CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
For the Fiscal Year Ended December 31, 2008
KINGDOM KONCRETE, INC.
(Exact name of registrant as specified in its charter)
| Nevada | | 333-138194 | | 20-4672080 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
4232 E. Interstate 30, Rockwall, Texas 75087
(Address of principal executive offices (zip code))
972-771-4205
(Registrant’s telephone number, including area code)
(Former address)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 Act of 1934 during the past 12 months and (2) has been subject to such filing requirement for the past 90days Yes [X] No [ ].
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
| | Large Accelerated Filer [ ]. | Accelerated Filer [ ]. | |
| | | | |
| | Non-Accelerated Filer [ ]. | Smaller Reporting Company [X] | |
Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [ ] No [ X ].
Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 2008: $ -0-
Shares of common stock outstanding at December 31, 2008: 5,441,900
PART I.
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this annual report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this annual report as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. These statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this annual report. Factors that can cause or contribute to these differences include those described under the headings “Risk Factors” and “Management Discussion and Analysis and Plan of Operation.”
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statement you read in this annual report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified in this annual report which would cause actual results to differ before making an investment decision. We are under no duty to update any of the forward-looking statements after the date of this annual report or to conform these statements to actual results.
ITEM 1. DESCRIPTION OF BUSINESS
Kingdom Koncrete, Inc. is a Nevada corporation which was incorporated in 2006 and immediately purchased 100% of the outstanding stock of Kingdom Conctete, Inc., a Texas corporation which was formed on July 18, 2003. The transaction was accounted for as a reverse merger. In this filing, we refer to Kingdom Koncrete, Inc. as “we,” “us”, “the Company” or “Kingdom” unless we specifically state otherwise or the context indicates otherwise. We specialize in providing pre-mixed concrete into our mobile mixer trailers which are then towed by one of our customers to a job site of their choosing. The funds from this offering will allow us to invest in the growth of our company through equipment purchases and advertising as well as possible strategic expansion and acquisition.
Kingdom Concrete serves contractors and homeowners with transit-mix trailers for small-pour concrete jobs. This process saves time, money and labor on a homeowners or small business’ ready-mix cement project.
Kingdom Koncrete, Inc. specializes in providing pre-mixed concrete into our mobile mixer trailers which are then towed by one of our customers to a job site of their choosing. Kingdom Concrete serves contractors and homeowners in NorthTexas with transit-mix trailers for small-pour concrete jobs. This process saves time, money and labor on a homeowners or small business’ ready-mix cement project. Large concrete companies generally don’t like small jobs as they are inherently unprofitable due to the small amount of concrete delivered. In addition, large concrete companies add a delivery fee for less than a full load and additional fees if the load cannot be unloaded immediately. Hand-mixing seems less expensive until all the costs are added up. Sufficient ready-mix sacks for one yard of concrete costs more than $110. Hand mixing is also back-breaking labor that results in an uneven distribution of moisture and aggregate.
We sell concrete on small, manageable, mobile mixing trailers to help complete a smaller project. The result is less cost and a better product. One trailer can mix from ¼ to 1¼ yards for patios, sidewalks, slabs, fence posts or other concrete work. We sell to companies, municipalities, subcontractors and homeowners. Our transit-mix trailers are a completely different concept. In the past, with other types of pre-mixed concrete, the mix would settle out and begin to set as it was being delivered to the job site, giving a limited range and an inferior product that was difficult to work with. Our trailers mix on the way to the job, just like the “big” trucks. The concrete arrives ready for the job.
Our pricing is competitive with hardware store ready-mix sacks and much easier to manage physically. Compared to cement truck prices for small-pours, we provide an economic benefit in that the customer pays only for what they use and need. Pricing is structured on a residential, contractor, and multiple load basis. As of December 31, 2008, our general pricing structure was as follows:
| | 1/4 yard | 1/2 yard | 3/4 yard | 1 yard | 1 1/4 yard |
| 4 bag | $72 | $88 | $105 | $121 | $131 |
| 5 bag | $73 | $92 | $110 | $128 | $146 |
| 6 bag | $74 | $94 | $115 | $134 | $154 |
'4 bag', '5 bag', '6 bag' refer to the proportion of cement in the mix. The higher the bag count, the higher the PSI (strength) of the concrete. We provide flexibility in that a customer can order the appropriate mix for the project, for example:
| · | 5 bag mix: Sidewalks, slabs, or footers |
As of December 31, 2008, we had 5 portable ready-mixed concrete trailers and one batch plant. Our operations consist principally of formulating, preparing and delivering ready-mixed concrete to the trailers at our batch plant in Rockwall Texas. Our marketing efforts primarily target general contractors, developers and home builders whose focus is on price, flexibility, and convenience.
