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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2005.
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transaction Period from _______ to _______
Commission File Number: 000-50823
International Freight Logistics, Ltd.
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(Exact name of Registrant as specified in its Charter)
Delaware 22-3302847
------------------------------- ---------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
4 William Street, Lynbrook, New York 11563
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(516) 593-1010
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(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,673,500 shares of Common Stock,
$.0001 par value, outstanding on March 31, 2005.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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INTERNATIONAL FREIGHT LOGISTICS, LTD.
Form 10-QSB Quarterly Report
For Quarterly Period Ended March 31, 2005
Table of Contents
Page
----
PART I FINANCIAL INFORMATION 2
Item 1. Financial Statements 2
Unaudited Balance Sheet at March 31, 2005 and
Audited Balance Sheet at December 31, 2004 2
Unaudited Statements of Operations
For Three Months Ended
March 31, 2005 and March 31, 2004 3
Unaudited Statements of Cash Flows
For Three Months Ended
March 31, 2005 and March 31, 2004 4
Unaudited Statements of Shareholders' Equity
For Three Months Ended
March 31, 2005 and March 31, 2004 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Operations 10
Item 3. Controls and Procedures 15
PART II OTHER INFORMATION 16
SIGNATURE 17
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
International Freight Logistics, Ltd.
Balance Sheet
As of March 31, 2005 and December 31, 2004
ASSETS Unaudited Audited
3/31/2005 12/31/2004
----------- ------------
Cash and equivalents $ 20,895 $ 18,031
Accounts receivable-net 412,265 302,927
----------- ------------
Total current assets 433,160 320,958
Property and equipment- net 9,996 13,596
Deposits 1,900 1,900
Shareholder advance 226,746 222,028
----------- ------------
Total Assets $ 671,802 $ 558,482
=========== ============
LIABILITIES & SHAREHOLDERS' EQUITY
Accounts payable $ 437,773 $ 327,316
Bank loans payable (short term) 52,309 51,296
----------- ------------
Total current liabilities 490,082 378,612
Bank loans payable (long term) 42,860 56,352
----------- ------------
Total liabilities 532,942 434,964
Shareholders' Equity:
Common stock: Par value of $0.0001 per share,
20,000,000 shares authorized,
issued and outstanding, 4,673,500 shares $ 467 $ 467
Additional paid in capital 268,458 268,458
Retained earnings (130,065) (145,407)
----------- ------------
Total shareholders' equity 138,860 123,518
----------- ------------
Total liabilities & shareholders' equity $ 671,802 $ 558,482
=========== ============
See the notes to the financial statements.
2
International Freight Logistics, Ltd.
Unaudited Statement of Operations
For the Quarters Ended March 31st
3/31/2005 3/31/2004
---------- ----------
Net export and import revenues $ 130,903 $ 131,396
Warehouse rental revenues 81,290 65,854
---------- ----------
Net Revenues 212,193 197,250
Cost of warehouse rental revenues 57,281 14,742
General and administrative expenses
Salaries expense 40,594 29,115
Administrative costs 99,351 128,137
Depreciation expense 1,800 2,151
---------- ----------
Total general and administrative expenses 141,745 159,403
---------- ----------
Net income (loss) from operations 13,167 23,105
Other income (expense):
Interest income 4,718 4,314
Interest expense (2,543) (1,413)
---------- ----------
Net income (loss) before tax provision 15,342 26,006
Income tax provision 0 (11,579)
---------- ----------
Net income (loss) $ 15,342 $ 14,427
========== ==========
Net income (loss) per common share:
Basic and fully diluted $ 0.00 $ 0.00
Weighted average of common shares:
Basic and fully diluted 4,673,500 4,673,500
See the notes to the financial statements.
3
International Freight Logistics, Ltd.
Unaudited Statement of Cash Flows
For the Quarters Ended March 31st
3/31/2005 3/31/2004
---------- ----------
Operating Activities:
Net income (loss) $ 15,342 $ 14,427
Adjustments to reconcile net loss to
net cash used by operations:
Depreciation expense 3,600 4,301
Bad debt expense 10,000 25,000
Salary expense 0 0
Interest income (4,718) (4,314)
Changes in other operating assets and liabilities:
Accounts receivable (119,338) (29,125)
Prepaid expenses 0 0
Advances to employees 0 800
Accounts payable and accrued expenses 110,457 (9,091)
---------- ----------
Net cash provided (used) by operations 15,343 1,998
Investing Activities:
Deposits 0 0
Purchase of property and equipment 0 0
---------- ----------
Net cash used by investing activities 0 0
Financing Activities:
Payment of bank loans (12,479) (2,296)
Payment of capital leases 0 0
Shareholder payments 0 (1,786)
---------- ----------
Net cash provided (used) by financing activities (12,479) (4,082)
---------- ----------
Net increase (decrease) in cash during the fiscal year 2,864 (2,084)
Cash balance at beginning of the fiscal year 18,031 9,019
Cash balance at March 31st $ 20,895 $ 6,935
========== ==========
Supplemental disclosures of cash flow information:
Interest paid during the year $ 2,543 $ 1,413
Income taxes paid during the year $ 0 $ 0
See the notes to the financial statements.
4
International Freight Logistics, Ltd.
