UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(AMENDMENT #1)
______________________
MUSKOKA FLOORING CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware
______________________________________________________________
(State or other jurisdiction of incorporation or organization)
5211
________________________________________________________
(Primary Standard Industrial Classification Code Number)
N/A
_______________________________________
(I.R.S. Employer Identification Number)
2711 Centerville Road, Suite 400
Wilmington, DE 19808
(705) 794-9481
________________________________________________________________
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Gordon Cotton
P.O. Box 293
33 Card Avenue
Perkinsfield, Ontario Canada L0L 2JO
(705) 794-9481
Fax: (905) 949-0601
_________________________________________________________
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
As soon as practical after the effective date of this registration statement
____________________________________________________________________________
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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 [ ] (Do not use if a smaller reporting company)
Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Title of Each Offering Price Proposed Maximum Amount of
Class of Securities Amount to be Per Unit Aggregate Registration
to be Registered Registered (1) Offering Price Fee [2]
___________________________________________________________________________________________________
Common Stock by Selling 482,500 $0.05 $ 24,100 $ 2.57
Security Shareholders
<FN>
[1] The offering price has been arbitrarily determined by Muskoka Flooring
Corporation and bears no relationship to assets, earnings, or any other
valuation criteria. No assurance can be given that the shares offered hereby
will have a market value or that they may be sold at this, or at any price.
[2] Estimated solely for the purpose of calculating the registration fee based
on Rule 457(o).
</FN>
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
2
PROSPECTUS
MUSKOKA FLOORING CORPORATION
SHARES OF COMMON STOCK
482,500 SHARES OF COMMON STOCK BEING SOLD BY SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering 482,500 shares of
common stock for sale to the public through this prospectus at the price of
$0.05 per share. The offering price has been arbitrarily determined by Muskoka
Flooring Corporation and bears no relationship to assets, earnings, or any other
valuation criteria. Our common stock is presently not traded on any market or
securities exchange.
The company may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective.
The following table sets forth the information for the share offering:
UNDERWRITING
PRICE DISCOUNTS OR PROCEEDS
TO PUBLIC COMMISSIONS TO COMPANY
_________ ____________ __________
Per share (Offered by
Certain Selling
Shareholders) $ 0.05 None None
Total shares offered by
Certain Selling
Shareholders
482,500 $24,100 None None
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A
HIGH DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 7-12.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PLEASE READ THIS PROSPECTUS CAREFULLY.
The date of this prospectus is April 2, 2008.
3
TABLE OF CONTENTS
PART I
Summary Information............................................................6
Risk Factors...................................................................7
Use of Proceeds...............................................................12
Determination of Offering Price...............................................12
Dilution......................................................................12
Selling Security Holders......................................................13
Plan of Distribution..........................................................14
Description of Securities to be Registered....................................15
Interests of Named Experts and Counsel........................................17
General Development of Business ..............................................17
Plan of Operation.............................................................17
Description of Business.......................................................20
Description of Property.......................................................25
Legal Proceedings.............................................................25
Market for Common Equity and Related Stockholder Matters......................25
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure..........................................................26
Directors, Officers, Promoters, and Control Persons...........................26
Executive Compensation........................................................27
Security Ownership of Certain Beneficial Owners and Management................27
Transactions with Related Persons, Promoters and Certain Control Persons......27
Disclosure of Commission Position on Indemnification for Security
Act Liabilities...............................................................28
PART II
Other Expenses of Issuance and Distribution...................................28
Indemnification of Directors and
Officers......................................................................28
Recent Sales of Unregistered Securities.......................................29
Exhibits......................................................................30
Financial Statements..........................................................30
Undertakings..................................................................40
Signatures....................................................................41
4
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ________, 2008, (90 days after the effective date of this prospectus) all
dealers that effect transactions in these securities whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealer's obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
5
SUMMARY INFORMATION
MUSKOKA FLOORING CORPORATION
This summary highlights certain information contained elsewhere in this
prospectus. You should read the entire prospectus carefully, including our
financial statements and related notes, and especially the risks described under
"Risk Factors" beginning on page 7.
Corporate Background
Muskoka Flooring Corporation ("Muskoka") was organized on July 20, 2005. Muskoka
has not generated any revenue to date and should be considered as a development
stage corporation. Muskoka is in the business of importing hardwood flooring
materials from around the world and reselling them in the United States and
Canada. Muskoka will not manufacture any equipment or goods, but will resell
hardwood flooring products from various manufacturers through it proposed
website.
Muskoka's office is located at P.O. Box 293, 33 Card Avenue, Perkinsfield,
Ontario, Canada L0L 2J0. Our telephone number is (705) 794-9481 and our
facsimile number is (905) 949-0601.
The Offering
____________
Securities being offered Up to 482,500 shares of common stock, $.001 par
value per share are being sold by certain Selling
Shareholders.
Offering Price A price per share is set at $0.05 for the duration
of the offering.
Market for the Common There is no public market for the common shares.
Shares The price per share is $0.05. In addition, the
offering price for the shares will remain $0.05 per
share until shares are quoted on the
Over-The-Counter (OTC) Bulletin Board or an
exchange. The selling security holders may sell at
prevailing market prices or privately negotiated
prices, only after the shares are quoted on either
the OTC Bulletin Board or an exchange. There is no
assurance that Muskoka Flooring Corporation will be
able to meet the requirement for a public listing
or quotation of its Common Stock. Further, even if
Muskoka Flooring Corporation is able to have its
Common Stock quoted or granted a listing, there is
no assurance that a market for the common shares
will develop. If a market develops, there can be no
assurances that the price of the shares in the
market will be equal to or greater than the price
per share investors pay in this offering; in fact,
the price of our shares in any market that may
develop could be significantly lower.
Minimum Number of shares None.
to be Sold in this
Offering
Securities Issued and to Currently 1,482,500 shares of our common stock are
be issued issued and outstanding. 482,500 of the currently
issued common stock are to be sold under this
prospectus by existing shareholders.
Use of Proceeds Muskoka Flooring Corporation will not receive any
proceeds from the sale of the 482,500 common stock
sold from the selling security shareholders.
Terms of the Offering The selling security shareholders will determine
when and how they will sell the common stock
offered in this prospectus.
Offering Period The shares are being offered for a period not to
exceed 90 days from the date this Prospectus is
effective with the Security and Exchange
Commission, unless extended by the Company for an
additional 90 days.
6
You should rely only on the information contained in this prospectus. Muskoka
Flooring Corporation has not authorized anyone to provide you with information
different from that, which is contained in this prospectus. The selling security
holders are offering to sell shares of common stock and seeking offers to buy
shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus, or of any sale of the common stock.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's,
Plan of Operations, the financial statements and the related notes thereto
included in this prospectus.
Income Statement For the period from
July 20, 2005 (inception)
To December 31, 2007
_________________________
Revenues $ 0
Net Income (Loss) $ (29,630)
Net Income (Loss) per Share $ 0
Balance Sheet As of September 30, 2007
_________________________
Total Assets $ 8,243
Total Liabilities $ 8,398
Shareholders' Equity (Deficit) $ 8,243
RISK FACTORS
Muskoka Flooring Corporation ("Muskoka", "the Company", "we" or "us") considers
the following to be all the material risks to an investor regarding this
Offering. Muskoka should be viewed as a high-risk investment and speculative in
nature. An investment in Muskoka's common stock may result in a complete loss of
the invested amount.
THERE IS SUBSTANTIAL DOUBT ABOUT MUSKOKA'S ABILITY TO CONTINUE AS A GOING
CONCERN
Our auditor's report on our December 31, 2007 financial statements expresses an
opinion that substantial doubt exists as to whether we can continue as an
ongoing concern. Our officer and director may be unable or unwilling to loan or
advance any additional capital to Muskoka; therefore, you may be investing in a
company that will not have the funds necessary to continue its operations.
MUSKOKA HAS NO OPERATING HISTORY, THUS THE COMPANY CANNOT PREDICT WHETHER IT
WILL BE SUCCESSFUL IN REMAINING AN ONGOING CONCERN
Muskoka is a development stage company that was only recently established in
July, 2005. Although Muskoka has begun the process of setting up a web-site for
sale of hardwood flooring materials, (www.muskokaflooring.net), it has not begun
its initial revenue generating operations. There can be no assurance that
Muskoka will ever reach a level of profitability. The revenue and income
potential of Muskoka's proposed business and operations is unproven, and the
lack of operating history makes it difficult to evaluate the future prospects of
the business or determine whether or not it will remain as a going concern.
MUSKOKA'S WEBSITE IS NOT YET FULLY DEVELOPED, AS SUCH THERE IS NO ASSURANCE THE
COMPANY'S ANTICIPATED BUSINESS OF SELLING HARDWOOD FLOORING MATERIALS ON-LINE
WILL EVER GENERATE REVENUE
7
Muskoka faces multiple risks associated with the development of a new and
speculative business. The Company has no products, has not provided any
services, and has limited assets. In addition, Muskoka will be subject to
numerous risks, expenses and difficulties typically encountered in the
development of new business. There is no assurance that Muskoka's anticipated
business will ever be successful or profitable.
MUSKOKA'S OPERATING RESULTS IN ONE OR MORE FUTURE PERIODS WILL MORE THAN
LIKELY FLUCTUATE SIGNIFICANTLY FAILING TO MEET INVESTORS EXPECTATIONS
If, and when, Muskoka begins operations, Muskoka expects significant
fluctuations in future results of operation due to a variety of factors, many of
which are outside of our control, including, but not limited to:
* Demand for hardwood flooring products;
* Muskoka's ability to expand its market share;
* Competitive factors that affect Muskoka's pricing structure;
* The variety and mix of products Muskoka Flooring anticipates to sells;
* The timing and magnitude of capital expenditures, including costs relating
to the start-up, marketing, and continued expansion of operations;
* Conditions specific to the internet industry as well as distribution of
hardwood flooring products and general economic factors;
* Changes in generally accepted accounting policies, especially those
related to the online sales industry; and
* New government regulation or legislation related to online sales and
distribution of hardwood flooring products.
MUSKOKA IS A START-UP COMPANY WITH LIMITED FUNDS; THEREFORE IT MAY NOT BE
CAPABLE OF DEVELOPING ITS PROPOSED BUSINESS INTO A REVENUE GENERATING OPERATION
Muskoka's ability to develop the business into a revenue generating operation
will depend on a number of factors, which include the ability to:
* Provide quality hardwood flooring products and materials that are
attractively priced to the retail market;
* Market the retail sales of hardwood flooring products that Muskoka carries
on its proposed website effectively;
* Continue to expand Muskoka's infrastructure to accommodate growth in the
business;
* Establish relationships with wholesalers and direct suppliers within the
hardwood flooring products industry that will allow Muskoka to sell
products at a profit;
* Hire, retain, and motivate qualified personnel; and
* Effectively respond to competition.
If Muskoka is not successful in meeting these challenges and addressing the
risks and uncertainties associated with operating a business with limited funds,
Muskoka would fail and any investment made in the common stock would decline in
value or be completely lost.