Industry Overview
General
Ready-mixed concrete is a highly versatile construction material that results from combining coarse and fine aggregates, such as gravel, crushed stone and sand, with water, various admixtures and cement. Ready-mixed concrete can be manufactured in thousands of variations, which in each instance may reflect a specific design use. Manufacturers of ready-mixed concrete generally maintain only a few days’ inventory of raw materials and must coordinate their daily materials purchases with the time-sensitive delivery requirements of their customers.
The quality of ready-mixed concrete is time-sensitive, as it becomes difficult to place within 90 minutes after mixing. Many ready-mixed concrete specifications do not allow for its placement beyond that time. Consequently, the market for a permanently installed ready-mixed concrete plant generally is limited to an area within a 25-mile radius of its location. Concrete manufacturers produce ready-mixed concrete in batches at their plants and use mixer and other trucks to distribute and place it at the job sites of their customers. These manufacturers generally do not provide paving or other finishing services, which construction contractors or subcontractors typically perform.
Concrete manufacturers generally obtain contracts through local sales and marketing efforts they direct at general contractors, developers and home builders. As a result, local relationships are very important.
Historically, barriers to the start-up of a new ready-mixed concrete manufacturing operation were low. During the past several years, public concerns about dust, process water runoff, noise and heavy mixer and other truck traffic associated with the operation of ready-mixed concrete plants and their general appearance have made obtaining the permits and licenses required for new plants more difficult. Delays in the regulatory process, coupled with the substantial capital investment that start-up operations entail, have raised the barriers to entry for those operations.
Our Business Strategy
Our objectives are to become the leading provider of ready-mixed concrete in our primary market and to further expand the geographic scope of our business and, on a select basis, to integrate our operations vertically through acquisitions of aggregates supply sources that support our ready-mixed concrete operations. We plan to achieve this objective by continuing to implement our business strategy, which includes the primary elements we discuss below.
Pursuing Disciplined Growth Through Acquisitions
The U.S. ready-mixed concrete industry, with over 2,300 small, independent producers, is a fragmented but increasingly consolidating industry. We believe these industry characteristics present growth opportunities for a company with a focused acquisition program and access to capital.
Our acquisition program targets opportunities for expanding in our existing markets and entering new geographic markets in the U.S. We continually review acquisitions opportunities and are looking for attractive opportunities to strengthen local management, implement cost-saving initiatives, achieve market-leading positions and establish best practices. We cannot provide any assurance, however, as to the impact of any future acquisition we may complete on our future earnings per share.
Improving Marketing and Sales Initiatives
Our marketing strategy emphasizes the sale of value-added products to customers more focused on reducing their in-place building material costs than on the price per cubic yard of the ready-mixed concrete they purchase. We also strive to increase operating efficiencies. We believe that, if we continue to increase in size on both a local and national level, we should continue to experience future productivity and cost improvements in such areas as:
| | • | materials, through procurement and optimized mix designs; |
| | | |
| | • | purchases of mixer trailers and other equipment, supplies, spare parts and tools; |
| | | |
| | • | vehicle and equipment maintenance; and |
| | | |
| | • | insurance and other risk management programs. |
Operations
Our ready-mixed concrete plant consists of a fixed facility that produces ready-mixed concrete in primarily wet batches. Our fixed-plant facilities produce ready-mixed concrete that is transported to a job sites by our mixer trailers.
Our wet batch plant serves a local market that we expect will have consistently high demand as opposed to dry batch plants that will serve markets that we expect will have a less consistent demand. A wet batch plant generally has a higher initial cost and daily operating expense but yields greater consistency with less time required for quality control in the concrete produced and generally has greater daily production capacity than a dry batch plant. The batch operator in a dry batch plant simultaneously loads the dry components of stone, sand and cement with water and admixtures in a mixer truck that begins the mixing process during loading and completes that process while driving to the job site. In a wet batch plant, the batch operator blends the dry components and water in a plant mixer from which the operator loads the already mixed concrete into the mixer trailer which leaves for the job site promptly after loading.
Any future decisions we make regarding the construction of additional plants will be impacted by market factors, including:
| | • | the expected production demand for the plant; |
| | | |
| | • | the expected types of projects the plant will service; and |
| | | |
| | • | the desired location of the plant. |
Mixer trailers slowly rotate their loads en route to job sites in order to maintain product consistency. One of our mixer trailers typically has a load capacity of 1 to 1 1/4 cubic yards, or approximately 6,000 pounds, and an estimated useful life of 15 years. A new trailer of this size currently costs approximately $18,000. As of December 31, 2008 we operate a fleet of 5 mixer trailers, which had an average age of approximately 4.5 years.
