Muskoka Flooring (MSKA) 10-Q/A 2009 Q1 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended: March 31, 2009

or

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

For the transition period from ________________ to __________________

Commission File Number 333-148256

MUSKOKA FLOORING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1 Rue de Hesse, 1204 Geneva Switzerland	N/A
(Address of principal executive offices)	(Zip Code)

+41 22 328 7588

(Registrant’s telephone number, including area code)

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 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.

Large accelerated filer  ¨	Accelerated filer ¨
Non-accelerated filer ¨  (Do not check if a smaller reporting Company)	Smaller reporting Company x

Indicate by check mark whether the registrant is a shell Company (as defined in rule 12b-2 of the Exchange Act).

Yes x No ¨

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  As of May 22, 2009, the registrant had 1,482,500 shares of common stock, $0.0001 par value, issued and outstanding.

TABLE OF CONTENTS

	Page
	Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements – Unaudited	3
Balance Sheets as of March 31, 2009 and December 31, 2008	4
Statements of Operations for the three months ended March 31, 2009 and the three months ended March 31, 2008 and cumulative results from inception (July 20, 2005) to March 31, 2009	5
Statement of Stockholders Equity (Deficit) cumulative from inception (July 20, 2005) to March 31, 2009	6
Statements of Cash Flows for the three months ended March 31, 2009 and for the three months ended March 31, 2008; and cumulative results from July 20, 2005 (date of inception) to March 31, 2009	7
Notes to Financial Statements	8
Item 2. Management's Discussion and Analysis and Plan of Operation	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	10
Item 4T. Controls and Procedures	11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	12
Item 1A. Risk Factors	12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3. Defaults Upon Senior Securities	13
Item 4. Submission of Matters to a Vote of Security Holders	13
Item 5. Other Information	13
Item 6. Exhibits	13

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)

FINANCIAL STATEMENTS

MARCH 31, 2009

BALANCE SHEETS	4
STATEMENTS OF OPERATIONS	5
STATEMENTS OF STOCKHOLDERS’ EQUITY	6
STATEMENTS OF CASH FLOWS	7
NOTES TO FINANCIAL STATEMENTS	8

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)

BALANCE SHEETS

	March 31, 2009			December 31, 2008 (Audited)
ASSETS
CURRENT ASSETS
Cash	$	353		$	353
Prepaid Expense		500			500
Total Current Assets		853			853
TOTAL ASSETS	$	853		$	853
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	6,430		$	12,930
Due to related party (note 3)		-			6,209
Total Current Liabilities		6,430			19,139
TOTAL CURRENT LIABILITIES	$	6,430		$	19,139
STOCKHOLDERS’ EQUITY (DEFICIT )
Common stock
Authorized
75,000,000 shares of common stock, $0.0001 par value,
Issued and outstanding
1,482,500 shares of common stock		148			148
Additional paid in capital		29,327			29,327
Deficit accumulated during the development stage		(35,052	)		(47,761	)
Total Equity		(5,577	)		(18,286	)
TOTAL LIABILITIES & EQUITY	$	853		$	853

The accompanying notes are an integral part of these financial statements

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)

STATEMENTS OF OPERATIONS

	Three months ended March 31, 2009		Three Months  ended March 31, 2008,			Cumulative results of operations from July 20, 2005 (date of inception) to March 31, 2009
REVENUE
Revenue		-		-			-
EXPENSES
Office and general	$	6,209	$	(2,601	)	$	(1,443	)
Exchange		-		-			100
Professional fees		6,500		(2,949	)		(33,709	)
Net Profit/(loss) before Income Taxes	$	12,709	$	(5,550	)	$	(35,052	)
Provision for Income Taxes		-		-			-
NET PROFIT/(LOSS)	$	12,709	$	(5,550	)	$	(35,052	)
BASIC AND DILUTED NET PROFIT/(LOSS) PER SHARE	$	0.02	$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		1,482,500		1,482,500

The accompanying notes are an integral part of these financial statements

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)

 STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FROM INCEPTION (July 20, 2005) TO MARCH 31, 2009