MUSKOKA'S OPERATIONS AND ASSETS ARE LOCATED IN CANADA AND NOT IN THE UNITED
STATES, ASIA, SOUTH AMERICA OR OTHER POSSIBLE COUNTRIES OF IMPORT AND ARE
THEREFORE SUBJECT TO RISKS RELATED TO CURRENCY VARIATIONS, CHANGES IN THE LAW
AND THE POLITICAL CLIMATE OF DIFFERENT COUNTRIES.
8
Muskoka's operations and assets are concentrated in Canada, however it plans to
develop its business through accessing markets in the United States and
importing products from Asia, South America and others countries around the
world. There are inherent legal, political and economic risks in concentrating
assets and operations in one country while attempting to develop and build a
business in a foreign country. Muskoka will be subject to fluctuations in the
exchange rates pertaining to the Canadian dollar, the US dollar, and other
foreign currencies. Differences in currency values may handicap Muskoka in the
development and/or operation of its business, for example, by causing the price
of goods, services and transportation to exceed the revenue that can be
generated in the target markets respective currencies. Muskoka is also subject
to the inherent instability of relations between countries. Such relations may
become strained or non-existent and as a result Muskoka may be excluded from its
intended import markets. Furthermore Muskoka may face changes in the laws of its
intended import market countries, which may place it at a competitive
disadvantage with any local competitors. As a corporation based in a foreign
country, Muskoka may face difficulties in obtaining and/or enforcing local
judgments it may obtain in its intended import market countries.
MUSKOKA CURRENTLY HAS NO CUSTOMERS; IF THE COMPANY IS UNABLE TO GAIN CUSTOMERS
OR DEVELOP MARKET ACCEPTANCE IN A RELATIVELY SHORT PERIOD OF TIME THE COMPANY
WILL FAIL
Selling hardwood flooring products "on-line" is a relatively new and emerging
market; there can be no assurance that customers will adopt Muskoka's proposed
business. Accordingly, Muskoka cannot accurately estimate the potential demand
for the products Muskoka anticipates selling.
Muskoka believes that the acceptance of hardwood flooring products will depend
on its ability to:
* Effectively market Muskoka's website and the hardwood flooring products
that it anticipates selling;
* Provide high quality customer support and be able to attract and retain
customers;
* Distribute and price the products in a manner that is engaging to
customers;
* Develop and maintain a favorable reputation among clientele and potential
customers; and
* Have the financial ability to withstand downturns in the general economic
environment or any conditions that would slow sales of hardwood flooring
products.
IF MUSKOKA'S PLAN TO SELL HARDWOOD FLOORING PRODUCTS DIRECTLY TO CUSTOMERS OVER
THE INTERNET IS NOT SUCCESSFUL, MUSKOKA WOULD NOT BE ABLE TO GENERATE REVENUE,
AS A RESULT INVESTORS WOULD LOSE THEIR ENTIRE INVESTMENT
Muskoka plans to sell hardwood flooring products directly to customers through
its proposed website. The ability to achieve revenue growth in the future will
depend on the ability to develop and maintain an effective website that will
attract customers, the ability to hire qualified sales and technical personnel,
and offer new hardwood flooring products. In addition, Muskoka is dependent on
several factors relating to the Internet as a whole, including the relatively
new and unproven nature the Internet as a medium is for commerce. Although sales
over the Internet have continued to develop and grow over the past several years
the Internet is a developing market and long-term acceptance of the Internet as
a sales medium has not been statistically proven. Only recently have a few
select companies shown a reasonable profit through Internet business sales and
commerce; there can be no assurance that a trend towards profitability will
continue or be sustained by Muskoka, of which would result in complete loss in
its common share value.
IN THE FUTURE MUSKOKA WILL BE REQUIRED TO INCREASE ITS OPERATING EXPENSES IN
ORDER TO GROW; ANY INCREASE OF EXPENSES THAT IS NOT OFFSET WITH REVENUE WILL
RESULT IN LOSSES TO THE COMPANY
9
Muskoka plans to increase operating expenses in order to bring about and support
higher sales of hardwood flooring products, which will result in losses that
Muskoka may not be able to offset with revenues. Specifically, Muskoka plans to
increase operating expenses to expand sales and marketing operations. If revenue
falls below our expectations in any quarter and Muskoka is not able to quickly
reduce spending in response, Muskoka's operations will be adversely affected and
may result in significant losses.
MUSKOKA WILL NEED ADDITIONAL CAPITAL TO EXPAND ITS PROPOSED BUSINESS AND REMAIN
AS A GOING CONCERN, WITHOUT WHICH, THE COMPANY WILL FAIL
As of December 31, 2007, the Company had $7,293 of cash on hand and available.
Muskoka anticipates expenses of approximately $7,500 relating to this offering.
Capital will be expended on continuing the development of the website (estimated
at $4,500), beginning the initial phases of the marketing plan ($1,500), and
administrative expenses ($1,000). The future expansion of the business, beyond
the initial development stages, as described above will require significant
capital to fund anticipated operating losses, working capital needs, marketing,
and capital expenditures. (See "Use of Proceeds" herein.)
Although, management believes during the next twelve months, Muskoka will be
able to meet its cash requirements, there can be no assurance Muskoka will be
successful in raising future proceeds or that its proposed business will be able
to generate a level of revenue that can sustain the growth and expansion of the
business. Any shortfall of capital, whether through an inability to raise funds
or generate revenue, would adversely impact the progress and development of the
business.
Future equity or debt financing may not be available to Muskoka on favorable
terms, or perhaps may not be available at all. Borrowing instruments such as
credit facilities and lease agreements will likely have restrictions on lending
money to a start-up company with little or no assets, such as Muskoka. Muskoka's
inability to obtain additional capital on satisfactory terms may delay or
prevent the expansion of our business, which would cause the business and
prospects to suffer.
MUSKOKA WILL ENCOUNTER INTENSE COMPETITION, WHICH COULD LEAD TO GREATER EXPENSES
IN ESTABLISHING A POSITION WITHIN THE MARKETPLACE; IF THE COMPANY IS UNABLE TO
MEET THE DEMAND OF THESE EXPENSES THE BUSINESS WOULD FAIL
Muskoka will face intense competition from other businesses that sell and
distribute hardwood flooring products including Internet distributors and
companies with store front sales of hardwood flooring products. These
competitors will have longer operating histories, greater brand name
recognition, and larger installed customer bases. Competition will pose the
following hurdles to the success of Muskoka:
* The established competition will have significantly more financial
resources, R&D facilities, and marketing experience than those of Muskoka. The
competition may create future developments that will render the Company's
proposed business plan obsolete;
* Muskoka anticipates competition from new entrants into its targeted
industry segment. The Company believes that demand for hardwood flooring
products will grow. As this occurs, Muskoka expects competition to become more
intense and there can be no guarantee the Company will be able to remain
competitive with new entries into the market;
* Muskoka will likely need to obtain and maintain certain advantages over its
competitors. Maintaining such advantages will require a continued high level of
investment by the Company in marketing, sales, and customer support;
* There can be no assurance that Muskoka will have sufficient resources to
maintain its marketing, sales and customer support efforts on a competitive
basis or that the Company will be able to make the technological advances
necessary to maintain a competitive advantage with respect to proposed business;
and
10
* Increased competition could result in price reductions, fewer product
orders, and reduced operating margins, any of which could materially and
adversely affect the Company's business, financial condition, and results of
operations.
MUSKOKA WILL DEPEND UPON THIRD PARTIES FOR THE SUCCESS OF ITS FUTURE BUSINESS,
WHICH COULD LEAD TO OPERATIONAL DELAYS AND ADDITITIONAL EXPENSES THAT THE
COMPANY MAY NOT BE ABLE TO OVERCOME RESULTING IN THE FAILURE OF THE BUSINESS
Muskoka's future performance will depend upon its ability to import hardwood
products and materials, market those products through its proposed website, and
deliver the products to the buyer. In this regard, Muskoka may contract with
import/export consultants, third-party web designers, marketing consultants and
shipping and delivery companies. However, the Company has no guarantee that the
third party's capacity will be sufficient to meet the demand for the Company's
business in terms of quality and delivery. If the third party cannot meet the
Company's demands, there can be no assurance that Muskoka will ever achieve
revenues or have profitable operations.
MUSKOKA IS DEPENDENT ON KEY PERSONNEL AND ANY TURNOVER COULD SERIOUSLY IMPEDE
THE SUCCESS OF THE BUSINESS
Muskoka's success and execution of its business strategy will depend
significantly upon the continuing contributions of, and on its ability to
attract, train, and retain qualified personnel. In this regard, the Company is
particularly dependent upon the services of Gord Cotton, its President and
Director. Muskoka does not have an employment agreement with its sole officer,
and as a result there is no assurance that Gord Cotton will continue to manage
Muskoka in the future. The loss of the services of its Officer, or in the future
any key employees, would have a material adverse impact on the further
development of Muskoka's business.
THE OFFICER AND DIRECTOR, GORDON COTTON, IS RETIRED; THIS MAY CREATE A TIME
CONFLICT OF INTEREST BETWEEN HIM AND MUSKOKA, WHICH COULD JEOPARDIZE FUTURE
DEVELOPMENT OF MUSKOKA
Mr. Cotton, the Officer/Director, is retired and only plans to devote up to a
maximum of fifteen hours per week to the development of Muskoka's business, but
unforeseen conflicts may result in taking time away from the furtherance of
Muskoka's business, which would negatively impact the development of the
Company. Mr. Cotton may choose to return to full-time employment in the future,
but at the present time, no plans or timeframes to do so exist.
THE LIMITED EXPERIENCE OF MUSKOKA'S CURRENT MANAGEMENT COULD HINDER OPERATIONS
AND THEREFORE LIMIT ANY POTENTIAL GROWTH OR PROFITABILITY OF THE COMPANY
Current management of Muskoka has had limited experience in the start-up and
development of an Internet online retail business. The lack of experience of the
current Officer of the Company may prevent the Company from achieving growth
and/or profitability in the future.
MUSKOKA CURRENTLY HAS ONE DIRECTOR, GORDON COTTON, WHO HAS SIGNIFICANT CONTROL
ON ALL MATTERS SUBMITTED FOR STOCKHOLDER APPROVAL WHICH COULD RESULT IN
CORPORATE DECISIONS THAT NEGATIVELY IMPACT OTHER SHAREHOLDERS
Currently, Gord Cotton owns 67.45% of Muskoka Flooring's issued and outstanding
common stock. As a result, he has significant control on the outcome of all
matters submitted to a vote by stockholders, which may include the election of
directors, amendments to the certificate of incorporation, and approval of
significant corporate transactions.