Cement and Other Raw Materials
We obtain most of the materials necessary to manufacture ready-mixed concrete on a daily basis. These materials include cement, which is a manufactured product, stone, gravel and sand. Our batch plant typically maintains an inventory level of these materials sufficient to satisfy its operating needs for a few days. Cement represents the highest cost material used in manufacturing a cubic yard of ready-mixed concrete, while the combined cost of the stone, gravel and sand used is slightly less than the cement cost. We purchase each of these materials from several suppliers. We are not dependent on any one supplier. We have not entered into any supply agreements with any of our suppliers.
Marketing and Sales
General contractors typically select their suppliers of ready-mixed concrete. We believe the purchasing decision for many jobs ultimately is relationship-based. Our marketing efforts target general contractors, developers, and homebuilders whose focus is on price, flexibility, and convenience.
Customers
We rely heavily on repeat customers. Our management is responsible for developing and maintaining successful long-term relationships with key customers. We are not dependent on any one customer. Rather, we have built up a customer base which we market to, and these have developed into steady repeat customers.
Competition
The ready-mixed concrete industry is highly competitive. Our competitive position in our market depends largely on the location and operating costs of our ready-mixed concrete plant and prevailing prices in that market. Price is the primary competitive factor among suppliers for small or simple jobs, principally in residential construction, while timeliness of delivery and consistency of quality and service along with price are the principal competitive factors among suppliers for large or complex jobs. Our competitors range from small, owner-operated private companies to subsidiaries or operating units of large, vertically integrated manufacturers of cement and aggregates. Our vertically integrated competitors generally have greater manufacturing, financial and marketing resources than we have, providing them with a competitive advantage. Competitors having lower operating costs than we do or having the financial resources to enable them to accept lower margins than we do will have a competitive advantage over us for jobs that are particularly price-sensitive. Competitors having greater financial resources also may have competitive advantages over us. See “Risk Factors – We may lose business to competitors who underbid us and we may be otherwise unable to compete favorably in our highly competitive industry.”
Employees
We currently employ one employee, the President.
Governmental Regulation and Environmental Matters
A wide range of federal, state and local laws, ordinances and regulations apply to our operations, including the following matters:
| | • | land usage; |
| | | |
| | • | street and highway usage; |
| | | |
| | • | air quality; and |
| | | |
| | • | health, safety and environmental matters. |
In many instances, we are required to have various certificates, permits or licenses to conduct our business. Our failure to maintain these required authorizations or to comply with applicable laws or other governmental requirements could result in substantial fines or possible revocation of our authority to conduct some of our operations. Delays in obtaining approvals for the transfer or grant of authorizations, or failures to obtain new authorizations, could impede acquisition efforts.
Environmental laws that impact our operations include those relating to air quality, solid waste management and water quality. These laws are complex and subject to frequent change. They impose strict liability in some cases without regard to negligence or fault. Sanctions for noncompliance may include revocation of permits, corrective action orders, administrative or civil penalties and criminal prosecution. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances. In addition, businesses may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances, as well as damage to natural resources. These laws also may expose us to liability for the conduct of or conditions caused by others, or for acts that complied with all applicable laws when performed.
We have all material permits and licenses we need to conduct our operations and are in substantial compliance with applicable regulatory requirements relating to our operations. Our capital expenditures relating to environmental matters were not material in 2007. We currently do not anticipate any material adverse effect on our business, financial condition, results of operations or cash flows as a result of our future compliance with existing environmental laws controlling the discharge of materials into the environment.
Insurance:
We are only required to insure the trailers against liability and damage. Additionally, the company maintains hazard insurance on the batch plant property. No claims are outstanding as of December 31, 2008.
Future products and services:
The Company plans to increase the size of its trailer fleet as well as build additional batch plants in strategic locations. No additional services outside of the offering of ready mixed concrete are contemplated at this time.
ITEM 2. DESCRIPTION OF PROPERTY
The Company leases on a month to month basis a 1,250 square foot office warehouse space and a half acre of land at 4232 E. Interstate 30, Rockwall, Texas 75087.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 2008, the Company is not involved in any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 29, 2008, at the annual meeting of shareholders, a majority of our shareholders approved the following actions, all as proposed in our Proxy Statement:
| 1. | To re-elect Ed Stevens as our sole director. |
PART II
| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS |
The common stock was not quoted on any electronic quotation medium during 2008. The stock traded on February 11, 2009 for $0.60
At December 31, 2008, we had approximately 83 record holders of our common stock. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.
Dividends
We have not paid cash dividends on any class of common equity since formation and we do not anticipate paying any dividends on our outstanding common stock in the foreseeable future.
Warrants
The Company has no warrants outstanding.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable for smaller reporting companies.
ITEM 7. MANAGEMENT DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION
SUMMARY OF 2008
REVENUES: Revenues for the twelve months ended December 31, 2008 were $124,802 compared to $107,678 for the twelve months ended December 31, 2007. The increase of 15.9% is due to the increased exposure the Company has received through word-of-mouth reputation and marketing activities. Average selling price increases of about 3% impacted the results meaning volume increased approximately 13% year-over-year.
