October 1, 2012                               By:       /s/  Robert M. Callahan
                                                                                Robert M. Callahan
                                                                                President, CEOCertification of Principal Financial and DirectorAccounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
 32.1* Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2* 
Date:  October 1, 2012                                 By:     /s/  Shawn A. Callahan
                                                                                Shawn A. Callahan
                                                                                Secretary/Treasurer/CFO and DirectorCertification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

*filed herewith

(1)           Incorporated by reference on Form 8-K, filed February 16, 2000.

(2)           Incorporated by reference on Form 8-K, filed October 2, 2013.

(24)

ITEM 15: SIGNATURES

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

Registrant

Date: November 13, 2013

By: 

METWOOD, INC.

/s/ ROBERT M. CALLAHAN

Robert M. Callahan
President and Chief Executive Officer and Director

Date: November 13, 2013

By:

/s/ Shawn A. Callahan

Shawn A. Callahan

Vice President and Chief Financial Officer, Principal Accounting Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: November 13, 2013

By:/s/ ROBERT M. CALLAHAN

Robert M. Callahan

President and Chief Executive Officer and Director  

Date: November 13, 2013

By:/s/ Shawn A. Callahan
Shawn A. Callahan

Vice President and Chief Financial Officer, Principal Accounting Officer and Director