NO DIVIDEND IS PAID BY MUSKOKA TO ITS HOLDERS OF COMMON SHARES AND NO DIVIDEND
IS ANTICIPATED TO BE PAID IN THE FORESEEABLE FUTURE, WHICH MAY DETER POTENTIAL
INVESTORS FROM INVESTING IN ITS COMMON STOCK AND PREVENT HOLDERS OF ITS COMMON
STOCK FROM SELLING THEIR SHARES IN THE FUTURE
Muskoka has not paid any cash or other dividends on its Common Stock and does
not expect to declare or pay any such cash dividends in the foreseeable future;
this may prevent investors from investing in Muskoka in the future and prevent
shareholders of the common stock from ever selling their shares because of the
lack of buyers.
11
INVESTORS WILL PAY MORE FOR MUSKOKA'S COMMON STOCK THAN THE PRO RATA PORTION OF
THE COMPANY'S ASSETS ARE WORTH; AS A RESULT INVESTING IN THE COMMON STOCK MAY
RESULT IN AN IMMEDIATE LOSS TO SHAREHOLDERS
The arbitrary offering price of $0.05 per common share as determined herein, is
substantially higher than the net tangible book value per share of Muskoka's
common stock. Muskoka's assets do not substantiate a share price of $0.05 per
share. This premium in share price applies to the terms of this offering and
does not attempt to reflect any forward looking share price subsequent to the
company obtaining a listing on any exchange, or becoming quoted on the OTC
Bulletin Board.
MUSKOKA HAS NO PUBLIC MARKET FOR ITS STOCK AND THERE IS NO ASSURANCE ONE WILL
EVER DEVELOP; IF A MARKET DOES NOT DEVELOP SHAREHOLDERS MAY NOT BE ABLE TO EVER
SELL THEIR SHARES RESULTING IN A COMPLETE LOSS OF THEIR INVESTMENT
There is no public market for Muskoka's shares of common stock. Selling
shareholders will still be limited to selling the shares at $0.05 per share (set
offering price per share pursuant to this prospectus) until the shares are
quoted on the Over-The-Counter (OTC) Bulletin Board or an exchange.
There is no assurance that Muskoka will be able to meet the requirement for a
public listing. Further, even if Muskoka is able to have its Common Stock quoted
or granted listing, there is no assurance that a market for the common shares
will develop or that the shares in the market will be equal to or greater than
the price per share investors pay in this offering; in fact, the price of our
shares in any market that may develop could be significantly lower.
Currently Muskoka has thirty-five shareholders and there is no guarantee that
additional investors will purchase Muskoka's common stock.
VIRTUALLY ALL OF MUSKOKA'S SHAREHOLDERS WILL BE SELLING ALL OF THEIR SHARES,
WHICH COULD NEGATIVELY IMPACT THE SHARE PRICE
The selling shareholders may sell or attempt to sell all of their shares being
registered herein; as a result, the price of the stock may fall. Muskoka has a
limited number of shares issued and outstanding. Sale of any significant amount
of shares into the market would depress the share price and the share price may
not appreciate thereafter.
USE OF PROCEEDS
Muskoka Flooring Corporation will not receive any proceeds from the sale of the
securities being registered pursuant to this statement.
DETERMINATION OF OFFERING PRICE
Currently, there is no established public market for our common shares. As a
result, the offering price and other terms and conditions relative to our shares
have been arbitrarily determined by Muskoka and do not bear any relationship
whatsoever to our assets, earnings, book value or other criteria of value.
In addition, no investment banker, appraiser, or other independent third party
has been consulted concerning the offering price for the shares or the fairness
of the offering price considered for the shares.
DILUTION
The Company is not selling any common shares and is not receiving any proceeds
from the sale of securities by existing shareholders.
12
SELLING SECURITY HOLDERS
The following table sets forth information as of December 31, 2007 with respect
to the beneficial ownership of our common stock both before and after the
offering. The table includes all those who beneficially own any of our
outstanding common stock and are selling their shares in the concurrent
offering.
NOTE: Our sole office and director, Gord Cotton, as of the date of this
Prospectus owns 1,000,000 common shares, which are subject to Rule 144
restrictions.
Selling shareholders will still be limited to selling the shares at $0.05 per
share (set offering price per share pursuant to this prospectus). To date, there
have been no steps taken to list Muskoka's common stock on any public exchange
for listing.
The percentages determined in these calculations are based upon 1,482,500 of our
common shares issued and outstanding as of the date of this Prospectus. The
table set forth below shows the number of shares and percentage before and after
the public offering.
All of the shares registered herein will become tradable on the effective date
of this registration statement. The following table sets forth the beneficial
ownership of the shares held by each person who is a selling security holder and
by all selling security holders as a group.
______________________________________________________________________________________________________________________________
Shares Owned Percentage Owned Percentage
Prior to this Prior to this Total of Shares Total Shares Owned After
Name of Selling Shareholder Offering Offering Offered for Sale After Offering Offering
______________________________________________________________________________________________________________________________
Gale Beauchamp 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Melissa Beauchamp 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Cindy Beauchamp 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Jill Allday 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Jon Allday 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Roy Partanen 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Moira Partanen 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Mark Cotton 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Elizabeth Wadeson 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Scott Cotton 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Gail Cotton 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Sergio Galli 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Laurel Galli 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Tony Galli 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Rosanna Francioni 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Sandra Celebre 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Tony Viola 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Tonina Viola 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Ken King 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Sharon King 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Bruce Borrie 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Denise Neville 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
13
______________________________________________________________________________________________________________________________
Brandon Neville 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Jackie Borrie 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Larry MacDonald 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Debbie MacDonald 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Margaret Hie 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Shaun Delaney 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Narendra Parbhunauth 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Vadewaitie Persaud 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Luis Labardo 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Lori Labardo 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Abigail Bagwell 12,500 0.84% 12,500 0 0%
______________________________________________________________________________________________________________________________
Zukang Xu 70,000 4.72% 70,000 0 0%
______________________________________________________________________________________________________________________________
SELLING SECURITY
HOLDERS AS A 482,500 32.55% 482,500 0 0.00%
GROUP
______________________________________________________________________________________________________________________________
The selling security holders, as a group, are hereby registering 482,500 common
shares, of which after the effective date of this registration statement, they
may sell at any time.
The shares owned by the selling security holders are being registered pursuant
to Rule 415 of the General Rules and Regulations of the Securities and Exchange
Commission, which Rule pertains to delayed and continuous offerings and sales of
securities. In regard to the shares offered under Rule 415, has given certain
undertakings in Part II of the Registration statement of which this registration
statement is a part of, which in general, Muskoka commit to keep this
registration statement current during any period in which offers or sales are
made pursuant to Rule 415.
In the event the selling security holders receive payment for the sale of their
shares, Muskoka will not receive any of the proceeds from such sales. Muskoka is
bearing all expenses in connection with the registration of the shares of the
selling security holders estimated at $7,500.
Excluding the mentioned officer and director herein, to our knowledge, none of
the selling shareholders:
1. Has had a material relationship with Muskoka Flooring Corporation other
than as a shareholder, as noted above at any time since inception, July 20,
2005; or
2. Has ever been an officer or director of Muskoka Flooring Corporation.
PLAN OF DISTRIBUTION
The selling security holders are registering 482,500 shares of common stock for
possible resale at the price of $0.05 per share. The percentage of the total
outstanding common stock being offered by the selling shareholders is
approximately 32.55% based upon the 1,482,500 common shares that are issued and
outstanding as of the date of this prospectus. There is no arrangement to
address the possible effect of the offerings on the price of the stock.
Muskoka will not receive any proceeds from the sale of the shares by the selling
security holders. The price per share is $0.05 and will remain so unless and
until the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or an
exchange. The selling security holders may sell at prevailing market prices or
privately negotiated prices only after the shares are quoted on either the OTC
Bulletin Board or an exchange. However, Muskoka's common stock may never be
quoted on the OTC Bulletin Board or listed on any exchange.
14
If and when the common stock is quoted on the OTC Bulletin Board or listed on an
exchange, the selling security holders' shares may be sold to purchasers from
time to time directly by, and subject to the discretion of, the selling security
holders. Further, the selling security holders may occasionally offer their
shares for sale through underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling security holders and/or the purchasers of the shares for whom
they may act as agents. The shares sold by the selling security holders may be
sold occasionally in one or more transactions, either at an offering price that
is fixed or that may vary from transaction to transaction depending upon the
time of sale, or at prices otherwise negotiated at the time of sale. Such prices
will be determined by the selling security holders or by agreement between the
selling security holders and any underwriters.
In the event that the selling security holders enter into an agreement, after
the effective date of this registration statement, to sell their shares through
a broker-dealer that acts as an underwriter, Muskoka will file a post-effective
amendment to this registration statement and to file the agreement as an exhibit
to the amended registration statement. The amendment will identify the
underwriter, provide the required information on the plan of distribution and
revise the appropriate disclosures in the registration statement.
Any underwriter, dealer, or agent who participates in the distribution of the
securities registered in this registration statement may be deemed to be an
"underwriter" under the Securities Act. Further, any discounts, commissions, or
concessions received by any such underwriter, dealer or agent may be deemed to
be underwriting discounts and commissions under the Securities Act. If and when
a particular offer is made by or on the behalf of the selling security holders,
we will prepare a registration statement, including any necessary supplements
thereto, setting forth the number of shares of common stock and other securities
offered and the terms of the offering, including:
(a) the name or names of any underwriters, dealers, or agents, the
purchase price paid by any underwriters for the shares purchased from
the selling security holders, and
(b) any discounts, commissions and other items constituting compensation
from the selling security holders, and
(c) any discounts, commissions or concessions allowed, realized or paid to
dealers, and
(d) the proposed selling price to the public.
Pursuant to Regulation M of the General Rules and Regulations of the Securities
and Exchange Commission, no person engaged in a distribution of securities on
behalf of a selling security holder may simultaneously bid for, purchase or
attempt to induce any person to bid for or purchase securities of the same class
during the period of time starting five business days prior to the commencement
of such distribution and continuing until the selling security holder, or other
person engaged in the distribution, is no longer a participant in the
distribution.
In order to comply with the applicable securities laws of certain states, the
securities will be offered or sold in such states only through registered or
licensed brokers or dealers in those states. In addition, in certain states, the
securities may not be offered or sold unless they have been registered or
qualified for sale in such states or an exemption from such registration or
qualification requirement is available and with which Muskoka has complied.
In addition and without limiting the foregoing, the selling security holders
will be subject to applicable provisions, rules and regulations under the
Exchange Act with regard to security transactions during the period of time when
this registration statement is effective.
Muskoka will pay all expenses incidental to the registration of the shares
(including registration pursuant to the securities laws of certain states) other
than commissions, expenses, reimbursements and discounts of underwriters,
dealers or agents, if any.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The following statements set forth summaries of the material provisions of our
Certificate of Incorporation and Bylaws, and are qualified in their entirety by
reference to the detailed provisions of our Certificate of Incorporation and
Bylaws, which have been provided as Exhibits to this registration statement. The
shares registered pursuant to the registration statement of which this
prospectus is a part, are shares of common stock, all of the same class and
entitled to the same rights and privileges as all other shares of common stock.