COST OF SALES: Cost of sales for the twelve months ended December 31, 2008 were $67,855 compared to $55,467 for the twelve months ended December 31, 2007 making the gross profit percentages 45.6% and 48.5% respectively. The decrease in margin is directly related to cost increases (approximately 4% or $5,000) that were partially off-set by an increase in average selling price of about 3% and $4,000.
OPERATING EXPENSES: Total operating expenses for the twelve months ended December 31, 2008 were $102,681 compared to $49,861 for the twelve months ended December 31, 2007. The increase is related to two significant items: 1) Contract services of $34,000 for business development, strategy planning and basic financial assistance and 2) Professional fees were up $15,000 due to higher audit fees and bookkeeping services. The above costs do not include depreciation expense which was $19,829 for the twelve month period ended December 31, 2008 versus $24,700 for the equivalent periods ended December 31, 2007.
We had interest expense of $682 and $2,006 in 2008 and 2007, respectively.
NET LOSS: Net loss for the twelve months ended December 31, 2008 was $63,132 compared to a loss of $24,005 for the twelve months ended December 31, 2007 due to the aforementioned reasons.
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not required for a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2008. This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the annual report on Form 10-K has been made known to them.
Disclosure, controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by in our reports filed under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based upon an evaluation conducted for the period ended December 31, 2008, our Chief Executive and Chief Financial Officer as of December 31, 2008 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:
| · | Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction. |
| · | Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control. |
In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was 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 in the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework at December 31, 2008. Based on its evaluation, our management concluded that, as of December 31, 2008, our internal control over financial reporting was not effective because of limited staff and a need for a full-time chief financial officer. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
| Name | Age | Position |
| Edward Stevens | 53 | Chief Executive Officer, Chief Financial Officer, and Director since December 29, 2006 |
Background of the Director and Executive Officer:
Edward Stevens:
Mr. Stevens graduated from Indiana State University in 1989 with a BS in Electronic Technology. He was a Design Engineer with Grand Transformer, Inc., Plano, Texas from 1989 through 2003 before becoming a Design Engineer with Nova Magnetics, Inc., in Garland, Texas from 2003 to the present where he is still employed on a part time basis. In addition, in 2003 Mr. Stevens started Kingdom Concrete, Inc. which is the subsidiary of Kingdom Koncrete, Inc., being the President of both. Mr. Stevens is at the Kingdom Concrete, Inc. plant six days a week and spends approximately six hours on any given day on Kingdom Concrete, Inc. affairs. He spends approximately two hours a day working on projects for Nova Magnetics, Inc. out of the Kingdom Concrete offices.
ITEM 11. EXECUTIVE COMPENSATION
Following is what our officers received in 2008 and 2007 as compensation.
| Name | Capacity Served | Aggregate Remuneration |
| Edward Stevens | Chief Executive Officer, Chief Financial Officer, and Director | 2008: $0 2007: $0 |
As of the date of this filing, our sole officer is our only employee. We have no employment agreements with any officer, director or employee.
| ITEM 12. | SECURITY OWNERSHIP OF MANANGEMENT AND BENEFICIAL OWNERS |
As of December 31, 2008 the following persons are known to the Company to own 5% or more of the Company's Voting Stock:
| Title / Relationship to Issuer | Name of Owner | Number of Shares Owned | Percent of Total |
| Chief Executive Officer, Chief Financial Officer, and Director | Edward Stevens | 4,650,000 | 85.45 |
| | | | |
| | | | |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTION |
As of the date of this filing, there are no other agreements or proposed transactions, whether direct or indirect, with anyone, but more particularly with any of the following:
| · | a director or officer of the issuer; |
| · | any principal security holder; |
| · | any promoter of the issuer; |
| · | any relative or spouse, or relative of such spouse, of the above referenced persons. |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
(1) AUDIT FEES
The aggregate fees billed for professional services rendered by our auditors, for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements was $8,500 and $12,500 for the years ended December 31, 2008 and 2007, respectively.
(2) AUDIT-RELATED FEES
The aggregate fees billed for professional services rendered by our auditors, for the registrant’s quarterly financial statements and review of the unaudited financial statements included in the registrant’s Form 10-Q was $6,000 and $0 for the years ended December 31, 2008 and 2007, respectively.
(3) TAX FEES
NONE
(4) ALL OTHER FEES
NONE
(5) AUDIT COMMITTEE POLICIES AND PROCEDURES
Audit Committee Financial Expert
The Securities and Exchange Commission has adopted rules implementing Section 407 of the Sarbanes-Oxley Act of 2002 requiring public companies to disclose information about “audit committee financial experts.” As of the date of this Annual report, we do not have a standing Audit Committee. The functions of the Audit Committee are currently assumed by our Board of Directors. Additionally, we do not have a member of our Board of Directors that qualifies as an “audit committee financial expert.” For that reason, we do not have an audit committee financial expert.
