CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
For the Fiscal Year Ended December 31, 2007
KINGDOM KONCRETE, INC.
(Exact name of registrant as specified in its charter)
Nevada 333-138194 20-4672080
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4232 E. Interstate 30, Rockwall, Texas 75087
(Address of principal executive offices (zip code))
972-771-4205
(Registrant's telephone number, including area code)
(Former address)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the past
12 months and (2) has been subject to such filing requirement for the past
90days Yes [X] No [ ].
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer [ ]. Accelerated Filer [ ].
Non-Accelerated Filer [ ]. Smaller Reporting Company [X]
Indicate by a check mark whether the company is a shell company (as defined by
Rule 12b-2 of the Exchange Act: Yes [ ] No [ X ].
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 2007: $ -0-
Shares of common stock outstanding at December 31, 2007: 5,199,500
PART I.
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, which we refer
to in this annual report as the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, which we refer to in this annual
report as the Exchange Act. Forward-looking statements are not statements of
historical fact but rather reflect our current expectations, estimates and
predictions about future results and events. These statements may use words such
as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project"
and similar expressions as they relate to us or our management. When we make
forward-looking statements, we are basing them on our management's beliefs and
assumptions, using information currently available to us. These forward-looking
statements are subject to risks, uncertainties and assumptions, including but
not limited to, risks, uncertainties and assumptions discussed in this annual
report. Factors that can cause or contribute to these differences include those
described under the headings "Risk Factors" and "Management Discussion and
Analysis and Plan of Operation."
If one or more of these or other risks or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may vary materially
from what we projected. Any forward-looking statement you read in this annual
report reflects our current views with respect to future events and is subject
to these and other risks, uncertainties and assumptions relating to our
operations, results of operations, growth strategy and liquidity. All subsequent
written and oral forward-looking statements attributable to us or individuals
acting on our behalf are expressly qualified in their entirety by this
paragraph. You should specifically consider the factors identified in this
annual report which would cause actual results to differ before making an
investment decision. We are under no duty to update any of the forward-looking
statements after the date of this annual report or to conform these statements
to actual results.
ITEM 1. DESCRIPTION OF BUSINESS
Kingdom Koncrete, Inc. is a Nevada corporation which was incorporated in 2006
and immediately purchased 100% of the outstanding stock of Kingdom Conctete,
Inc., a Texas corporation which was formed on July 18, 2003. The transaction was
accounted for as a reverse merger.. In this filing, we refer to Kingdom
Koncrete, Inc. as "we," "us", "the Company" or "Kingdom" unless we specifically
state otherwise or the context indicates otherwise. We specialize in providing
pre-mixed concrete into our mobile mixer trailers which are then towed by one of
our customers to a job site of their choosing. The funds from this offering will
allow us to invest in the growth of our company through equipment purchases and
advertising as well as possible strategic expansion and acquisition.
Kingdom Concrete serves contractors and homeowners with transit-mix trailers for
small-pour concrete jobs. This process saves time, money and labor on a
homeowners or small business' ready-mix cement project.
Kingdom Koncrete, Inc. specializes in providing pre-mixed concrete into our
mobile mixer trailers which are then towed by one of our customers to a job site
of their choosing. Kingdom Concrete serves contractors and homeowners in
NorthTexas with transit-mix trailers for small-pour concrete jobs. This process
saves time, money and labor on a homeowners or small business' ready-mix cement
project. Large concrete companies generally don't like small jobs as they are
inherently unprofitable due to the small amount of concrete delivered. In
addition, large concrete companies add a delivery fee for less than a full load
and additional fees if the load cannot be unloaded immediately. Hand-mixing
seems less expensive until all the costs are added up. Sufficient ready-mix
2
sacks for one yard of concrete costs more than $110. Hand mixing is also
back-breaking labor that results in an uneven distribution of moisture and
aggregate.
We sell concrete on small, manageable, mobile mixing trailers to help complete a
smaller project. The result is less cost and a better product. One trailer can
mix from 1/4 to 1 1/4 yards for patios, sidewalks, slabs, fence posts or other
concrete work. We sell to companies, municipalities, subcontractors and
homeowners. Our transit-mix trailers are a completely different concept. In the
past, with other types of pre-mixed concrete, the mix would settle out and begin
to set as it was being delivered to the job site, giving a limited range and an
inferior product that was difficult to work with. Our trailers mix on the way to
the job, just like the "big" trucks. The concrete arrives ready for the job.
Our pricing is competitive with hardware store ready-mix sacks and much easier
to manage physically. Compared to cement truck prices for small-pours, we
provide an economic benefit in that the customer pays only for what they use and
need. Pricing is structured on a residential, contractor, and multiple load
basis. As of September 30, 2007, our general pricing structure was as follows:
============================================================================
1/4 yard 1/2 yard 3/4 yard 1 yard 1 1/4 yard
============================================================================
4 bag $73 $86 $99 $112 $125
============================================================================
5 bag $75 $89 $103 $118 $132
============================================================================
6 bag $76 $92 $107 $123 $139
============================================================================
'4 bag', '5 bag', '6 bag' refer to the proportion of cement in the mix. The
higher the bag count, the higher the PSI (strength) of the concrete. We provide
flexibility in that a customer can order the appropriate mix for the project,
for example:
o 4 bag mix: Fence posts
o 5 bag mix: Sidewalks, slabs, or footers
o 6 bag mix: Driveways
As of December 31, 2007, we had 4 portable ready-mixed concrete trailers and one
batch plant. Our operations consist principally of formulating, preparing and
delivering ready-mixed concrete to the trailers at our batch plant in Rockwall
Texas. Our marketing efforts primarily target general contractors, developers
and home builders whose focus is on price, flexibility, and convenience.