15
Common Stock
Muskoka Flooring Corporation's Certificate of Incorporation authorizes the
issuance of 75,000,000 shares of common stock, $.001 par value per share. As of
the date of this Prospectus, there are 1,482,500 common shares issued and
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters to be voted on by the shareholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50 percent of the Shares voted for the election of
directors can elect all of the directors. The holders of Common Stock are
entitled to receive dividends when, as and if declared by the board of directors
out of funds legally available therefore. In the event of liquidation,
dissolution, or winding up of Muskoka, the holders of Common Stock are entitled
to share ratably in all assets remaining available for distribution to them
after payment of liabilities and after provision has been made for each class of
stock, if any, having preference over the common stock. The holders of Common
Stock do not have preemptive rights. In the future, preemptive rights may be
granted by way of amendment of Muskoka Flooring's articles of incorporation,
which would require a vote by the board of directors and shareholders on such
matter.
Preferred Stock
Muskoka Flooring Corporation has not authorized any Preferred Stock, but in the
future reserves the right to do so at the discretion of the shareholders and the
board of directors.
Options and Warrants
Muskoka Flooring Corporation does not presently have any options or warrants
authorized or any securities that may be convertible into common stock. However,
our Board of Directors may later determine to authorize options and warrants.
Dividend Policy
Muskoka Flooring Corporation has not previously paid any cash dividends on our
common stock and do not anticipate or contemplate paying dividends on our common
stock in the foreseeable future. Our present intention is to utilize all
available funds for the development of our business. There is no assurance that
Muskoka will ever have excess funds available for the payment of dividends. The
only legal restrictions that limit the ability to pay dividends on common equity
or that are likely to do so in the future are those restrictions imposed by
State Laws.
Transfer Agent
Currently, Muskoka Flooring has no Transfer Agent.
Penny Stock Regulation
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. As our shares immediately following this offering will likely
be subject to such penny stock rules, investors in this offering will in all
likelihood find it more difficult to sell their securities.
16
INTERESTS OF NAMED EXPERTS AND COUNSEL
The financial statements of Muskoka Flooring Corporation for the period from
inception on July 20, 2005 to December 31, 2007 included in this prospectus have
been audited by Moore & Associates Chartered, Las Vegas, Nevada, as indicated in
their report, and are included in this Prospectus in reliance on the report
given upon the authority of that firm as experts in accounting and auditing.
The validity of the issuance of the common stock offered in this offering will
be passed upon for Muskoka Flooring Corporation by Stephen B. Jackson, Attorney
at Law, and is included in this prospectus.
No expert or counsel named in this registration statement as having prepared or
certified any part of this statement or having given an opinion upon the
validity of the securities being registered or upon other legal matters in
connection with the registration or offering of the common stock was employed on
a contingency basis or had, or will receive, in connection with the offering, a
substantial interest, direct or indirect, in the registrant. Nor was any such
person connected with the registrant as a promoter, managing or principal
underwriter, voting trustee, Director, Officer, or employee.
INFORMATION WITH RESPECT TO THE REGISTRANT
GENERAL DEVELOPMENT OF BUSINESS
The Company was incorporated on July 20, 2005 under the laws of the State of
Delaware. On that date, Paul Masi was appointed as President, Director and Chief
Financial Officer. Mr. Masi resigned as President on February 26, 2006 for
personal reasons and Mr. Gord Cotton was appointed President, Director and Chief
Financial Officer. Muskoka has never declared bankruptcy, it has never been in
receivership, and it has never been involved in any legal action or proceedings.
Since becoming incorporated, Muskoka has not made any significant purchase or
sale of assets, nor has it been involved in any mergers, material
reclassification, acquisitions or consolidations. Since inception, Muskoka has
not made any material change in the mode of conducting its business. The Company
has not yet commenced any revenue generating operations.
PLAN OF OPERATION
Muskoka is a development stage company that intends to sell a full line of
hardwood flooring products, materials, tools and accessories over the internet.
Muskoka will not manufacture any equipment or goods, but will resell hardwood
flooring products from various manufacturers through our website. Our plan is to
offer for sale exotic hardwood flooring materials imported from Asia, South
America, and other regions of the world, along with protective coatings, tools
and accessories commonly used in the installation and maintenance of hardwood
floors. We plan to sell these products via our website. Our plan of operation is
to sell hardwood flooring products and materials though an internet website
(www.muskokaflooring.net).
As of December 31, 2007 Muskoka Flooring had $7,293 of cash on hand and
available for expenses. Management believes this amount will satisfy the cash
requirements of Muskoka for the next six months or until such a time additional
proceeds are raised. Muskoka plans to satisfy our future cash requirements by
additional equity financing. This will be in the form of private placements of
common stock. There is no additional offering in the works at present. There can
be no assurance that Muskoka will be successful in raising additional equity
financing, and, thus, be able to satisfy our future cash requirements, which
primarily consist of working capital directed towards the development of the
website and marketing campaigns, as well as legal and accounting fees. Muskoka
depends upon capital to be derived from future financing activities such as
subsequent offerings of our stock. There can be no assurance that Muskoka will
be successful in raising the capital the company requires. Management believes
that if subsequent private placements are successful, Muskoka will be able to
generate revenue from online sales of hardwood flooring goods and products and
achieve liquidity within the following twelve to fourteen months thereof.
However, investors should be aware that this is based upon speculation and there
can be no assurance that Muskoka will ever be able reach a level of
profitability.
As of the date of this registration statement Muskoka has not generated any
revenue through its proposed business. To date all proceeds received by Muskoka
were a result of the sale of its common stock.
17
Muskoka does not anticipate any significant research of any products. The
Company does not expect the purchase or sale of plant or any significant
equipment, and Muskoka does not anticipate any change in the number of employees
in the next twelve months. Muskoka has no current material commitments. Muskoka
has not generated any revenue since its inception.
Muskoka has no current plans, preliminary or otherwise, to merge with any other
entity.
Muskoka is still considered to be a development stage company with no revenue.
As such, Muskoka's future success will be dependent upon raising additional
capital through placement of our common stock in order to continue with the
business plan. There can be no assurance that Muskoka will be successful in
raising the capital it requires through the sale of our common stock in order to
continue as a going concern.
Over the next 12 months, the following steps will need to be accomplished in
order for Muskoka to become fully operational:
* Complete the development of the website. Management has estimated the time
frame to accomplish this to be the end of the First Quarter of 2009 and cost
approximately $4,500.
* In addition, Muskoka plans to allocate approximately $1,000 towards the
initial phases of the marketing plan as described herein.
* Muskoka has 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
deficiencies, if any, in the estimated expenses anticipated for completion of
this registration statement, and the completion of the website as described
herein.
Implementation
As of December 2007, Muskoka has secured the domain name
www.muskokaflooring.net. At this time the website is not functioning.
Third Quarter 2008: Muskoka plans to establish purchasing agreements with
various manufacturers and arrange for the import and delivery of products on a
per sale basis. We will initiate the development of our website by adding
product lines to the site. The product lines will represent manufacturers of
hardwood flooring products, materials, tools and accessories. The cost to
accomplish these tasks is estimated at $1,500.
Fourth Quarter 2008: Muskoka plans to have shopping cart availability on its
website. We will continue to expand our product offerings through a continuing
effort to establish new relationships with manufacturers of our target products.
The cost to accomplish these tasks has been estimated at $2,000.
First/Second Quarter 2009: Muskoka plans to have a completed website, with
multiple product lines that customers can readily navigate, giving them an
opportunity to shop and compare the product lines on Muskoka's website. An
additional $1,000 in cost is anticipated.
Once the website is completed, over the subsequent twelve months, Muskoka plans
to implement a marketing campaign directed specifically at building traffic of
"potential buyers" to its website. For this purpose management anticipates
employing a third party who specializes in increasing web traffic to websites,
such as PerfectTraffic.com, WebSiteTraffic.com and/or HitWise.com. Management
anticipates that such a service that can guarantee visitors to its website will
cost approximately $200 to $300 per month for every 50,000 visitors. However,
even if Muskoka is successful in developing its proposed website and contracting
a third party to increase web traffic there can be no guarantee or assurance
that individuals will buy any of the products listed on Muskoka's website.
No guarantees or assurances can be made by Muskoka that it will accomplish its
goals within the dates specified or within the costs estimated by the Company.
Moreover, management has no current plan to substitute any additional products
or services except those described herein (hardwood flooring products,
18
materials, tools and accessories). No guarantee or assurance can be made that
Muskoka's proposed business model will be effective in distributing these
products.
The website will be designed to meet Muskoka's strategy of providing a broad
selection of hardwood flooring products and materials from multiple
manufacturers and distributors.
Potential investors should realize that as of the date of this Prospectus,
Muskoka is currently in the process of developing the Internet website and at
this time it is not fully operational.
Even if Muskoka is successful in developing and ultimately launching its
proposed website (www.muskokaflooring.net), it's future success will be
dependent on several critical factors including, but not limited to,
successfully raising capital, market acceptance, and management's continued
focus on the development of the business. Furthermore, Muskoka cannot assure
investors that it will be able to overcome the risks described within this
Registration Statement to meet the goal of its strategic business plan. (See
Risk Factors, beginning on page 6.)
Website
The proposed website will display a variety of hardwood flooring products,
materials, tools and accessories, where shoppers will be able to take advantage
of the convenience of one-stop shopping.
The website will be the core of Muskoka's business. It will be designed to
provide consumers with quality information and solutions, where they can obtain
informative product data and comparisons for their hardwood flooring needs at
one site.
The key for successfully developing the website will be heavily dependent on the
ability of management to establish relationships with manufacturers and
distributors of hardwood flooring products, materials, tools and accessories. To
date, no specific relationship has been made between Muskoka and any
manufacturer, supplier and/or distributor of hardwood flooring products.
Furthermore, Muskoka must be able to attract large numbers of potential buyers
of hardwood flooring products and materials consistently to the site and offer
products that are appealing. Management believes this can be accomplished
through aggressive marketing campaigns as detailed above in "Marketing and
Strategy". However, no guarantee can be given that Muskoka will be able to
attract large numbers of buyers to its proposed website.
Currently Muskoka does not have any arrangements with any manufacturer, producer
or supplier of hardwood flooring products, materials, tools or accessories, nor
any storage facilities, or any import or delivery organizations.
Muskoka believes by providing a broad selection of quality products along with
detailed information about the products through its proposed website, it will be
able to compete within the growing marketplace for hardwood flooring products
and materials.
As Muskoka expands its business, it will likely incur losses. Management plans
on funding these losses through revenues generated through its proposed website.
If Muskoka is unable to satisfy its capital requirements through its revenue
production or if the Company is unable to raise additional capital through the
sale of its common stock it may have to borrow funds in order to sustain its
business. There can be no assurance or guarantee given that Muskoka Flooring
will be able to borrow funds because it is a new business and the future success
of the Company is highly speculative.