(6) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
Not applicable.
| ITEM 15. | EXHIBITS, FINANICAL STATEMENTS AND REPORTS ON FORM 8-K |
(a) The following documents are filed as part of this report: Included in Part II, Item 7 of this report:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2008 and 2007
Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007
Consolidated Statement of Changes in Stockholders’ Equity for the Years Ended December 31, 2008 and 2007
Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007
Notes to the Consolidated Financial Statements
(b) The Company filed one Form 8-K’s in 2008. On January 8, 2008, the Company announced that its July 27, 2007 Registration statement on Form SB-1 filed with the U.S. Securities and Exchange Commission became effective. Under the SB-1, we offered for sale a minimum of 150,000 shares at $0.50 per share or $75,000 and a maximum of 1,000,000 shares at $0.50 or $500,000. On November 5, 2007, we had raised $87,000 which we then deposited in our account in accordance with the terms of our Registration Statement. All additional funds we raise will be deposited directly into our bank account.
(c) Exhibits
| No. | Description |
| 31.1 | Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned hereunto duly authorized.
KINGDOM KONCRETE, INC.
By: /s/ Edward Stevens
Edward Stevens
Chief Executive Officer & Chief Financial Officer
Dated: March 26, 2009
KINGDOM KONCRETE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
TABLE OF CONTENTS
| Report of Independent Registered Public Accounting Firm | F-2 |
| Consolidated Balance Sheets as of December 31, 2008 and 2007 | F-3 |
| Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007 | F-4 |
| Consolidated Statement of Changes in Stockholders’ Equity for the Years Ended December 31, 2008 and 2007 | F-5 |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007 | F-6 |
| Notes to the Consolidated Financial Statements | F-7 to F-11 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Management of
Kingdom Koncrete, Inc.
Rockwall, Texas
We have audited the accompanying consolidated balance sheets of Kingdom Koncrete, Inc. as of December 31, 2008 and 2007 and the related consolidated statements of operations, cash flows and stockholders’ equity for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these financial statements in accordance with the 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
We were not engaged to examine management’s assertion about the effectiveness of Kingdom Koncrete, Inc.’s internal control over financial reporting as of December 31, 2008 and 2007 and, accordingly, we do not express an opinion thereon.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Kingdom Koncrete, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has suffered significant losses and will require additional capital to develop its business until the Company either (1) achieves a level of revenues adequate to generate sufficient cash flows from operations; or (2) obtains additional financing necessary to support its working capital requirements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ The Hall Group, CPAs
The Hall Group, CPAs
Dallas, Texas
March 21, 2008
KINGDOM KONCRETE, INC.
Consolidated Balance Sheets
December 31, 2008 and 2007
| | | 2008 | | | 2007 | |
| | | | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Current Assets | | | | | | |
| Cash and Cash Equivalents | | $ | 125,926 | | | $ | 82,099 | |
| Inventory | | | 250 | | | | 896 | |
| Total Current Assets | | | 126,176 | | | | 82,995 | |
| | | | | | | | | |
| Fixed Assets | | | | | | | | |
| Equipment | | | 156,406 | | | | 141,406 | |
| Leasehold Improvements | | | 7,245 | | | | 7,245 | |
| Office Equipment | | | 675 | | | | 675 | |
| Less: Accumulated Depreciation | | | (123,521 | ) | | | (103,692 | ) |
| Total Fixed Assets | | | 40,805 | | | | 45,634 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 166,981 | | | $ | 128,629 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts Payable | | $ | 4,305 | | | $ | 8,322 | |
| Accrued Expenses | | | 1,570 | | | | 1,640 | |
| Advances from Shareholder | | | 108,656 | | | | 111,556 | |
| Current Portion of Long Term Note Payable | | | 10,337 | | | | 12,600 | |
| Total Current Liabilities | | | 124,868 | | | | 134,118 | |
| | | | | | | | | |
| Long Term Liabilities | | | | | | | | |
| Notes Payable | | | 10,337 | | | | 23,366 | |
| Less: Current Portion | | | (10,337 | ) | | | (12,600 | ) |
| Total Long Term Liabilities | | | 0 | | | | 10,766 | |
| Total Liabilities | | | 124,868 | | | | 144,884 | |
| | | | | | | | | |
| Stockholders' Equity (Deficit) | | | | | | | | |
| Common Shares, $.001 par value, 50,000,000 shares authorized, | | | | | | | | |
| 5,441,900 and 5,199,500 shares issued and outstanding | | | 5,442 | | | | 5,199 | |
| Additional Paid-In Capital | | | 240,362 | | | | 119,105 | |
| Retained Earnings (Deficit) | | | (203,691 | ) | | | (140,559 | ) |
| Total Stockholders' Equity (Deficit) | | | 42,113 | | | | (16,255 | ) |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 166,981 | | | $ | 128,629 | |
The Accompanying Notes are an Integral Part of these Consolidated Financial Statements.