INDUSTRY OVERVIEW
General
Ready-mixed concrete is a highly versatile construction material that results
from combining coarse and fine aggregates, such as gravel, crushed stone and
sand, with water, various admixtures and cement. Ready-mixed concrete can be
manufactured in thousands of variations, which in each instance may reflect a
specific design use. Manufacturers of ready-mixed concrete generally maintain
only a few days' inventory of raw materials and must coordinate their daily
materials purchases with the time-sensitive delivery requirements of their
customers.
The quality of ready-mixed concrete is time-sensitive, as it becomes difficult
to place within 90 minutes after mixing. Many ready-mixed concrete
specifications do not allow for its placement beyond that time. Consequently,
3
the market for a permanently installed ready-mixed concrete plant generally is
limited to an area within a 25-mile radius of its location. Concrete
manufacturers produce ready-mixed concrete in batches at their plants and use
mixer and other trucks to distribute and place it at the job sites of their
customers. These manufacturers generally do not provide paving or other
finishing services, which construction contractors or subcontractors typically
perform.
Concrete manufacturers generally obtain contracts through local sales and
marketing efforts they direct at general contractors, developers and home
builders. As a result, local relationships are very important. Four major
segments of the construction industry accounted for the following approximate
percentages of the total volume of ready-mixed concrete produced in the United
States in 2005:
Residential construction 34 %
Commercial and industrial construction 19 %
Street and highway construction and paving 18 %
Other public works and infrastructure construction 29 %
Historically, barriers to the start-up of a new ready-mixed concrete
manufacturing operation were low. During the past several years, public concerns
about dust, process water runoff, noise and heavy mixer and other truck traffic
associated with the operation of ready-mixed concrete plants and their general
appearance have made obtaining the permits and licenses required for new plants
more difficult. Delays in the regulatory process, coupled with the substantial
capital investment that start-up operations entail, have raised the barriers to
entry for those operations.
OUR BUSINESS STRATEGY
Our objectives are to become the leading provider of ready-mixed concrete in our
primary market and to further expand the geographic scope of our business and,
on a select basis, to integrate our operations vertically through acquisitions
of aggregates supply sources that support our ready-mixed concrete operations.
We plan to achieve this objective by continuing to implement our business
strategy, which includes the primary elements we discuss below.
PURSUING DISCIPLINED GROWTH THROUGH ACQUISITIONS
The U.S. ready-mixed concrete industry, with over 2,300 small, independent
producers, is a fragmented but increasingly consolidating industry. We believe
these industry characteristics present growth opportunities for a company with a
focused acquisition program and access to capital.
Our acquisition program targets opportunities for expanding in our existing
markets and entering new geographic markets in the U.S. We are in the process of
identifying acquisitions that we believe represent attractive opportunities to
strengthen local management, implement cost-saving initiatives, achieve
market-leading positions and establish best practices. We cannot provide any
assurance, however, as to the impact of any future acquisition we may complete
on our future earnings per share.
IMPROVING MARKETING AND SALES INITIATIVES
Our marketing strategy emphasizes the sale of value-added products to customers
more focused on reducing their in-place building material costs than on the
price per cubic yard of the ready-mixed concrete they purchase. We also strive
to increase operating efficiencies. We believe that, if we continue to increase
in size on both a local and national level, we should continue to experience
future productivity and cost improvements in such areas as:
o materials, through procurement and optimized mix designs;
o purchases of mixer trailers and other equipment, supplies, spare
parts and tools;
o vehicle and equipment maintenance; and
4
o insurance and other risk management programs.
OPERATIONS
Our ready-mixed concrete plant consists of a fixed facility that produces
ready-mixed concrete in primarily wet batches. Our fixed-plant facilities
produce ready-mixed concrete that is transported to a job sites by our mixer
trailers
Our wet batch plant serves a local market that we expect will have consistently
high demand as opposed to dry batch plants that will serve markets that we
expect will have a less consistent demand. A wet batch plant generally has a
higher initial cost and daily operating expense but yields greater consistency
with less time required for quality control in the concrete produced and
generally has greater daily production capacity than a dry batch plant. The
batch operator in a dry batch plant simultaneously loads the dry components of
stone, sand and cement with water and admixtures in a mixer truck that begins
the mixing process during loading and completes that process while driving to
the job site. In a wet batch plant, the batch operator blends the dry components
and water in a plant mixer from which the operator loads the already mixed
concrete into the mixer trailer which leaves for the job site promptly after
loading.
Any future decisions we make regarding the construction of additional plants
will be impacted by market factors, including:
o the expected production demand for the plant;
o the expected types of projects the plant will service; and
o the desired location of the plant.
Mixer trailers slowly rotate their loads en route to job sites in order to
maintain product consistency. One of our mixer trailers typically has a load
capacity of 1 to 1 1/4 cubic yards, or approximately 6,000 pounds, and an
estimated useful life of 15 years. A new trailer of this size currently costs
approximately $18,000. As of December 31, 2007 we operate a fleet of 4 mixer
trailers, which had an average age of approximately 4 years.
CEMENT AND OTHER RAW MATERIALS
We obtain most of the materials necessary to manufacture ready-mixed concrete on
a daily basis. These materials include cement, which is a manufactured product,
stone, gravel and sand. Our batch plant typically maintains an inventory level
of these materials sufficient to satisfy its operating needs for a few days.