Although management believes the above timeframes for the related business steps
are conservative and can likely be accomplished by Muskoka, potential investors
should be aware that several unforeseen or unanticipated delays may impede
Muskoka from accomplishing the above-described steps such as:
* Problems may arise during the development of the Internet website with
the programming and testing that management cannot overcome, creating a time
delay and additional costs; and
* Muskoka Flooring may find that potential investors are unreceptive to its
business plan and have no interest in investing funds.
19
If either of these events should occur Muskoka would not be able to continue as
a going concern and investors would lose all of their investment. In addition to
the above factors investors should carefully read the Risk Factors described
herein beginning on page 7.
In the event additional funds are secured by Muskoka there is no guarantee that
the proposed marketing strategy will be effective in accomplishing the goals
Muskoka has set. This may force management to redirect its efforts and create
the need for additional time, money, and resources, of which, Muskoka may not be
successful in providing.
At this time, management does not plan to commit any of their own funds towards
the company's development. If and when this changes, management will file the
appropriate disclosures in a timely manner.
Muskoka plans to develop and market an e-commerce enabled website which will
attract prospective customers seeking hardwood flooring products. Specifically,
the Company plans to market and sell through its website a full line of goods
and products that would allow both consumers and contractors the ability to
purchase all necessary materials to install or refinish a hardwood floor.
At this time government approval is not necessary for our business, and Muskoka
is unaware of any significant government regulations that may impact its
proposed business within the e-commerce marketplace.
Muskoka Flooring has not incurred any significant research and development
costs, and therefore does not expect to pass any such costs on to our
prospective customers.
DESCRIPTION OF BUSINESS
Products
Muskoka Flooring Corporation does not manufacture or design any products. Rather
Muskoka plans to develop an on-line business of selling hardwood flooring
materials, wood accessories, protective coatings, application tools and brushes,
protective clothing and safety equipment, as well as books and manuals on how to
install and maintain hardwood floors through an Internet website. The website
itself will be structured to host a comprehensive catalog from which consumers
can shop for a variety of hardwood flooring products, materials, tools and
accessories.
Types of Hardwoods
The types of hardwoods (with country of export and a brief description) we will
offer will include (but are not limited to):
BAMBOO (CHINA)
Bamboo is stronger and more flexible than almost any wood flooring presently
available. It is less blending than other hardwood, harder than oak and maple,
with minimal shrinkage and swelling compared to most woods. Bamboo is more
dimensionally stable (less expansion and contraction) than any commonly used
wood flooring. Bamboo is a new innovation for decorative material, with products
available in natural and carbonized (coffee) colors with several different
styles. The color is in the product itself, not added on synthetically during
production. The carbonized color is obtained by subjecting the bamboo to high
pressure steam, which weakens the fibers. Bamboo flooring has the quality of a
natural appearance and soft color, which adds a unique ambiance by giving warmth
in the winter, coolness in the summer.
SIERRA MADRE PINE (MEXICO)
Sierra Madre Pine flooring has the traditional look of ponderosa pine flooring
popular in the Southwest United States, but it is harder than the ponderosa pine
grown in the USA. The long hot growing season with unpredictable and infrequent
rains strengthens and hardens the wood fibers in Sierra Madre Pine. Kiln drying
and the naturally dry air of the high desert in Mexico insure that, unlike pine
from the humid coastal regions of the USA, Sierra Madre Pine is dry enough to
prevent excessive shrinkage after installation.
20
HICKORY (UNITED STATES)
Hickory is the hardest of the North American indigenous wood species. It is
twice as hard as oak. "Hickory" is not a single wood species. Hickory is a
mixture of pignut, shagbark, pecan and bitternut hickory. The tree is relatively
small so wider wood is expensive. This wood is commonly used for floors in
commercial settings but is also popular for residential use. It can be sorted
for heartwood color (medium brown) or sapwood color (pinkish white). Also
popular are unsorted floors which are varied in color.
RUBBERWOOD (THAILAND)
Rubberwood is a medium density hardwood with hardness similar to Oak and Teak.
This makes Rubberwood relatively harder than most other plantation timber
species. The drying shrinkage of Rubberwood is relatively low compared to most
hardwood with same density and this makes Rubberwood more dimensionally stable
than most other timber species used for timber flooring. Most importantly,
Rubberwood is easy, biodegradable and does not produce toxic waste or fumes
during production, use or disposal. Since Rubberwood comes from a sustainable
and manageable plantation resource it is thereby considered a true eco-friendly
product.
BRAZILIAN CHERRY (BRAZIL)
Brazilian Cherry is the most popular hardwood flooring import from Brazil to
North America. Brazilian Cherry is known for its hardness and durability. This
exotic hardwood is a primary choice in both residential and commercial
installations. It is available in both prefinished and unfinished formats and
several sizes.
Brazilian Cherry from South America has a brownish-red color. It darkens from a
tan/salmon color to a deep, reddish brown and is over twice as hard as domestic
Red Oak. Brazilian Cherry is an extremely heavy wood; hard to cut, variable
heartwood regarding color, from light brown to pink, to reddish brown, with some
intense shadowing. Thick sapwood, notably differentiated, white slightly
yellowed, uniform medium texture, regular to irregular grain of wood, rough and
of poor shine surface; imperceptible scent.
TIGERWOOD (BRAZIL, BOLIVIA, PERU, GUATEMALA, AND MEXICO)
Tigerwood is a boldly striped species which has an orange/reddish brown
background with wide dark brownish black striping. Tigerwood, as the name
suggests, is a species which exhibits a wide range of color/striping. The
striping can vary from fine lines to bold "brush strokes". The background color
can range from light tans to darker orange browns. Tigerwood exhibits a large
degree of color change with a pronounced darkening of the background under the
stripes from an orangey tan to a deep reddish brown color, which then in turn
makes the striping less contrasting and more subtle. Tigerwood is 170% as hard
as red oak, and comes in various grades and sizes.
CORK (SOUTH AMERICA AND AUSTRALIA)
Cork has a durability that can be attributed to the finish, resilience and
structure of the cork tiles. The finish that is applied to the surface protects
it from moisture, chemicals, dirt and other damaging materials. The resilience
of the floor aids in its durability because it tends to "give" which helps to
resist scratching and denting. Many floors remain in service today after more
than 80 years of commercial use. Cork flooring is made from the bark of the Cork
Oak tree. The bark is stripped from the cork tree every nine years inflicting no
damage upon the tree (cork is truly a renewable resource). Cork is very quiet to
walk on making it an excellent flooring choice in public areas such as libraries
and churches. Cork has a unique and natural look to it complementing classic and
contemporary designs. Because of the durability of cork, it is suitable for both
commercial and residential installation.
Other hardwoods to be offered on Muskoka's website include: (from Asia) Keruing,
Meranti, Red Balau and Yellow Balau; (from South America) Eucalyptus, Spanish
Cedar, Cumaru, Angelim Vermelho and Tatajuba.
The website will offer all the accessory wood pieces commonly required to
complete a hardwood floor project, such as corner pieces, trim and molding. The
website will also offer protective coatings (both oil-based and water-based),
application tools and brushes, protective clothing and safety equipment, as well
as books and manuals on how to install and maintain hardwood floors. As a
benefit of purchasing materials from Muskoka, flooring contractors will have the
option of listing their services and contact information on our website.
The above products will be displayed on the Muskoka website. As of the date of
this prospectus, investors must be aware that the website is not completed and
if it should become completed Muskoka cannot provide any assurance or guarantee
21
that the above products will be sold on the website. Moreover, investors must be
aware that Muskoka has no agreement, contract or other arrangement with the
above suppliers to sell the products on the website.
Initially, we will ship directly from the manufacturer to the customer, with
delivery costs passed through to the customer at the point of sale, on our
website. We will have the ability to track the purchase from inception to
delivery, in order to offer quality customer service. Our website will have full
product descriptions, pricing, photographs, and helpful hints and links to other
complimentary products often needed when purchasing flooring products.
As revenue grows, we may maintain a small inventory of commonly purchased
products, if we can gain advantageous pricing by buying in bulk. Inventory
management will be critical as the company grows, and if done poorly may have a
severe negative impact on the business, potentially causing it to fail
altogether. Currently we have no warehouse facilities.
Muskoka has not incurred any significant research and development costs, and
therefore does not expect to pass any such costs on to our prospective
customers.
The Wood Flooring Industry
The wood flooring industry is both large and fragmented. It is a very
competitive industry. Consumers and flooring contractors alike can choose from a
full spectrum of flooring product suppliers. These suppliers include very large,
well-capitalized international conglomerates, national chains of building supply
warehouse stores, regional lumber supply chains, and small, locally owned
building material supply stores. There are also many competitors selling
flooring products online.
Muskoka plans to compete in this very competitive market by offering quality
products at competitive prices accompanied by friendly, knowledgeable and
efficient customer service.
The following research outlines the future growth of the flooring industry:
The $2.6 billion U.S. wood flooring market has made significant inroads in the
domestic floor coverings industry over the past two decades. The inroads were
stimulated by growing consumer acceptance of high-end hard surface flooring, as
well as more diverse offerings by wood flooring manufacturers. Manufacturers now
offer a wide range of species, colors, and custom-type designs. The industry has
also stimulated demand with easier and less costly to install products such as
prefinished, engineered, and glue less wood floors. These new products and
technologies have increased competitive pressures, especially from foreign-based
manufacturers. (RESEARCH FROM CATALINA RESEARCH, NOVEMBER 2005)
Increasing demand from both the residential and non-residential construction
market has resulted in growth for the wood flooring market. The increased demand
comes from various factors, including greater disposable incomes and more
spending ability thanks to rising home values and the resulting rise in
homeowner equity. As a result, the U.S. wood flooring market stood at $2.1
billion in 2005, up 2% over the previous year. A decline in the popularity of
more standard wood types such as oak is giving way to the increased popularity
of other less traditional woods such as maple, cherry, and pecan. Other trends
influencing the market included an increase in demand for rustic, wider planks,
exotic woods, distressed wood floors, and even less conventional bamboo
flooring. (RESEARCH FROM SPECIALISTS IN BUSINESS INFORMATION (SBI), NOVEMBER
2006.)
Demand for non-resilient flooring (ceramic, wood, laminate, etc.), which is by
far the most popular type of floor covering worldwide, will outpace sales of
both resilient flooring (which includes vinyl, linoleum and rubber products),
and carpets and rugs through 2010. As income levels climb, increases will be
driven by the durability and ease of maintenance offered by non-resilient
flooring, and supported by growing consumer preference for high-end and natural
hard surface flooring products. Laminate flooring will register the strongest
gains of any floor covering product segment due to its outstanding performance
characteristics, which include resistance to scratching and nicking, ease of
maintenance and the ability to mimic more costly stone and wood products.
Resilient flooring will remain the second most widely used type of floor
covering, with sales advances stimulated by its comparatively low cost, as well
22
as by favorable performance characteristics such as high underfoot comfort,
noise absorption, durability and wear resistance. (RESEARCH FROM THE FREEDONIA
GROUP, DECEMBER, 2006)
Wood protection coatings and preservatives demand will achieve the most
favorable gains in interior wood applications, such as flooring and cabinets.