KINGDOM KONCRETE, INC.
Consolidated Statements of Operations
For the Years Ended December 31, 2008 and 2007
| | | 2008 | | | 2007 | |
| | | | | | | |
| REVENUES | | $ | 124,802 | | | $ | 107,678 | |
| COST OF SALES | | | 67,855 | | | | 55,467 | |
| GROSS PROFIT | | | 56,947 | | | | 52,211 | |
| | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | |
| Depreciation & Amortization | | | 19,829 | | | | 24,700 | |
| Advertising | | | 3,240 | | | | 2,339 | |
| General and Administrative | | | 99,441 | | | | 47,522 | |
| TOTAL OPERATING EXPENSES | | | 122,510 | | | | 74,561 | |
| | | | | | | | | |
| NET OPERATING (LOSS) | | | (65,563 | ) | | | (22,350 | ) |
| | | | | | | | | |
| OTHER INCOME (EXPENSE) | | | | | | | | |
| Interest Income | | | 3,113 | | | | 351 | |
| Interest Expense | | | (682 | ) | | | (2,006 | ) |
| TOTAL OTHER INCOME (EXPENSE) | | | 2,431 | | | | (1,655 | ) |
| | | | | | | | | |
| NET (LOSS) BEFORE INCOME TAXES | | | (63,132 | ) | | | (24,005 | ) |
| Provision for Income Taxes (Expense) Benefit | | | 0 | | | | 0 | |
| | | | | | | | | |
| NET (LOSS) | | $ | (63,132 | ) | | $ | (24,005 | ) |
| | | | | | | | | |
| EARNINGS PER SHARE, basic and diluted | | | | | | | | |
| | | | | | | | | |
| Weighted Average of Outstanding Shares | | | 5,387,823 | | | | 5,028,405 | |
| Income (Loss) per Share | | $ | (0.01 | ) | | $ | (0.00 | ) |
The Accompanying Notes are an Integral Part of these Consolidated Financial Statements.
KINGDOM KONCRETE, INC.
Consolidated Statement of Changes in Stockholders’ Equity
For the Years Ended December 31, 2008 and 2007
| | | | | | | | | | | | Retained | | | | |
| | | Common Stock | | | Paid-In | | | Earnings | | | | |
| | | Shares | | | Amount | | | Capital | | | (Deficit) | | | Totals | |
| | | | | | | | | | | | | | | | |
| Stockholders' Equity (Deficit) at January 1, 2006 | | | 5,000,000 | | | $ | 5,000 | | | $ | 19,554 | | | $ | (82,503 | ) | | $ | (57,949 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net (Loss) | | | | | | | | | | | | | | | (34,051 | ) | | | (34,051 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Stockholders' Equity (Deficit) at January 1, 2007 | | | 5,000,000 | | | $ | 5,000 | | | $ | 19,554 | | | $ | (116,554 | ) | | $ | (92,000 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Issuance of Common Stock for Cash | | | 199,500 | | | | 199 | | | | 99,551 | | | | | | | | 99,750 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net (Loss) | | | | | | | | | | | | | | | (24,005 | ) | | | (24,005 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Stockholders' Equity (Deficit) at December 31, 2007 | | | 5,199,500 | | | $ | 5,199 | | | $ | 119,105 | | | $ | (140,559 | ) | | $ | (16,255 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Issuance of Common Stock for Cash | | | 220,400 | | | | 221 | | | | 110,279 | | | | | | | | 110,500 | |
| | | | | | | | | | | | | | | | | | | | | |
| Issuance of Common Stock for Services | | | 22,000 | | | | 22 | | | | 10,978 | | | | | | | | 11,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net (Loss) | | | | | | | | | | | | | | | (63,132 | ) | | | (63,132 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Stockholders' Equity (Deficit) at December 31, 2008 | | | 5,441,900 | | | $ | 5,442 | | | $ | 240,362 | | | $ | (203,691 | ) | | $ | 42,113 | |
The Accompanying Notes are an Integral Part of these Consolidated Financial Statements.