Cement represents the highest cost material used in manufacturing a cubic yard
of ready-mixed concrete, while the combined cost of the stone, gravel and sand
used is slightly less than the cement cost. We purchase each of these materials
from several suppliers. We are not dependent on any one supplier. We have not
entered into any supply agreements with any of our suppliers.
MARKETING AND SALES
General contractors typically select their suppliers of ready-mixed concrete. We
believe the purchasing decision for many jobs ultimately is relationship-based.
Our marketing efforts target general contractors, developers, and homebuilders
whose focus is on price, flexibility, and convenience.
CUSTOMERS
We rely heavily on repeat customers. Our management is responsible for
developing and maintaining successful long-term relationships with key
customers. We are not dependent on any one customer. Rather, we have built up a
customer base which we market to, and these have developed into steady repeat
customers.
5
COMPETITION
The ready-mixed concrete industry is highly competitive. Our competitive
position in our market depends largely on the location and operating costs of
our ready-mixed concrete plant and prevailing prices in that market. Price is
the primary competitive factor among suppliers for small or simple jobs,
principally in residential construction, while timeliness of delivery and
consistency of quality and service along with price are the principal
competitive factors among suppliers for large or complex jobs. Our competitors
range from small, owner-operated private companies to subsidiaries or operating
units of large, vertically integrated manufacturers of cement and aggregates.
Our vertically integrated competitors generally have greater manufacturing,
financial and marketing resources than we have, providing them with a
competitive advantage. Competitors having lower operating costs than we do or
having the financial resources to enable them to accept lower margins than we do
will have a competitive advantage over us for jobs that are particularly
price-sensitive. Competitors having greater financial resources also may have
competitive advantages over us. See "Risk Factors - We may lose business to
competitors who underbid us and we may be otherwise unable to compete favorably
in our highly competitive industry."
EMPLOYEES
We currently employ one employee, the President.
GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS
A wide range of federal, state and local laws, ordinances and regulations apply
to our operations, including the following matters:
o land usage;
o street and highway usage;
o Air quality; and
o health, safety and environmental matters.
In many instances, we are required to have various certificates, permits or
licenses to conduct our business. Our failure to maintain these required
authorizations or to comply with applicable laws or other governmental
requirements could result in substantial fines or possible revocation of our
authority to conduct some of our operations. Delays in obtaining approvals for
the transfer or grant of authorizations, or failures to obtain new
authorizations, could impede acquisition efforts.
Environmental laws that impact our operations include those relating to air
quality, solid waste management and water quality. These laws are complex and
subject to frequent change. They impose strict liability in some cases without
regard to negligence or fault. Sanctions for noncompliance may include
revocation of permits, corrective action orders, administrative or civil
penalties and criminal prosecution. Some environmental laws provide for joint
and several strict liability for remediation of spills and releases of hazardous
substances. In addition, businesses may be subject to claims alleging personal
injury or property damage as a result of alleged exposure to hazardous
substances, as well as damage to natural resources. These laws also may expose
us to liability for the conduct of or conditions caused by others, or for acts
that complied with all applicable laws when performed.
We have all material permits and licenses we need to conduct our operations and
are in substantial compliance with applicable regulatory requirements relating
to our operations. Our capital expenditures relating to environmental matters
were not material in 2007. We currently do not anticipate any material adverse
effect on our business, financial condition, results of operations or cash flows
as a result of our future compliance with existing environmental laws
controlling the discharge of materials into the environment.
INSURANCE:
6
We are only required to insure the trailers against liability and damage.
Additionally, the company maintains hazard insurance on the batch plant
property. No claims are outstanding as of December 31, 2007.
FUTURE PRODUCTS AND SERVICES:
The Company plans to increase the size of its trailer fleet as well as build
additional batch plants in strategic locations. No additional services outside
of the offering of ready mixed concrete are contemplated at this time.
ITEM 2. DESCRIPTION OF PROPERTY
The Company leases on a month to month basis a 1,250 square foot office
warehouse space and a half acre of land at 4232 E. Interstate 30, Rockwall,
Texas 75087.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 2007, the Company is not involved in any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to a vote to the security holders during
2007.
7
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
The common stock is not currently quoted on any electronic quotation medium.
The following table sets forth the quarterly high and low bid prices for the
common stock since the quarter ended March 31, 2006. The prices set forth below
represent inter-dealer quotations, without retail markup, markdown or commission
and may not be reflective of actual transactions.
HIGH LOW
---- ----
Quarter ended March 31, 2006 N/A N/A
Quarter ended June 30, 2006 N/A N/A
Quarter ended September 30, 2006 N/A N/A
Quarter ended December 31, 2006 N/A N/A
Quarter ended March 31, 2007 N/A N/A
Quarter ended June 30, 2007 N/A N/A
Quarter ended September 30, 2007 N/A N/A
Quarter ended December 31, 2007 N/A N/A
At December 31, 2007, we had approximately 49 record holders of our common
stock. This number excludes any estimate by us of the number of beneficial
owners of shares held in street name, the accuracy of which cannot be
guaranteed.
Dividends
We have not paid cash dividends on any class of common equity since formation
and we do not anticipate paying any dividends on our outstanding common stock in
the foreseeable future.
Warrants
The Company has no warrants outstanding.
ITEM 6. SELECTED FINANCIAL DATA
Not required for smaller reporting companies.
ITEM 7. MANAGEMENT DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION
SUMMARY OF 2007
In 2007, we filed a registration statement with the U.S. Securities & Exchange
Commission in order to raise funds to expand our business and execute our
business plan. The filing became effective in July 2007 which gave us the
opportunity to sell up to 1,000,000 shares of common stock at $0.50 per share.