Flooring and cabinet production will be promoted by growth in repair and
improvement spending, as the purchase of these items is common during remodeling
activity. In order to maintain wood's position in interior uses, wood coating
suppliers will strive to develop product lines that feature more colors,
improved efficiency and enhanced durability. (RESEARCH FROM THE FREEDONIA GROUP,
DECEMBER 2005.)
Internet Industry
The distribution of products over the Internet is one of the fastest growing
business segments in the world. Management believes that with the proper
marketing campaign, Muskoka's electronic-commerce enabled website can develop
into profitable business selling hardwood flooring products directly to
prospective retail customers as well as businesses and building contractors
involved in the new home construction or renovation industries.
Target Market
Muskoka intends to increase customer awareness and demand for hardwood flooring
products by implementing advertising and promotional campaigns addressed
directly to businesses who are involved in the new home construction or
renovation industry, as well as to individual customers who are seeking such
materials for "do-it-yourself" home renovation projects.
Marketing and Strategy
Muskoka is currently in the process of developing an Internet website with full
electronic commerce capabilities, which will be used to offer our products for
sale to the consumer (www.muskokaflooring.net). Muskoka plans to promote the
website and products listed by conventional advertising and marketing. Marketing
programs will require the bulk of capital expenditure during the initial phases
of Muskoka's business development. Marketing strategies will be designed to
ultimately get consumers to Muskoka's website. The Company plans to accomplish
this through various means including, but not limited to, radio and print media,
and Internet advertising. In addition, Muskoka intends to increase customer
awareness and demand for hardwood flooring products by implementing advertising
and promotional campaigns addressed directly to businesses who are involved in
the new home construction or renovation industry, as well as to individual
customers who are seeking to such materials for "do-it-yourself" home renovation
projects. Management believes that direct marketing will provide an effective
method for selling products and provide the capability to measure results of
sales.
The Company's objective will be to build customer awareness of Muskoka's
business; specifically targeting both flooring contractors, as well as retail
"do-it-yourself" customers. Muskoka will focus on continually seeking to acquire
new visitors to its website at www.muskokaflooring.net. Management believes one
of the best ways to attract this target audience is to achieve high visibility
in the places where prospective customers are likely to be browsing. Muskoka's
online campaigns will likely target sites that generate high traffic from
Internet users who fit Muskoka's customer profile. In order to create this
market presence and increase customer awareness, Muskoka intends to promote our
website on the most effective search engines, directories, and promotional sites
the Internet offers. However, to date, there have been no arrangements or
negotiations with any company regarding any alliance of any kind, for the above
stated marketing strategies.
It is important to note that Muskoka has not yet fully developed our website,
and there can be no assurance that Muskoka will be able to implement any
marketing campaigns and strategies successfully.
While listing a website with search engines and promotional websites will be a
high priority for the foundation of Muskoka's marketing campaign, targeted links
with websites of similar interest will likely be another method management will
employ to obtain visitors that are interested in Muskoka's products on its
website such as home improvement type businesses, including but not limited to
websites and vendors that sell/distribute home improvement or renovation goods
and products.
23
Muskoka plans to search for websites that are of similar interest to our target
audience in order to place targeted links. These links will have the potential
to increase targeted traffic to Muskoka's website at a relatively nominal fee.
Moreover, Muskoka intends to design a professional banner and place it with
various websites on a "reciprocal" basis and may also purchase commercial online
ad banners on highly trafficked websites that appeal to Muskoka's target
audience. Muskoka plans to work with a third party company to send electronic
message postings about our offerings in the various online communities that are
visited by our target audience. To date, no specific arrangements or
negotiations have been made with any such company.
Current Market Conditions
Management believes that the Internet as a medium for conducting business will
continue to grow, particularly with the retail sales of hardwood flooring goods
and products. For comments on the overall flooring industry, see "The Wood
Flooring Industry", in this Prospectus.
Employees
Muskoka has no employees. Presently, Gord Cotton, officer/director, plans to
devote approximately 15 hours per month, on the business.
Competition
The hardwood flooring products and materials market will continue to evolve and
is extremely competitive, with competition likely to develop and intensify in
the future. Management believes that it will be able to compete within the
market by providing a high quality, user friendly website, where customers will
be comfortable in purchasing hardwood flooring products and materials. However,
Muskoka currently has not fully developed its website and there can be no
assurance that the Company will be able to develop a website to which consumers
will be receptive. In addition, there are competitors that are already well
established and have greater financial resources than those of Muskoka. Muskoka
would likely not be able to compete with these established companies if they
expanded their business into on-line sales of hardwood flooring products and
materials directly related to the Company's proposed business. Also, additional
start-up companies may exist seeking to capitalize within the same marketplace
that Muskoka anticipates profiting from, which would present additional
competition to the Company that it may not be able to overcome, resulting in
failure of the business plan.
Although the market is highly competitive Muskoka believes there are significant
market opportunities for the sales of hardwood flooring products and materials
through the Internet. Management believes it will be able to set itself apart by
focusing its resources on marketing and providing a comprehensive distributor
catalog on a website that is easy to navigate and provides quality information
pertaining to the hardwood flooring industry as it relates to goods and
products. In general, Muskoka's objective for the shopper is to provide
solutions through a broad choice of quality flooring products along with
detailed information on each product listed on the website. Currently, Muskoka
has not fully developed its website (www.muskokaflooring.net).
The information within this registration statement focuses primarily on details
regarding hardwood flooring goods and products and not on the flooring industry
as a whole, in which Muskoka plans to operate. Potential investors should
conduct their own separate investigation of the flooring industry in order to
obtain a broader insight in assessing Muskoka's future business prospects.
Patents
Muskoka Flooring Corporation holds no patents.
Government Regulation
Government approval is not necessary for our business; however, the majority of
our products and materials may be imported from countries which levy tariffs on
exports and as such, Muskoka must abide by all import/export rules and
regulations, and must constantly monitor said regulations for changes that may
24
impact our business model. Other than the cost of importing products and
materials it is anticipated that government regulations will have little or no
effect on Muskoka's proposed business.
Reports to security holders
Muskoka is not required to deliver an annual report to security holders and we
will not voluntarily send annual reports. Muskoka Flooring Corporation does file
annual, quarterly, current reports, proxy statements and other information
statements with the Securities and Exchange Commission (the "Commission"). You
may read and copy any materials we file with this Commission at the SEC's Public
Reference Room at 100 F Street, NE., Washington, D.C. 20549 on official business
days during the hours of 10 a.m. to 3 p.m. You may obtain information on the
operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission also maintains an Internet site that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the Commission by going to
http://www.sec.gov.
DESCRIPTION OF PROPERTY
Muskoka Flooring Corporation's principle address is P.O. Box 293, 33 Card
Avenue, Perkinsfield, Ontario, Canada L0L 2J0. Mr. Gord Cotton,
Officer/Director, is currently providing his home office for Muskoka's office
and mailing address. Mr. Cotton plans to continue to contribute this office
space at no cost to the Company until such a time that the Company begins
operations. The telephone number is (705) 794-9481.
Muskoka believes the property arrangement satisfies the Company's current needs
and will be adequate up to the point that Muskoka begins operations, which is
currently estimated to be in the First Quarter of 2009 at which point it may be
required to rent or lease commercial property that is capable of providing
adequate office space. Management anticipates rent on a per month basis for
adequate commercial space will cost Muskoka approximately $1,000. This estimate
is based upon local commercial spaces with approximately 500 to 1,000 square
feet of office space. However, management plans to continue to utilize Mr.
Cotton's home office until that space is no longer adequate. At this time no
commercial property has been secured by Muskoka and there can be no assurance
that an adequate space will be found by Muskoka when needed; or if adequate
space can be found at the price currently estimated by management.
LEGAL PROCEEDINGS
Muskoka Flooring Corporation is not a party to or aware of any threatened
litigation of a material nature.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
There is no trading market for Muskoka Flooring's Common Stock at present and
there has been no trading market to date. There is no assurance that a trading
market will ever develop, or, if such a market does develop that it will
continue.
Gord Cotton, officer and director, currently owns 1,000,000 common shares. The
shares were purchased on February 28, 2006 and are deemed restricted securities
pursuant to Rule 144. The Company is not registering any of the 1,000,000 Rule
144 shares on this Registration Statement. In February, 2007, the 1,000,000 Rule
144 shares purchased by Mr. Gord Cotton will be eligible for sale pursuant to
Rule 144(d)(1) and Rule 144(e)(1). However, the amount of shares that may be
sold by Mr. Gord Cotton will be limited to the amount of securities sold,
together with all the sales of restricted and other sold common stock within the
previous three months which shall not exceed the greater (i) one percent of the
shares or other units of the class outstanding as shown by the most recent
report or statement published by the Company, or (ii) if and when a market
develops the average weekly reported volume of trading of the Common Stock on
all national securities exchanges and quotation systems during the four calendar
weeks preceding the filing notice required under Rule 144(h).
25
Holders
As of the date of this registration statement, there were a total of thirty-five
(35) active stockholders, including the officer and director.
Dividends
Muskoka Flooring Corporation has not paid any dividends to date, and has no
plans to do so in the foreseeable future.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Muskoka has had no disagreements with its accountants, and has no further
financial disclosure other than the financial statements included herein.
DIRECTORS, OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following table and subsequent discussion contain information concerning our
directors and executive officers, their ages, term served and all of our
officers and their positions, who will serve in the same capacity with Muskoka
Flooring Corporation upon completion of the offering.
Name Age Term Served Title
________________________________________________________________________
Gord Cotton 70 Since February 26, 2006 President, Director and
Chief Financial Officer
The above persons may be deemed a "promoter" of Muskoka Flooring Corporation as
that term is defined in the rules and regulations promulgated under the
Securities and Exchange Act of 1933.
There are no other persons nominated or chosen to become directors or executive
officers, nor do we have any employees other than above mentioned officer and
director.
Officer and Director Background:
Gordon Norman Cotton was born in 1937 in Toronto, Ontario. For 35 years he was
employed in various positions by Bell Canada. After retiring from Bell Canada in
1991 he relocated to north central Ontario where he developed an interest in
hardwood flooring and subsequently began researching and analyzing potential
business models. Mr. Cotton has traveled to China to attempt to establish
business relationships with manufacturers and distributors of hardwood flooring
with the intent of importing hardwood flooring products and selling them in
North America via the internet. Mr. Cotton currently anticipates devoting at
most fifteen hours to the development of the Company per month, as he is retired
and has other interests beyond Muskoka Flooring Corporation.
Currently Muskoka has no employees other than the current officer and director,
Gord Cotton, which may create potential conflicts of interest. The Officer
anticipates devoting, at a minimum fifteen hours per month to the furtherance of
Muskoka over the next twelve months. The above times are estimations that will
likely increase within the next twelve months as Muskoka continues to develop
its proposed business plan as set forth herein. However, there is no guarantee
that we will be successful in developing the business as we are subject to the
many risks described in this registration statement beginning on page 6.