	Common Stock				Additional		Share			Deficit Accumulated During the
	Number of shares		Amount		Paid-in Capital		Subscription Receivable			Development Stage			Total
Balance at inception on, July 20, 2005		-	$	-	$	-	$	-		$	-		$	-
Net Loss, December 31, 2005		-		-		-		-			(977	)		(977	)
Common stock issued for cash at $0.015 per share, December 8, 2005		171,600		17		2,557								2,574
Balance, December 31, 2005		171,600	$	17	$	2,557		-			(977	)	$	1,597
Net Loss, December 31, 2006		-		-		-		-			(13,196	)		(13,196	)
Common stock issued for cash at $0.015 per share, February 28, 2006		828,400		83		12,343		(2,557	)					9,869
Common stock issued for cash at $0.030 per share,  October 31, 2006		482,500		48		14,427		14,475	)					-
Balance, December 31, 2006		1,482,500	$	148	$	29,327	$	(17,032	)		(14,173	)	$	(1,730	)
Net loss December 31, 2007		-		-		-		-			(15,457	)		(15,457	)
Subscriptions received, December 31, 2007								17,032						17,032
		-		-		-		-
Balance, December 31, 2007 (Audited)		1,482,500	$	148	$	29,327	$	-		$	(29,630	)	$	(155	)
Net loss December 31, 2008		-		-		-		-			(18,131	)		(18,131	)
Balance, December 31, 2008 (Audited)		1,482,500	$	148	$	29,327	$	-		$	(47,761	)	$	(18,286	)
Net Profit March 31, 2009		-		-		-		-			12,709			12,709
Balance, March 31, 2009		1,482,500	$	148	$	29,327	$	-		$	(35,052	)	$	(5,577	)

The accompanying notes are an integral part of these financial statements

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)

 STATEMENTS OF CASH FLOWS

	Three months ended March 31, 2009			Three months ended March 31, 2008			Cumulative results of operations from inception (July 20, 2005) to March 31, 2009
OPERATING ACTIVITIES
Net Profit/(loss)	$	12,709		$	(5,549	)	$	(35,052	)
Exchange Gain		-			-			-
Adjustment to reconcile net loss to net cash used in operating activities
- accrued liabilities		(6,500	)		923			6,430
- prepaid expense		-			950			(500	)
- shareholder loan		(6,209	)		-			-
NET CASH USED IN OPERATING ACTIVITIES		-			(3,676	)		(29,122	)
INVESTING ACTIVITIES		-			-			-
FINANCING ACTIVITIES
Proceeds from sale of common stock		-			3,023			29,475
NET CASH PROVIDED BY FINANCING ACTIVITIES		-			3,023			29,475
NET INCREASE (DECREASE) IN CASH		-			(653	)		353
CASH, BEGINNING OF PERIOD		353			7,292			-
CASH, END OF PERIOD	$	353		$	6,639		$	353
NON-CASH ACTIVITIES
Stock issued for services	$	-		$	-		$	-
Stock issued for accounts payable	$	-		$	-		$	-
Stock issued for notes payable	$	-		$	-		$	-
Stock issued for convertible debentures and interest	$	-		$	-		$	-
Convertible debentures issued for services	$	-		$	-		$	-
Warrants issued	$	-		$	-		$	-
Stock issued for penalty on default of  convertible debenture	$	-		$	-		$	-
Note payable issued for finance charges	$	-		$	-		$	-
Forgiveness of debt	$	-		$	-		$	-
Stock issued for investment.	$	-		$	-		$	-
Supplemental cash flow information.
Cash paid for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-

The accompanying notes are an integral part of these financial statements

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MUSKOKA FLOORING CORPORATION

(A Development Stage Company)
 

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2009, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2008 audited financial statements.  The results of operations for the periods ended March 31, 2009 and 2008 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 - RELATED PARTY TRANSACTIONS

Mr. Cotton, the former officer, director and principal stockholder of the Company, forgave the $6,209 due to him.

WellGate International Ltd., the principal stockholder of the Company, has promised to contribute to capital $10,000, due June 30th 2009.

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Item 2: Management Discussion and Analysis or Plan of Operation

Overview

Muskoka Flooring Corporation ("Muskoka", the “Company”, “we”, “us, or “our”) was incorporated on July 20, 2005. Muskoka is a development stage corporation intending to enter into the business of importing hardwood flooring materials from around the world and reselling our products in the United States and Canada. Muskoka will not manufacture any equipment or goods, but will resell hardwood flooring and related products from various manufacturers through our proposed website.

The Company has not generated any revenues from inception or in the quarter ended March 31, 2009

Total expenses for the three months ending March 31, 2009 were $12,709 resulting in an operating profit for the quarter of $12,709. The operating profit for the period is a result of credits issued to the Company for professional fees.