KINGDOM KONCRETE, INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2008 and 2007
| | | 2008 | | | 2007 | |
| | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
| Net Income (Loss) | | $ | (63,132 | ) | | $ | (24,005 | ) |
| Adjustments to reconcile net income to net cash | | | | | | | | |
| provided by operating activities: | | | | | | | | |
| Depreciation & Amortization | | | 19,829 | | | | 24,700 | |
| Shares Issued in Exchange for Services | | | 11,000 | | | | 0 | |
| (Increase) Decrease in Inventory | | | 646 | | | | (896 | ) |
| (Decrease) in Accounts Payable | | | (4,017 | ) | | | (11,094 | ) |
| Increase (Decrease) in Accrued Expenses | | | (70 | ) | | | 1,640 | |
| Net Cash (Used) by Operating Activities | | | (35,744 | ) | | | (9,655 | ) |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Purchase of Fixed Assets | | | (15,000 | ) | | | 0 | |
| Net Cash (Used) by Investing Activities | | | (15,000 | ) | | | 0 | |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Payments on Notes | | | (13,029 | ) | | | (12,188 | ) |
| Payments on Shareholder Advance | | | (2,900 | ) | | | (1,700 | ) |
| Proceeds from Sale of Common Stock | | | 110,500 | | | | 99,750 | |
| Net Cash Provided by Financing Activities | | | 94,571 | | | | 85,862 | |
| | | | | | | | | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | | | 43,827 | | | | 76,208 | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | | | 82,099 | | | | 5,891 | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | | $ | 125,926 | | | $ | 82,099 | |
| | | | | | | | | |
| SUPPLEMENTAL DISCLOSURES | | | | | | | | |
| | | | | | | | | |
| Cash Paid During the Year for Interest Expense | | $ | 682 | | | $ | 2,006 | |
| Shares Issued in Exchange for Services | | $ | 11,000 | | | $ | 0 | |
The Accompanying Notes are an Integral Part of these Consolidated Financial Statements.
KINGDOM KONCRETE, INC.
Notes to the Consolidated Financial Statements
December 31, 2008 and 2007
NOTE 1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities, History and Organization:
Kingdom Koncrete, Inc. (The “Company”) operates a ‘carry and go’ concrete business. The Company is located in Rockwall, Texas and was incorporated on August 22, 2006 under the laws of the State of Nevada.
Kingdom Koncrete Inc. is the parent company of Kingdom Concrete, Inc. (“Kingdom Texas”), a company incorporated under the laws of the State of Texas. Kingdom Texas was established in 2003 and for the past three years has been operating a single facility in Texas.
On August 22, 2006, Kingdom Koncrete, Inc. ("Koncrete Nevada"), a private holding company established under the laws of Nevada, was formed in order to acquire 100% of the outstanding common stock of Kingdom Texas. On June 30, 2006, Koncrete Nevada issued 5,000,000 shares of common stock in exchange for a 100% equity interest in Kingdom Texas. As a result of the share exchange, Kingdom Texas became the wholly owned subsidiary of Koncrete Nevada. As a result, the shareholders of Kingdom Texas owned a majority of the voting stock of Koncrete Nevada. The transaction was regarded as a reverse merger whereby Kingdom Texas was considered to be the accounting acquirer as its shareholders retained control of Koncrete Nevada after the exchange, although Koncrete Nevada is the legal parent company. The share exchange was treated as a recapitalization of Koncrete Nevada. As such, Kingdom Texas (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if Koncrete Nevada had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital stock.
Significant Accounting Policies:
The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements.
The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.
Basis of Presentation:
The Company prepares its financial statements on the accrual basis of accounting. All intercompany balance and transactions are eliminated. Investments in subsidiaries are reported using the equity method.
Cash and Cash Equivalents:
Cash and cash equivalents includes cash in banks with original maturities of three months or less are stated at cost which approximates market value, which in the opinion of management, are subject to an insignificant risk of loss in value.
Inventory:
Inventory is comprised of gravel, the primary raw material used to make concrete. The Company uses the weighted average method for inventory tracking and valuation and calculates inventory at each month end. Inventory is stated at the lower of cost or market value.
Fair Value of Financial Instruments:
In accordance with the reporting requirements of Statement of Financial Accounting Standards (“SFAS”) No. 107, “Disclosures About Fair Value of Financial Instruments” (SFAS No. 107), the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this statement and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. At December 31, 2008, the Company did not have any financial instruments other than cash and cash equivalents.
Property and Equipment:
Property and equipment are stated at cost less accumulated depreciation. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation is computed by applying the straight-line method over the estimated useful lives which are generally five to seven years.
Revenue Recognition:
The Company recognizes revenue from the sale of products in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"). Revenue will be recognized only when all of the following criteria have been met:
| · | Persuasive evidence of an arrangement exists; |
| · | Ownership and all risks of loss have been transferred to buyer, which is generally upon shipment; |
| · | The price is fixed and determinable; and |
| · | Collectibility is reasonably assured. |
Revenue is recorded net of any sales taxes charged to customers.
Cost of Goods Sold:
Cost of Goods Sold consists primarily of gravel, which is used to make concrete. Due to large space requirements, the Company orders gravel approximately every four to six weeks and expenses all purchases when made. At each month end, the Company approximates the amount of gravel remaining and capitalizes it as inventory based upon the weighted average method.