Our directors hold office until the next annual meeting of shareholders and the
election and qualification of their successors. Directors receive no
compensation for serving on the board of directors other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are appointed by
the board of directors and serve at the discretion of the board.
We have not entered into any employment agreements with any of our employees and
employment arrangements are all subject to the discretion of our board of
directors.
26
No executive Officer or Director of Muskoka Flooring Corporation has been
convicted in any criminal proceeding (excluding traffic violations) or is the
subject of a criminal proceeding that is currently pending.
No executive Officer or Director of Muskoka Flooring Corporation is the subject
of any pending legal proceedings.
EXECUTIVE COMPENSATION
Muskoka has made no provisions for cash compensation or for non-cash
compensation to our officers and director. No salaries are being paid at the
present time, and will not be paid unless, and until, there is available cash
flow being generated from operations to pay salary. There have been no grants of
options or SAR grants given to any of our executive officers for the life of
Muskoka.
Muskoka does not presently have a stock option plan. However, in the future,
Muskoka may develop an incentive based stock option plan for our officers and
directors and may reserve up to ten percent of our outstanding shares of common
stock for that purpose.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as it relates to our named Director and
Executive Officer, and each person known to Muskoka to be the beneficial owner
of more than five percent (5%) of said securities, and all of our directors and
executive officers as a group:
Name and Position Shares Percent Security
________________________________________________________________________________
Gord Cotton
President and Director 1,000,000 67.45% Common
================================================================================
Officers and Directors as
a Group 1,000,000 67.45% Common
Gord Cotton's address is P.O. Box 293, 33 Card Avenue, Perkinsfield, Ontario,
Canada L0L 2J0.
The above referenced common shares were paid for and issued on February 28,
2006, for consideration of $0.015 per share and a total consideration of
$15,000.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
On December 8, 2005, the Company issued 171,600 common shares at $0.015 per
share to the founding sole director and President, Paul Massi for net cash
proceeds of $2,574 to the Company. Mr. Massy resigned as an officer, director
and President on February 26, 2006 and Gordon Cotton was appointed sole director
and President. On February 28, 2006 the Company issued 828,400 common shares at
$0.015 to Mr. Cotton for net cash proceeds of $12,426. In a private transaction,
Mr. Cotton purchased Mr. Massi's 171,600 shares at the price of $0.015 per share
increasing Mr. Cotton's share holding to 1,000,000 common shares for total
consideration of $15,000. These shares are considered restricted under Rule 144
of the Securities and Exchange Commission Act (the "Act").
The thirty-four (34) selling shareholders of Muskoka Flooring Corporation
currently hold a total of 482,500 common shares and paid consideration of $0.03
per share. The common shares were issued between January and October of 2006.
These shares were issued under Regulation S promulgated under the Securities Act
of 1933 to the thirty-four private non-affiliated shareholders. At the time
these shares were purchased none of the thirty-four shareholders were an
affiliated shareholder, as none owned in excess of ten percent of the issued and
outstanding shares of the Company, and none were officers, directors, or control
persons of the Company. The foregoing purchases and sales were exempt from
registration under the Securities Act pursuant to Section 3(b) on the basis that
the transactions did not involve a public offering.
27
Related Party Transactions
Currently, there are no contemplated transactions that Muskoka may enter into
with our officers, directors or affiliates. If any such transactions are
contemplated we will file such disclosure in a timely manner with the SEC on the
proper form making such transaction available for the public to view.
Muskoka has no formal written employment agreement or other contracts with our
current officer, and there is no assurance that the services to be provided by
him will be available for any specific length of time in the future. Gord Cotton
anticipates initially devoting fifteen hours per month of his available time to
Muskoka's affairs. If and when the business operations increase and a more
extensive time commitment is needed, Mr. Cotton is prepared to devote more time
to Muskoka's affairs, in the event that becomes necessary. The amounts of
compensation and other terms of any full time employment arrangements would be
determined, if and when, such arrangements become necessary.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Director and Officer are indemnified as provided by the Delaware Revised
Statutes and our bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act of 1933 is against public policy as expressed in the
Securities Act of 1933, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the securities
being registered, we will, unless in the opinion of our legal counsel the matter
has been settled by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate jurisdiction.
We will then be governed by the court's decision.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all estimated costs and expenses, payable by the
issuer in connection with the maximum offering for the securities included in
this registration statement:
Amount
- Legal/Accounting $5,000
- Postage/Printing 500
- Transfer Agent 2,000
=============================================
Total $7,500
Note: All expenses are estimates.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Company's Articles of Incorporation and By-Laws, the Company may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in the Company's best interest. No officer
or director may be may be indemnified, however, where the officer or director
acted committed intentional misconduct, fraud, or an intentional violation of
the law.
The Company may advance expenses incurred in defending a proceeding. To the
extent that the officer or director is successful on the merits in a proceeding
as to which he is to be indemnified, the Company must indemnify him against all
expenses incurred, including attorney's fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred
in defending the proceeding, and if the officer or director is judged liable,
only by a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Delaware.
Regarding the indemnification for liabilities arising under the Securities Act
of 1933, which may be permitted to officers and directors under Delaware law,
the Company is informed that, in the opinion of the Securities and Exchange
28
Commission, indemnification is against public policy, as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by the Company's officer(s), director(s),
or controlling person(s) in connection with the securities being registered, we
will, unless in the opinion of the Company's legal counsel the matter has been
settled by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate jurisdiction.
The Company will then be governed by the court's decision.
RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth information relating to all previous sales of common
stock by the Registrant, which sales were not registered under the Securities
Act of 1933.
We completed an offering of 1,000,000 shares of our common stock at a price of
$0.015 per share to our President, Gord Cotton, on February 26, 2006. The total
amount received from this offering was $ 15,000. These shares were purchased
pursuant to Regulation S of the Securities Act. The shares are deemed restricted
securities pursuant to Rule 144. The Company is not registering any of the
1,000,000 Rule 144 shares on this registration statement. In February, 2007, the
1,000,000 Rule 144 shares purchased by Mr. Cotton will be eligible for sale
pursuant to Rule 144(d)(1) and Rule 144(e)(1). However, the amount of shares
that may be sold by Mr. Cotton will be limited to the amount of securities sold,
together with all the sales of restricted and other sold common stock within the
previous three months which shall not exceed the greater (i) one percent of the
shares or other units of the class outstanding as shown by the most recent
report or statement published by the Company, or (ii) if and when a market
develops the average weekly reported volume of trading of the Common Stock on
all national securities exchanges and quotation systems during the four calendar
weeks preceding the filing notice required under Rule 144(h). The foregoing
purchase and sale was exempt from registration under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to Section 4(2) on the basis that
the transaction did not involve a public offering.
Between January 1, 2006 and October 10, 2006 we completed an offering of 482,500
shares of our common stock at a price of $0.03 per share to a total of
thirty-four purchasers. The total amount received from this offering was
$14,475. At the time these shares were purchased none of the thirty-four (34)
shareholders were an affiliated shareholder, as none owned in excess of ten
percent of the issued and outstanding shares of the Company, and none were
officers, directors, or control persons of the Company. The foregoing purchases
and sales were exempt from registration under the Securities Act pursuant to
Section 3(b) on the basis that the transactions did not involve a public
offering.
These shares were purchased pursuant to Regulation S of the Securities Act. The
purchasers in this offering were as follows:
______________________________________________________________
Purchasing Shareholder Shares Purchased
______________________________________________________________
Gale Beauchamp 12,500
______________________________________________________________
Melissa Beauchamp 12,500
______________________________________________________________
Cindy Beauchamp 12,500
______________________________________________________________
Jill Allday 12,500
______________________________________________________________
Jon Allday 12,500
______________________________________________________________
Roy Partanen 12,500
______________________________________________________________
Moira Partanen 12,500
______________________________________________________________
Mark Cotton 12,500
______________________________________________________________
Elizabeth Wadeson 12,500
______________________________________________________________
Scott Cotton 12,500
______________________________________________________________
Gail Cotton 12,500
______________________________________________________________
Sergio Galli 12,500
______________________________________________________________
Laurel Galli 12,500
______________________________________________________________
Tony Galli 12,500
______________________________________________________________
Rosanna Francioni 12,500
______________________________________________________________
Sandra Celebre 12,500
______________________________________________________________
29
______________________________________________________________
Tonina Viola 12,500
______________________________________________________________
Toni Viola 12,500
______________________________________________________________
Ken King 12,500
______________________________________________________________
Sharon King 12,500
______________________________________________________________
Bruce Borrie 12,500
______________________________________________________________
Denise Neville 12,500
______________________________________________________________
Brandon Neville 12,500
______________________________________________________________
Jackie Borrie 12,500
______________________________________________________________
Larry MacDonald 12,500
______________________________________________________________
Debbie MacDonald 12,500
______________________________________________________________
Margaret Hie 12,500
______________________________________________________________
Shaun Delaney 12,500
______________________________________________________________
Narendra Parbhunauth 12,500
______________________________________________________________
Vadewaitie Persaud 12,500
______________________________________________________________
Luis Labardo 12,500
______________________________________________________________
Lori Labardo 12,500
______________________________________________________________
Abigail Bagwell 12,500
______________________________________________________________
Zukang Xu 70,000
______________________________________________________________
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this registration statement:
Exhibit Number Exhibit Name
______________ ____________
3.1 * Certificate of Incorporation
3.2 * By-Laws
5.1* Opinion re: Legality
23.1 Consent of Experts
* Incorporated by reference to the Company's filing with the Commission on
December 21, 2007
All other Exhibits called for by Rule 601 of Regulation S-K are not applicable
to this filing. Information pertaining to our common stock is contained in our
Certificate of Incorporation and By-Laws.