As of December 31, 2007, we had raised $99,750 by selling 199,500 shares of
common stock under that registration statement.
Revenues for the twelve months ended December 31, 2007 were $107,678 compared to
$91,530 for the twelve months ended December 31, 2006.
8
Cost of sales for the twelve months ended December 31, 2007 were $55,467
compared to $43,280 for the twelve months ended December 31, 2006 making the
gross profit percentages 48.49% and 52.71% respectively.
Total operating expenses for the twelve months ended December 31, 2007 were
$74,561 compared to $79,812 for the twelve months ended December 31, 2006. Since
we started our business in 2006, we had many costs that were non-recurring
one-time costs in 2007 which we estimate at $10,000.
We had interest expense of $2,006 and $2,723 in 2007 and 2006, respectively.
Net loss for the twelve months ended December 31, 2007 was $24,005 compared to a
loss of $34,051 for the twelve months ended December 31, 2006.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company, together with the independent auditors'
report thereon of The Hall Group, CPAs appear on pages F-1 through F-14 of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANICAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Securities Exchange Act
of 1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. It should be noted that the design of
any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote. As of the end of the period covered by this Annual
Report, we carried out an evaluation, under the supervision and with the
participation of our President, also serving as our Chief Financial Officer, of
the effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our President has concluded that the
Company's disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.
Changes in Internal Controls over Financial Reporting
- -----------------------------------------------------
We have not yet made any changes in our internal controls over financial
reporting that occurred during the period covered by this report on Form 10-K
9
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Management's Annual Report on Internal Control Over Financial Reporting
- -----------------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act. Our internal control system was designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes, in accordance
with generally accepted accounting principles. Because of inherent limitations,
a system of internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate due to
change in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Our management conducted an evaluation of the effectiveness of our internal
control over financial reporting using the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control--Integrated Framework. Based on its evaluation, our management concluded
that there is a material weakness in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company's annual or
interim financial statements will not be prevented or detected on a timely
basis.
The material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by external accountants who may not always get full information and therefore
something is not recorded appropriately. Our President does not possess
accounting expertise and our company does not have an audit committee. This
weakness is due to the company's lack of working capital to hire additional
staff. To remedy this material weakness, we intend to engage another accountant
to assist with financial reporting as soon as our finances will allow.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to the attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management's report in this annual
report.
The Company's management carried out an assessment of the effectiveness of the
Company's internal control over financial reporting as of December 31, 2007. The
Company's management based its evaluation on criteria set forth in the framework
in Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that assessment, management
has concluded that the Company's internal control over financial reporting was
not effective as of December 31, 2007.
ITEM 9B. OTHER INFORMATION
In July 2007, the Company filed a Form SB-1 with the U.S. Securities and
Exchange Commission which became effective in July 2007 and were approved to
raise a minimum of $75,000 and a maximum of $500,000. In November, the Company
raised in excess of the minimum amount of $75,000. A Form 8-K was filed on
February 14, 2008 to report the raising of these minimum funds.
10
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
As of December 31, 2007, the following person serves as the sole director and
officer of the Company.
Edward Stevens 52 Chief Executive Officer, President, Chief
Financial Officer and Director
Since December 29, 2006
Background of the Director and Executive Officer:
Edward Stevens:
Mr. Stevens graduated from Indiana State University in 1989 with a BS in
Electronic Technology. He was a Design Engineer with Grand Transformer, Inc.,
Plano, Texas from 1989 through 2003 before becoming a Design Engineer with Nova
Magnetics, Inc., in Garland, Texas from 2003 to the present where he is still
employed on a part time basis. In addition, in 2003 Mr. Stevens started Kingdom
Concrete, Inc. which is the subsidiary of Kingdom Koncrete, Inc., being the
President of both. Mr. Stevens is at the Kingdom Concrete, Inc. plant six days a
week and spends approximately six hours on any given day on Kingdom Concrete,
Inc. affairs. He spends approximately two hours a day working on projects for
Nova Magnetics, Inc. out of the Kingdom Concrete offices.
ITEM 11. EXECUTIVE COMPENSATION
Our sole officer and director received the following compensation for the years
of 2007 and 2006. He has no employment contract with the company.
Name of Person Capacity in which he served Aggregate
Receiving compensation to receive remuneration remuneration
- ---------------------- -----------------------------------------------
Edward Stevens President, Secretary 2007 - $ -0-
and Treasurer 2006 - $ -0-
As of the date of this filing, our sole officer is our only employee. We have no
employment agreements with any officer, director or employee.
11
ITEM 12. SECUIRTY OWNERSHIP OF MANANGEMENT AND BENEFICIAL OWNERS
As of December 31, 2007, the following person is known to the Company to own 10%
or more of the Company's Voting Stock:
Title / relationship Number of As a
to Issuer Name of Owner shares owned Percent
- ------------------------------------------------------------------------------
President, Secretary
and Director Edward Stevens 4,650,000 89.43%
All officers, directors, and
10% shareholders as a group 4,650,000 89.43%
12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTION
As of the date of this filing, there are no other agreements or proposed
transactions, whether direct or indirect, with anyone, but more particularly
with any of the following:
o a director or officer of the issuer;
o any principal security holder;
o any promoter of the issuer;
o any relative or spouse, or relative of such spouse, of the above
referenced persons.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
(1) AUDIT FEES
The aggregate fees billed for professional services rendered by our auditors,
for the audit of the registrant's annual financial statements and review of the
financial statements included in the registrant's Form 10-K or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for fiscal year 2007 was $12,500 and in 2006 was $3,360.