As at the fiscal quarter ended March 31, 2009 the Company had $ 353 of cash on hand.

Our auditors have issued a going concern opinion.  This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.  This is because we have not generated any revenues and no revenues are anticipated until we begin operations.  Our only other source of cash at this time is cash advances from our Director.

We anticipate that our current cash and cash equivalents will be insufficient to satisfy our liquidity requirements for the next 12 months. We expect to incur development and administrative expenses as well as professional fees as we initiate our business plan and other expenses associated with maintaining our SEC filings. WellGate International Ltd., the principal stockholder of the Company, has promised to contribute to capital of the Company a $10,000 note, payable June 30th, 2009.

Plan of Operation

Muskoka intends to sell a full line of hardwood flooring products, materials, tools and accessories through our internet website.  We will not manufacture any equipment or goods but will instead resell hardwood flooring products from various manufacturers. Our plan is to offer for sale a variety of exotic hardwood flooring imported from Asia, South America and other regions of the world along with protective coatings, tools, materials and accessories commonly used in the installation and maintenance of hardwood floors.  We plan to sell these products via our website, www.muskokaflooring.net.

Our current cash and cash equivalents and cash generated from operations, if any, will be insufficient to satisfy our liquidity requirements for at least the next 12 months. We will require additional funds prior to commencing our business and we will seek to obtain additional capital through private equity placements, debt or alternative sources of financing. If we are unable to obtain sufficient additional funding we may be required to reduce the scope of our business plan, which could harm our business, financial condition and operating results.

There can be no assurance that we will be successful in raising additional money, and thus be able to satisfy our future cash requirements, which primarily consist of working capital directed towards the development of our website and marketing campaigns as well as legal and accounting fees and other expenses associated with maintaining our SEC filings.  There can be no assurance that we will be successful in raising the capital we require. Management believes that if our financing activities are successful, we will be able to generate sufficient revenue from online sales of our hardwood flooring goods and products and achieve liquidity within the following twelve to fourteen months thereof. However this is based upon speculation and there can be no assurance that Muskoka will ever be able reach a level of profitability.

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Over the next 12 months, we intend to become operational by completing the development of the website which is estimated to cost approximately $4,500 and allocating approximately $1,000 towards the initial phases of our marketing plan.

We plan to establish purchasing agreements with various manufacturers and arrange for the importation and delivery of product on a per sale basis to avoid the cost of holding inventory.  As purchasing agreements are established we will add their product lines to our website.

Once the website is completed we plan to implement a marketing campaign specifically directed at potential buyers in order to bring traffic to our website.  We intend to engage a third party service provider who specializes in attracting traffic to websites.  We expect the cost of this service to be between $200 and $300 per month for every 50,000 visitors.

We have also allocated $4,000 towards administrative expenses, which includes general fees to maintain the corporate status of the Company, Transfer Agent fees, and telephone/postage/printing expenses, as well as any contingencies.

Off Balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting Company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

-  Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

- 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 and directors of the Company; and

- 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

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As of March 31, 2009 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.  This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes.  The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of March 31, 2009.

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results.  However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Item 4T. Controls and Procedures

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

As of March 31, 2009 management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements as of March 31, 2009 and communicated the matters to our management.

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Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can result in the Company's determination to its financial statements for the future years.

We are committed to improving our financial organization. As part of this commitment, we will create a position to  segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the Company may encounter in the future.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the registrants last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

No director, officer, or affiliate of the Company and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

        None.

Item 3. Defaults Upon Senior Securities

        None.

Item 4. Submission of Matters to a Vote of Security Holders

        None.

Item 5. Other Information

       None.

Item 6. Exhibits

3.1  Articles of Incorporation [1]

3.2  By-Laws [1]

31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer

31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer *

32.1 Section 1350 Certification of Chief Executive Officer

32.2 Section 1350 Certification of Chief Financial Officer **

[1] Filed previously with the Commission on December 21, 2007

*     Included in Exhibit 31.1

**   Included in Exhibit 32.1

SIGNATURES

Pursuant to the requirements of the Exchange Act or 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Muskoka Flooring Corporation
BY:	/s/ Michel Marengere
	Michel L. Marengere
	President, Secretary Treasurer, Principal Executive Officer,
	Principal Financial Officer and Director
	Dated:  June 5, 2009

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