FINANCIAL STATEMENTS
Our financial statements immediately follow:
FINANCIAL STATEMENTS to December 31, 2007 (Audited)
Report of independent registered public accounting firm
Balance Sheets
Statements of Operations
Statement of Stockholders' Equity
Statements of Cash Flows
Notes to the Financial Statements
30
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 2007
REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
BALANCE SHEET
STATEMENTS OF OPERATIONS
STATEMENTS OF STOCKHOLDERS' EQUITY
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
31
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS
MUSKOKA FLOORING CORPORATION
(A Development Stage Company)
We have audited the accompanying balance sheet of Muskoka Flooring Corporation
(A Development Stage Company) as of December 31, 2007 and 2006, and the related
statements of operations, stockholders' equity and cash flows for the years
2007, 2006 and from Inception on July 20, 2005 through December 31, 2007. 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 in accordance with 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Muskoka Flooring Corporation (A
Development Stage Company) as of December 31, 2007 and 2006, and the results of
its operations and its cash flows for the years 2007, 2006 and from Inception on
July 20, 2005 through December 31, 2007, 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 1 to the
financial statements, the Company has an accumulated deficit of $29,630 as of
December 31, 2007, which raises substantial doubt about its ability to continue
as a going concern. Management's plans concerning these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ MOORE & ASSOCIATES, CHARTERED
_________________________________
Moore & Associates Chartered
Las Vegas, Nevada
March 19, 2008
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NV 89146
(702) 253-7499 FAX (702) 253-7501
32
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31, 2007 December 31, 2006
(Audited) (Audited)
________________________________________________________________________________________________________
ASSETS
CURRENT ASSETS
Cash $ 7,293 $ 270
Prepaid Expense 950
________ ________
TOTAL CURRENT ASSETS 8,243 270
________ ________
TOTAL ASSETS $ 8,243 $ 270
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 8,398 $ 2,000
Due to related party - -
________ ________
TOTAL CURRENT LIABILITIES 8,398 2,000
________ ________
TOTAL CURRENT LIABILITIES $ 8,398 $ 2,000
________ ________
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock (Note 3)
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
Subscriptions Receivable - (17,032)
________ ________
Deficit accumulated during the development stage (29,630) (14,173)
________ ________
TOTAL EQUITY (155) (1,730)
________ ________
TOTAL LIABILITIES & EQUITY $ 8,243 $ 270
======== ========
The accompanying notes are an integral part of these financial statements
33
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Cumulative results
of operations from
July 20, 2005 (date
Year Year of inception) to
2007 2006 December 31, 2007
_______________________________________________________________________________________
EXPENSES
Office and general $ (32) $ (394) $ (729)
Exchange - - 169
Professional fees (15,425) (12,802) (29,070)
Provision for Income Taxes - - -
______________________________________________
NET LOSS $ (15,457) $(13,196) $ (29,630)
==============================================
BASIC NET LOSS PER SHARE $ (0.01) $ (0.02) $ (0.03)
==============================================
WEIGHTED AVERAGE
NUMBER OF COMMON 1,482,500 876,017 1,088,623
SHARES OUTSTANDING ==============================================
The accompanying notes are an integral part of these financial statements
34
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (JULY 20, 2005) TO DECEMBER 31, 2007
Deficit
Accumulated
Common Stock Additional Share During the
___________________________ Paid-in Subscription Development
Number of shares Amount Capital Receivable Stage Total
_________________________________________________________________________________________________________________________
Balance, July 20, 2005 - $ - $ - $ - $ - $ -
_________________________________________________________________________________________________________________________
Net Loss, December 31, 2005 - - - - (977) (977)
Common stock issued for cash
at $0.015 per share 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 828,400 83 12,343 (2,557) 9,869
Common stock issued for cash
at $0.030 per share 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 - - - 17,032 - 17,032
_________________________________________________________________________________________________________________________
Balance, December 31, 2007 1,482,500 $ 148 $ 29,327 $ - $(29,630) $ (155)
=========================================================================================================================
The accompanying notes are an integral part of these financial statements
35
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative
results of
operations from
inception (July
Year Year 20, 2005) to
2007 2006 December 31, 2007
___________________________________________________________________________________________
OPERATING ACTIVITIES
Net loss $ (15,457) $ (13,196) $ (29,630)
Adjustment to reconcile net loss to net
cash used in operating activities
- accrued liabilities 6,398 2,000 8,398
- prepaid expense (950) - (950)
-shareholder loan - (991) -
___________________________________________________________________________________________
NET CASH USED IN OPERATING (10,009) (12,187) (22,182)
ACTIVITIES
___________________________________________________________________________________________
INVESTING ACTIVITIES - - -
___________________________________________________________________________________________
FINANCING ACTIVITIES
Proceeds from sale of common stock - 26,901 29,475
Subscription receivable - (17,032) -
Subscriptions received 17,032 -
___________________________________________________________________________________________
NET CASH PROVIDED BY FINANCING
ACTIVITIES 17,032 9,869 29,475
___________________________________________________________________________________________
NET INCREASE (DECREASE) IN CASH 7,023 (2,318) 7,293
CASH, BEGINNING OF PERIOD 270 2,588 -
___________________________________________________________________________________________
CASH, END OF PERIOD $ 7,293 $ 270 $ 7,293
===========================================================================================
Supplemental cash flow information.
Cash paid for:
Interest $ - $ - $ -
===========================================================================================
Income taxes $ - $ - $ -
===========================================================================================
The accompanying notes are an integral part of these financial statements
36
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2007
________________________________________________________________________________
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________
Muskoka Flooring Corporation. (the "Company") is in the initial development
stage and was organized to engage in the business of selling a full line of
hardwood flooring products, materials, tools and accessories over the internet.
GOING CONCERN
The Company commenced operations on July 20, 2005 and has not realized revenues
since inception. The Company has a deficit accumulated to the period ended
December 31, 2007 in the amount of $29,630. The ability of the Company to
continue as a going concern is dependent on raising capital to fund its business
plan and ultimately to attain profitable operations. Accordingly, these factors
raise substantial doubt as to the Company's ability to continue as a going
concern. The Company is funding its initial operations by way of Founders
shares. As of December 31, 2007 the Company had issued 1,000,000 founder shares
at $0.015 per share for net proceeds of $15,000 to the Company and issued
482,500 private placement shares at $0.03 per share for net proceeds $14,475.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________
ORGANIZATION
The Company was incorporated on July 20, 2005 in the State of Delaware. The
fiscal year end of the Company is December 31.
BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with United States generally accepted accounting
principals.
DEVELOPMENT STAGE COMPANY
The Company is considered to be in the development stage as defined in Statement
of Financial Accounting Standards No.7.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Accordingly,
actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
All significant financial assets, financial liabilities and equity instruments
of the Company are either recognized or disclosed in the financial statements
together with other information relevant for making a reasonable assessment of
future cash flows, interest rate risk and credit risk. Where practical the fair
values of financial assets and financial liabilities have been determined and
disclosed; otherwise only available information pertinent to fair value has been
disclosed.
LOSS PER COMMON SHARE
Basic earnings(loss) per share includes no dilution and is computed by dividing
income (loss) available to common stockholders by the weighted average number of
common shares outstanding for the period. Dilutive earnings (loss) per share
reflect the potential dilution of securities that could share in the earnings of
the Company. Because the Company does not have any potential dilutive
securities, the accompanying presentation is only on the basic loss per share.
37
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2007
________________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances and tax loss carry forwards. Deferred tax assets and liabilities are
measured using enacted or substantially enacted tax rates expected to apply to
the taxable income in the years in which those differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the date
of enactment or substantive enactment. As at December 31, 2007 the Company had
net operating loss carry forwards, however, due to the uncertainty of
realization, the Company has provided a full valuation allowance for the
deferred tax assets resulting from the loss carry forwards.
STOCK-BASED COMPENSATION
SFAS No. 123 "ACCOUNTING FOR STOCK-BASED COMPENSATION"., as issued by the
Financial Accounting Standards Board ("FASB"), as amended by SFAS No.148
"ACCOUNTING FOR STOCK-BASED COMPENSATION-TRANSITION AND DISCLOSURE", encourages
the use of fair value based method of accounting for the stock-based employee
compensation. SFAS No. 123 allows entities to continue to apply the intrinsic
value method prescribed by Accounting Principles Board Opinion 25, "ACCOUNTING
FOR STOCK ISSUED TO EMPLOYEES" ("APB 25") and related interpretations and
provide pro forma disclosures of net income (loss) and earnings (loss) per
share. Under APB 25, compensation cost is measured based on the excess, if any,
of the quoted market price or the fair value of the company's stock at the grant
date (or a later date where the option has variable terms that depend on events
after the date of grant) over the amount an employee must pay to acquire the
stock. Compensation expense is recognized immediately for past services and
pro-rata for future services over the option-vesting period. SFAS 123 allows but
does not require that compensation cost resulting from the granting of stock
options be measured and reported currently in the income statement and allocated
over the remaining life of the option.
The Company has elected to follow APB 25 and provide the pro forma disclosures
required under SFAS 123 with respect to stock options granted to employees. The
Company will provide pro-forma information and expense information,
respectively, as required by SFAS No. 123 showing the results of applying the
fair value method using the Black-Scholes option pricing model.
The Company accounts for equity instruments issued in exchange for the receipt
of goods or services from other than employees in accordance with SFAS No. 123
and the conclusions reached by the Emerging Issues Task Force in Issue No.
96-18. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF 96-18.
The Company has also adopted the provisions of the FASB Interpretation No. 44,
ACCOUNTING OF CERTAIN TRANSACTIONS INVOLVING STOCK COMPENSATION-AN
INTERPRETATION OF APB OPINION NO. 25 ("Fin 44"), which provides guidance as to
certain applications of APB 25. Fin 44 is generally effective July 1, 2000 with
the exception of certain events occurring after December 15, 1998.
To November 30, 2006 the Company has not adopted a stock option plan and has not
granted any stock options. Accordingly no stock-based compensation has been
recorded to date.
38
MUSKOKA FLOORING CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2007
________________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS 155 establishes framework for measuring fair value and
expands disclosures about fair value measurements. The changes to current
practice resulting from the application of this statement relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. The statement is effective
for fiscal years beginning after November 15, 2007 and periods with those fiscal
years.
The Financial Accounting Standards Board has issued SFAS No. 155 "ACCOUNTING FOR
CERTAIN HYBRID FINANCIAL INSTRUMENTS AN AMENDMENT OF FASB STATEMENTS NO. 133 AND
140" and No. 156 "ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS - AN AMENDMENT OF
FASB STATEMENT NO. 140", but they will not have a material effect in the
Company's results of operations or financial position.
The adoption of these new pronouncements is not expected to have a material
effect on the Company's financial position or results of operations.
NOTE 3- STOCKHOLDERS EQUITY
________________________________________________________________________________
The Company's capitalization is 75,000,000 common shares with a par value of
$0.0001 per share.
On December 8, 2005, the Company issued 171,600 common shares at $0.015 per
share to the Founding sole director and President of the Company for net cash
proceeds of $2,574 to the Company. On February 28, 2006 the Company issued
828,400 common shares at $0.015 to the succeeding and current sole director and
President for net cash proceeds of $12,426. The Company issued 482,500 shares at
$0.030 per share for net proceeds to the Company of $14,475. Total proceeds to
the Company of $29,475.
NOTE 4 - INCOME TAXES
________________________________________________________________________________
The Company has adopted the FASB No. 109 for reporting purposed. As of December
31, 2007 the Company had a net operating loss carry forwards of approximately
$29,630 that may be available to reduce future years' taxable income and will
expire beginning in 2026. Availability of loss usage is subject to change of
ownership limitations under Internal Revenue Code 382. Future tax benefits which
may arise as a result of these losses have not been recognized in these
financial statements, as their realization is determined not likely to occur and
accordingly, the Company has recorded a valuation allowance for the future tax
loss carryforwards.
39
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement t:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424 (b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
2. That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
4. That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary
offering of the securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on our behalf by the
undersigned, in the City of Perkinsfield, Ontario, on April 2, 2008.
MUSKOKA FLOORING CORPORATION
/s/ GORD COTTON
____________________________
Gord Cotton
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ GORD COTTON
____________________________
Gord Cotton
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
April 2, 2008
41