(2) AUDIT-RELATED FEES
NONE
(3) TAX FEES
NONE
(4) ALL OTHER FEES
NONE
(5) AUDIT COMMITTEE POLICIES AND PROCEDURES
Audit Committee Financial Expert
The Securities and Exchange Commission has adopted rules implementing Section
407 of the Sarbanes-Oxley Act of 2002 requiring public companies to disclose
information about "audit committee financial experts." As of the date of this
Annual report, we do not have a standing Audit Committee. The functions of the
Audit Committee are currently assumed by our Board of Directors. Additionally,
we do not have a member of our Board of Directors that qualifies as an "audit
committee financial expert." For that reason, we do not have an audit committee
financial expert.
(6) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
Not applicable.
13
PART IV
ITEM 15. EXHIBITS, FINANICAL STATEMENTS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report: Included in Part
II, Item 7 of this report:
Report of Independent Registered Public Accounting FIrm
Consolidated Balance Sheet as of December 31, 2007
Consolidated Statements of Operations For the Years Ended December 31,
2007 and 2006
Consolidated Statements of Stockholders Equity For the Years Ended
December 31, 2007 and 2006
Consolidated Statements of Cash Flows For the Years Ended December 31,
2007 and 2006
Notes to the Consolidated Financial Statements
(b) The Company did not file any Form 8-K's during 2007.
(c) Exhibits
Exhibit Number Name of Exhibit
31.1 Certification of Chief Executive Officer, pursuant to Rule
13a-14(a) of the Exchange Act, as enacted by Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer, pursuant to Rule
13a-14(a) of the Exchange Act, as enacted by Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer, pursuant to 18 United States Code Section 1350, as
enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Annual Report on Form 10-K to be signed on its
behalf by the undersigned hereunto duly authorized.
KINGDOM KONCRETE, INC.
By: /s/ Edward Stevens
-------------------
Edward Stevens
Chief Executive Officer & Chief Financial Officer
Dated: March 31, 2008
15
KINGDOM KONCRETE, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2007
KINGDOM KONCRETE, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE (S)
BASIC FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm 1
Consolidated Balance Sheet as of December 31, 2007 2
Consolidated Statements of Operations For the Years Ended 3
December 31, 2007 and 2006
Consolidated Statements of Cash Flows For the Years Ended
December 31, 2007 and 2006 5
Consolidated Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 2007 and 2006 4
Notes to the Consolidated Financial Statements 6-15
i
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Management of
Kingdom Koncrete, Inc.
Rockwall, Texas
We have audited the accompanying consolidated balance sheet of Kingdom Koncrete,
Inc. as of December 31, 2007 and the related consolidated statements of
operations, cash flows and stockholders' equity for the years ended December 31,
2007 and 2006. 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 audit.
We conducted our audit of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion.
We were not engaged to examine management's assertion about the effectiveness of
Kingdom Koncrete, Inc.'s. internal control over financial reporting as of
December 31, 2007, and, accordingly, we do not express on opinion thereon.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Kingdom Koncrete,
Inc. as of December 31, 2007, and the results of its operations and its cash
flows for the years ended December 31, 2007 and 2006 in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has suffered significant losses and will
require additional capital to develop its business until the Company either (1)
achieves a level of revenues adequate to generate sufficient cash flows from
operations; or (2) obtains additional financing necessary to support its working
capital requirements. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 8. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ The Hall Group, CPAs
- -------------------------
The Hall Group, CPAs
Dallas, Texas
March 21, 2008
1
KINGDOM KONCRETE, INC.
Consolidated Balance Sheet
December 31, 2007
ASSETS
Current Assets
Cash and Cash Equivalents $ 82,099
Inventory 896
---------
Total Current Assets 82,995
Fixed Assets
Equipment 141,406
Leasehold Improvements 7,245
Office Equipment 675
Less: Accumulated Depreciation (103,692)
---------
Total Fixed Assets 45,634
---------
TOTAL ASSETS $ 128,629
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 8,322
Accrued Expenses 1,640
Advances from Shareholder 111,556
Current Portion of Long Term Note Payable 12,600
---------
Total Current Liabilities 134,118
Long Term Liabilities
Notes Payable 23,366
Less: Current Portion (12,600)
---------
Total Long Term Liabilities 10,766
---------
Total Liabilities 144,884
Stockholders' Equity
Common Shares, $.001 par value, 50,000,000 shares authorized,
5,199,500 shares issued and outstanding 5,199
Additional Paid-In Capital 119,105
Retained Earnings (Deficit) (140,559)
---------
Total Stockholders' Equity (Deficit) (16,255)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 128,629
=========
The accompanying notes are an integral part of these financial statements.
2
KINGDOM KONCRETE, INC.