Advertising:
Advertising costs are expensed as incurred. These expenses were $3,240 and $2,339 for the years ended December 31, 2008 and 2007, respectively.
Income Taxes:
Income from the corporation is taxed at regular corporate rates per the Internal Revenue Code. There are no provisions for current taxes due to net available operating losses.
Earnings per Share:
Earnings per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered. As the Company has no potentially dilutive securities, fully diluted earnings per share is equal to earnings per share (basic).
Reclassification:
Certain prior year amounts have been reclassified in the consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows to conform to current period presentation. These reclassifications were not material to the consolidated financial statements and had no effect on net earnings reported for any period.
Recent Accounting Pronouncements:
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2 – FIXED ASSETS
Fixed assets at December 31, 2008 and 2007 are comprised of the following:
| | | 2008 | | | 2007 | |
| | | | | | | |
| Equipment | | $ | 156,406 | | | $ | 141,406 | |
| Leasehold Improvements | | | 7,245 | | | | 7,245 | |
| Office Equipment | | | 675 | | | | 675 | |
| Less: Accumulated Depreciation | | | (123,521 | ) | | | (103,692 | ) |
| | | | | | | | | |
| Total Fixed Assets | | $ | 40,805 | | | $ | 45,634 | |
Depreciation expense was $19,829 and $24,700 for the years ended December 31, 2008 and 2007, respectively.
NOTE 3 – ADVANCE FROM SHAREHOLDER
The Company is obligated to a shareholder for funds advanced to the Company for start up expenses and working capital. The advances are unsecured and are to be paid back as the Company has available funds to do so. No interest rate or payback schedule has been established. There has been no interest paid on these advances. As there is no defined payback period, no interest has been imputed.
NOTE 4 – NOTES PAYABLE
| The Company acquired machinery and equipment through an SBA loan on September 12, 2003 in the amount of $70,000 with an interest rate of 6.59%. The monthly payment is $1,183 including principal and interest for 72 months, due August 12, 2009. The remaining balance at December 31, 2008 is $10,337, all of which is current. |
Interest expense was $682 and $2,006 for the years ended December 31, 2008 and 2007, respectively.
NOTE 5 – EQUITY
The Company is authorized to issue 50,000,000 common shares at a par value of $0.001 per share. These shares have full voting rights.
The Company issued 220,400 common shares during 2008 at a price of $.50 per share. The Company issued 22,000 common shares for consulting services that were rendered.
At December 31, 2008 there were 5,441,900 common shares outstanding. There are no stock option plans or outstanding warrants as of December 31, 2008.
NOTE 6 – INCOME TAXES
The Company has adopted SFAS No. 109, which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset). Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The cumulative tax effect at the expected tax rate of 25% of significant items comprising the Company’s net deferred tax amounts as of December 31, 2008 and 2007 are as follows:
| | | 2008 | | | 2007 | |
| Net Operating Loss Carryforward | | $ | 50,923 | | | $ | 35,140 | |
| Less: Valuation Allowance | | | (50,923 | ) | | | (35,140 | ) |
| Net Deferred Tax Asset | | $ | 0 | | | $ | 0 | |
The net deferred tax asset generated by the loss carryforward has been fully reserved. The cumulative net operating loss carry-forward is approximately $203,691 at December 31, 2008, and will expire in the years 2025 through 2028.
The realization of deferred tax benefits is contingent upon future earnings and is fully reserved at December 31, 2008.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
The Company leases an office and operational facilities on a month to month basis. Rent expense was $12,900 and $12,600 for the years ended December 31, 2008 and 2007.
NOTE 8 – FINANCIAL CONDITION AND GOING CONCERN
Kingdom Koncrete, Inc. has an accumulated deficit through December 31, 2008 totaling $203,691 and recurring losses from operations. Because of this accumulated loss, Kingdom Koncrete, Inc. will require additional working capital to develop its business operations. The Company intends to raise additional working capital either through private placements, public offerings, bank financing and/or shareholder funding. There are no assurances that Kingdom Koncrete, Inc. will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings, bank financing and/or shareholder funding necessary to support Kingdom Koncrete, Inc.'s working capital requirements. To the extent that funds generated from any private placements, public offerings, bank financing and/or shareholder funding are insufficient, Kingdom Koncrete, Inc. will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to Kingdom Koncrete, Inc. If adequate working capital is not available Kingdom Koncrete, Inc. may not be able to continue its operations.
Management believes that the efforts it has made to promote its business will continue for the foreseeable future. These conditions raise substantial doubt about Kingdom Koncrete, Inc.'s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should Kingdom Koncrete, Inc. be unable to continue as a going concern.