Consolidated Statements of Operations
For the Years Ended December 31, 2007 and 2006
2007 2006
----------- -----------
REVENUES $ 107,678 $ 91,530
COST OF SALES 55,467 43,280
----------- -----------
GROSS PROFIT 52,211 48,250
OPERATING EXPENSES
Advertising 2,339 2,529
Bank Charges and Credit Card Fees 2,567 1,421
Contract Services 135 3,500
Depreciation 24,700 33,668
Insurance 3,541 3,953
Marketing 2,000 0
Office Expenses 1,768 1,447
Professional Fees 13,164 13,990
Rent 12,600 12,600
Repairs and Maintenance 3,954 1,819
Taxes 6,784 3,554
Telephone 1,009 1,331
----------- -----------
TOTAL OPERATING EXPENSES 74,561 79,812
----------- -----------
NET OPERATING (LOSS) (22,350) (31,562)
OTHER INCOME (EXPENSE)
Gain on Sale of Assets 0 234
Interest Income 351 0
Interest Expense (2,006) (2,723)
----------- -----------
TOTAL OTHER INCOME (EXPENSE) (1,655) (2,489)
----------- -----------
NET (LOSS) BEFORE INCOME TAXES (24,005) (34,051)
Provision for Income Taxes (Expense) Benefit 0 0
----------- -----------
NET (LOSS) $ (24,005) $ (34,051)
Beginning Retained Earnings (Deficit) (116,554) (82,503)
----------- -----------
ENDING RETAINED EARNINGS (DEFICIT) $ (140,559) $ (116,554)
=========== ===========
EARNINGS PER SHARE
Weighted Average of Outstanding Shares 5,028,405 5,000,000
=========== ===========
Income (Loss) per Share $ (0.00) $ (0.01)
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
KINGDOM KONCRETE, INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2007 and 2006
2007 2006
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(24,005) $(34,051)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 24,700 33,668
(Increase) in Inventory (896) 0
Increase (Decrease) in Accounts Payable (11,094) 18,227
Increase in Accrued Expenses 1,640 0
-------- --------
Net Cash Provided (Used) by Operating Activities (9,655) 17,844
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of Fixed Assets 0 10,758
-------- --------
Net Cash Provided by Investing Activities 0 10,758
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on Notes (12,188) (11,472)
Payments on Shareholder Advance (1,700) (15,500)
Proceeds from Sale of Common Stock 99,750 0
-------- --------
Net Cash Provided (Used) by Financing Activities 85,862 (26,972)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 76,208 1,630
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 5,891 4,261
-------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 82,099 $ 5,891
======== ========
SUPPLEMENTAL DISCLOSURES
Cash Paid During the Year for Interest Expense $ 2,006 $ 2,723
======== ========
The accompanying notes are an integral part of these financial statements.
4
KINGDOM KONCRETE, INC.
Consolidated Statement of Changes in Stockholders' Equity
For the Years Ended December 31, 2007 and 2006
Retained
Common Stock Paid-In Earnings
Shares Amount Capital (Deficit) Totals
------------ --------- --------- ---------- -----------
Stockholders' Equity (Deficit) at January 1, 2006 5,000,000 $ 5,000 $ 19,554 $ (82,503) $ (57,949)
Net (Loss) (34,051) (34,051)
------------ --------- --------- ---------- -----------
Stockholders' Equity (Deficit) at December 31, 2006 5,000,000 $ 5,000 $ 19,554 $ 116,554) $ (92,000)
============ ========= ========= ========== ===========
Issuance of Common Stock for Cash 199,500 199 99,551 99,750
Net (Loss) (24,005) (24,005)
------------ --------- --------- ---------- -----------
Stockholders' Equity (Deficit) at December 31, 2007 5,199,500 $ 5,199 $119,105 $(140,559) $ (16,255)
============ ========= ========= ========== ===========
The above schedule reflects the conversion from an LLC to a Corporation, which
was effective on March 28, 2006, as if it had been originally formed as a
corporation in August 2002.
The accompanying notes are an integral part of these financial statements.
5
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------------------------------
Nature of Activities, History and Organization:
-----------------------------------------------
Kingdom Koncrete, Inc. (The "Company") operates a `carry and go'
concrete business. The Company is located in Rockwall, Texas and was
incorporated on August 22, 2006 under the laws of the State of Nevada.
Kingdom Koncrete Inc. is the parent company of Kingdom Concrete, Inc.
("Kingdom Texas"), a company incorporated under the laws of the State
of Texas. Kingdom Texas was established in 2003 and for the past three
years has been operating a single facility in Texas.
On August 22, 2006, Kingdom Koncrete, Inc. ("Koncrete Nevada"), a
private holding company established under the laws of Nevada, was
formed in order to acquire 100% of the outstanding common stock of
Kingdom Texas. On June 30, 2006, Koncrete Nevada issued 5,000,000
shares of common stock in exchange for a 100% equity interest in
Kingdom Texas. As a result of the share exchange, Kingdom Texas became
the wholly owned subsidiary of Koncrete Nevada. As a result, the
shareholders of Kingdom Texas owned a majority of the voting stock of
Koncrete Nevada. The transaction was regarded as a reverse merger
whereby Kingdom Texas was considered to be the accounting acquirer as
its shareholders retained control of Koncrete Nevada after the
exchange, although Koncrete Nevada is the legal parent company. The
share exchange was treated as a recapitalization of Koncrete Nevada. As
such, Kingdom Texas (and its historical financial statements) is the
continuing entity for financial reporting purposes. The financial
statements have been prepared as if Koncrete Nevada had always been the
reporting company and, on the share exchange date, changed its name and
reorganized its capital stock.
Significant Accounting Policies:
--------------------------------
The Company's management selects accounting principles generally
accepted in the United States of America and adopts methods for their
application. The application of accounting principles requires the
estimating, matching and timing of revenue and expense. The accounting
policies used conform to generally accepted accounting principles which
have been consistently applied in the preparation of these financial
statements.
6
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - (CONTINUED)
- -------------------
The financial statements and notes are representations of the Company's
management which is responsible for their integrity and objectivity.
Management further acknowledges that it is solely responsible for
adopting sound accounting practices, establishing and maintaining a
system of internal accounting control and preventing and detecting
fraud. The Company's system of internal accounting control is designed
to assure, among other items, that 1) recorded transactions are valid;
2) valid transactions are recorded; and 3) transactions are recorded in
the proper period in a timely manner to produce financial statements
which present fairly the financial condition, results of operations and
cash flows of the Company for the respective periods being presented.
Basis of Presentation:
----------------------
The Company prepares its financial statements on the accrual
basis of accounting. All intercompany balance and transactions
are eliminated. Investments in subsidiaries are reported using
the equity method.
Reclassification:
-----------------
Certain prior year amounts have been reclassified in the
consolidated balance sheets, consolidated statements of
operations and consolidated statements of cash flows to
conform to current period presentation. These
reclassifications were not material to the consolidated
financial statements and had no effect on net earnings
reported for any period.
Use of Estimates:
-----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
Recently Issued Accounting Pronouncements:
------------------------------------------
The Company does not expect the adoption of recently issued
accounting pronouncements to have a significant impact on the
Company's results of operations, financial position or cash
flow. See Note 10 for a discussion of new accounting
pronouncements.
7
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - (CONTINUED)
- -------------------
Cash and Cash Equivalents:
--------------------------
Cash and cash equivalents includes cash in banks with original
maturities of three months or less are stated at cost which
approximates market value, which in the opinion of management,
are subject to an insignificant risk of loss in value.
Inventory:
----------
Inventory is comprised of gravel, the primary raw material
used to make concrete. The Company uses the weighted average
method for inventory tracking and valuation and calculates
inventory at each month end. Inventory is stated at the lower
of cost or market value.
Revenue Recognition:
--------------------
The Company's revenue consists of the following:
Rental and product sales: Revenue is recognized at the point
of sale. The price includes concrete and hourly rental of the
mixer. Customers pay in cash, or by check or credit card
before leaving the premises as Kingdom Concrete has completed
its service by filling and making the mixer ready for use.
Late fees: Late fees are charged when a mixing trailer is
returned late. At this time the fee, as agreed in the sales
order, is assessed against the credit card or the customer
pays in cash.
Cleaning fees: Cleaning fees are charged when a mixing trailer
is returned and it was not cleaned. At this time cleaning
fees, as agreed in the sales order, are assessed against the
credit card or the customer pays in cash.
Revenue is recorded net of any sales taxes charged to
customers.
8
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - (CONTINUED)
- -------------------
The Company recognizes revenue from the sale of products in
accordance with the Securities and Exchange Commission Staff
Accounting Bulletin No. 104 ("SAB 104"), "Revenue Recognition
in Financial Statements." Revenue will be recognized only when
all of the following criteria have been met:
o Persuasive evidence of an arrangement exists;
o Ownership and all risks of loss have been transferred
to buyer, which is generally upon shipment;
o The price is fixed and determinable; and
o Collectibility is reasonably assured.
Cost of Goods Sold:
-------------------
Cost of Goods Sold consists primarily of gravel, which is used
to make concrete. Due to large space requirements, the Company
orders gravel approximately every four to six weeks and
expenses all purchases when made. At each month end, the
Company approximates the amount of gravel remaining and
capitalizes it as inventory based upon the weighted average
method.
Income Taxes:
-------------
The Company has adopted SFAS No. 109, which requires the use
of the liability method in the computation of income tax
expense and the current and deferred income taxes payable.
Advertising:
------------
Advertising costs are expensed as incurred. These expenses
were $2,339 and $2,529 for the years ended December 31, 2007
and 2006, respectively.
Property and Equipment:
-----------------------
Property and equipment are stated at cost less accumulated
depreciation. Major renewals and improvements are capitalized;
minor replacements, maintenance and repairs are charged to
current operations. Depreciation is computed by applying the
straight-line method over the estimated useful lives which are
generally five to seven years.
9
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1 - (CONTINUED)
- -------------------
Earnings per Share:
-------------------
Earnings per share (basic) is calculated by dividing the net
income (loss) by the weighted average number of common shares
outstanding for the period covered. As the Company has no
potentially dilutive securities, fully diluted earnings per
share is identical to earnings per share (basic).
NOTE 2 - FIXED ASSETS
Fixed assets at December 31, 2007 are comprised of the following:
Equipment $ 141,406
Leasehold Improvements 7,245
Office Equipment 675
Less: Accumulated Depreciation (103,692)
-----------
Total Fixed Assets $ 45,634
===========
Depreciation expense was $24,700 and $33,668 for the years ended
December 31, 2007 and 2006, respectively.
NOTE 3 - ADVANCE FROM SHAREHOLDER
The Company is obligated to a shareholder for funds advanced to the
Company for start up expenses and working capital. The advances are
unsecured and are to be paid back as the Company has available funds to
do so. No interest rate or payback schedule has been established. There
has been no interest paid on these advances. As there is no defined
payback period, no interest has been imputed.
10
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 4 - NOTES PAYABLE
- ----------------------
The Company acquired machinery and equipment through an SBA loan on
September 12, 2003 in the amount of $70,000 with an interest rate of
6.59%. The monthly payment is $1,183 including principal and interest
for 72 months, due August 12, 2009. The remaining balance at December
31, 2007 is $23,366, of which $12,600 is considered current.
Interest expense was $2,006 and $2,723 for the years ended December 31,
2007 and 2006, respectively.
NOTE 5 - COMMON STOCK
- ---------------------
The Company is authorized to issue 50,000,000 common shares at a par
value of $0.001 per share. These shares have full voting rights.
The Company issued 199,500 shares during 2007 at a price of $.50 per
share. At December 31, 2007 there were 5,199,500 shares outstanding.
11
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 6 - INCOME TAXES
- ---------------------
The Company follows FASB Statement Number 109, Accounting for Income
Taxes. Deferred income taxes reflect the net tax effects of (a)
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax reporting purposes, and (b) net operating loss carry
forwards. For Federal income tax purposes, the Company uses the cash
basis of accounting, whereas the accrual basis is used for financial
reporting purposes. In addition, certain assets are charged to expense
when acquired under Section 179 of the Internal Revenue Code for income
tax purposes. The cumulative tax effect at the expected tax rate of 25%
of significant items comprising the Company's net deferred tax amounts
as of December 31, 2007 and 2006 are as follows:
12/31/07 12/31/06
----------- ----------
Deferred tax assets attributable to:
Prior years $ 39,628 $ 31,115
Tax benefit (liability) for current year (8,353) 8,513
---------- ----------
Total Deferred Tax Benefit $ 31,275 $ 39,628
Valuation Allowance $(31,275) $ (39,628)
--------- ----------
Net Deferred Tax Benefit $ 0 $ 0
========= ==========
Components of the current provision (benefit) for taxes on income for
the current year are as follows:
12/31/07 12/31/06
Income tax before extraordinary item:
Tax (benefit) liability on
current year operations $ 8,353 $ (19,002)
Valuation Reserve $ (8,353) $ 19,002
-------- ----------
Net provision (benefit) $ 0 $ 0
========= ==========
The realization of deferred tax benefits is contingent upon future earnings and
is fully reserved at December 31, 2007.
12
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 7 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
The Company leases an office and operational facilities on a month to
month basis. Rent expense was $12,600 and $12,600 for the years ended
December 31, 2007 and 2006.
NOTE 8 - FINANCIAL CONDITION AND GOING CONCERN
- ----------------------------------------------
Kingdom Koncrete, Inc. has an accumulated deficit through December 31,
2007 totaling $140,559 and had negative working capital of $51,123.
Because of this accumulated loss, Kingdom Koncrete, Inc. will require
additional working capital to develop its business operations. Kingdom
Koncrete, Inc. intends to raise additional working capital either
through private placements, public offerings, bank financing and/or
shareholder funding. There are no assurances that Kingdom Koncrete,
Inc. will be able to either (1) achieve a level of revenues adequate to
generate sufficient cash flow from operations; or (2) obtain additional
financing through either private placement, public offerings, bank
financing and/or shareholder funding necessary to support Kingdom
Koncrete, Inc.'s working capital requirements. To the extent that funds
generated from any private placements, public offerings, bank financing
and/or shareholder funding are insufficient, Kingdom Koncrete, Inc.
will have to raise additional working capital. No assurance can be
given that additional financing will be available, or if available,
will be on terms acceptable to Kingdom Koncrete, Inc. If adequate
working capital is not available Kingdom Koncrete, Inc. may not be able
to continue its operations.
Management believes that the efforts it has made to promote its site
will continue for the foreseeable future. These conditions raise
substantial doubt about Kingdom Koncrete, Inc.'s ability to continue as
a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that
might be necessary should Kingdom Koncrete, Inc. be unable to continue
as a going concern.
13
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS
- -----------------------------------------
In June 2003, the Securities and Exchange Commission ("SEC") adopted
final rules under Section 404 of the Sarbanes-Oxley Act of 2002
("Section 404"), as amended by SEC Release No. 33-8760 on December 15,
2006. Commencing with the Company's Annual Report for the year ending
December 31, 2008, the Company is required to include a report of
management on the Company's internal control over financial reporting.
The internal control report must include a statement of management's
responsibility for establishing and maintaining adequate internal
control over financial reporting for the Company; of management's
assessment of the effectiveness of the Company's internal control over
financial reporting as of year-end and of the framework used by
management to evaluate the effectiveness of the Company's internal
control over financial reporting. Furthermore in the following year the
Company's independent accounting firm has to issue an attestation
report separately on the Company's internal control over financial
reporting on whether it believes that the Company has maintained, in
all material respects, effective internal control over financial
reporting.
In July 2006, the FASB issued FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes (FIN 48). FIN 48 clarifies the
accounting for income taxes by prescribing a minimum probability
threshold that a tax position must meet before a financial statement
benefit is recognized. The minimum threshold is defined in FIN 48 as a
tax position that is more likely than not to be sustained upon
examination by the applicable taxing authority, including resolution of
any related appeals or litigation processes, based on the technical
merits of the position. The tax benefit to be recognized is measured as
the largest amount of benefit that is greater than fifty percent likely
of being realized upon ultimate settlement. FIN 48 must be applied to
all existing tax positions upon initial adoption. The cumulative effect
of applying FIN 48 at adoption, if any, is to be reported as an
adjustment to opening retained earnings for the year of adoption. FIN
48 is effective for the Company's year-end 2007, but is not expected to
have a material impact on our consolidated financial statements, with
the possible exception of certain disclosures relative to our net
operating loss carryovers and the related valuation allowance.
In 2006, the Financial Accounting Standards Board issued the following:
- SFAS No. 155: Accounting for Certain Hybrid Financial
Instruments
- SFAS No. 156: Accounting for Servicing of Financial Assets
- SFAS No. 157: Fair Value Measurements
- SFAS No. 158: Employers' Accounting for Defined Benefit Pension
and Other Postretirement Plans
14
KINGDOM KONCRETE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 9 - (CONTINUED)
- -------------------
In 2007, the Financial Accounting Standards Board issued the following:
- SFAS No. 159: The Fair Value Option for Financial Assets and
Financial Liabilities; Including an amendment of FASB Statement
No. 115
- SFAS No. 141: (Revised 2007), Business Combinations
- SFAS No. 160: Noncontrolling Interest in Consolidated Financial
Statements
Management has reviewed these new standards and believes that they have
no impact on the financial statements of the Company.
15