Unaudited Statement of Shareholders' Equity
For the Quarters Ended March 31st
Common Common Paid in Retained
Shares Amount Capital Deficit Total
--------- ------ -------- ---------- ---------
Balance at
January 1, 2005 4,673,500 $ 467 $268,458 $(145,407) $ 123,518
Net income
for the period 15,342 15,342
--------- ------ -------- ---------- ---------
Balance at
March 31, 2005 4,673,500 $ 467 $268,458 $(130,065) $ 138,860
========= ====== ======== ========== =========
Common Common Paid in Retained
Shares Amount Capital Deficit Total
--------- ------ -------- ---------- ---------
Balance at
December 31, 2003 4,673,500 $ 467 $268,458 $ (87,514) $ 181,411
Net income
for the period 14,427 14,427
--------- ------ -------- ---------- ---------
Balance at
March 31, 2004 4,673,500 $ 467 $268,458 $ (73,087) $ 195,838
========= ====== ======== ========== =========
See the notes to the financial statements.
5
International Freight Logistics, Ltd.
Notes to the Financial Statements
For the Quarters Ended March 31st
1. Organization and Summary of Significant Accounting Policies
International Freight Logistics Ltd. (the Company) is a privately held company
organized under the laws of the state of Delaware in June 1993. The Company is a
full-service international freight forwarding and warehousing company serving
destinations in Europe, Central and South America, and the United States. The
Company rents an 19,800 square foot warehouse and office space in Lynbrook, New
York.
Use of Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principals requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure, if any, of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results may differ from these
estimates.
Cash & Short Term Deposits: Cash and short term deposits include deposits at
banks and short term securities with original maturity dates of less than three
months.
Revenue Recognition: The Company employs EITF 99-12 which provides guidance for
the recognition of revenues for non asset based carriers. Accordingly, the
Company recognizes revenues from import and export activities when the service
has been provided net of the costs associated with providing for the service.
Warehouse rental revenues are recognized when the rental service has been
provided to the lessee. Deposits received in lieu of future rentals are
recorded in the balance sheet as deferred rental revenues and are allocated to
warehouse rental revenues over the period covered by the deposit.
Bad Debt and Allowance for Doubtful Accounts: The allowance for doubtful
accounts is maintained at a level sufficient to provide for estimated credit
losses based on evaluating known and inherent risks in the receivables
portfolio. The Company provides, through charges to income, an allowance for
doubtful accounts which, based upon management's evaluation of numerous factors,
including economic conditions, a predictive analysis of the outcome of the
current portfolio and prior credit loss experience, is deemed adequate to cover
reasonably expected losses inherent in outstanding receivables.
Income Taxes: The Company accounts for income taxes in accordance with the
Statement of Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes". SFAS No. 109 requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets and
liabilities are computed annually for differences between financial statement
and income tax bases of assets and liabilities that will result in taxable
income or deductible expenses in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets and liabilities to the amount expected to be realized.
6
Income tax expense is the tax payable or refundable for the period adjusted for
the change during the period in deferred tax assets and liabilities.
Property and Equipment: Property and equipment are stated at cost. Depreciation
of property and equipment is provided using the straight-line method over the
estimated useful life of the asset. Improvements made to leased property are
depreciated on a straight-line basis over the estimated useful life of the
improvement or the period of the lease remaining, whichever is less. The
following is a summary of the estimated useful lives used in computing
depreciation expense:
Equipment 5 years
Leasehold improvements 7 years
Vehicles 5 years
Furniture & fixtures 7 years
Expenditures for major repairs and renewals that extend the useful life of the
asset are capitalized. Minor repair expenditures are charged to expense as
incurred.
Long Lived Assets: The Company reviews for the impairment of long-lived assets
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. An impairment loss would be recognized when
estimated future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount.
2. Bank Loans
The Company acquired loans from banks of $100,000 in 2002 and $90,000 in 2001.
The loans mature in five (5) years from origination date and are secured by the
personal guarantees of the officers of the Company, as well as a lien on the
company's receivables and other assets. The interest rates on the loans range
from 5.00% to 7.95%. The payment schedule of the loans at March 31, 2004 is as
follows:
2005 $ 56,653
2006 40,403
2007 3,774
----------
Total minimum loan payments $ 100,829
Less amounts representing interest (5,661)
----------
Present value of net minimum loan payments $ 95,169
==========
7
3. Earnings per Share
The Company applies SFAS No. 128, Earnings per Share in determining earnings per
share. In accordance with SFAS No. 128, basic net income per share has been
computed based upon the weighted average of common shares outstanding during the
year. All net income and net losses reported in the financial statements are
available to the common stockholders. The Company has no other financial
instruments outstanding that are convertible into common shares.
4. Property and Equipment
The property and equipment of the Company is as follows:
3/31/2005 3/31/2004
---------- ----------
Equipment $ 69,718 $ 69,718
Vehicles 22,717 22,717
Furniture 15,511 15,511
---------- ----------
Total property & equipment 107,946 107,946
Less accumulated depreciation (97,950) (94,350)
---------- ----------
Net property and equipment $ 9,996 $ 13,596
========== ==========
8
5. Provision for Income Taxes
Provision for income taxes is comprised of the following:
3/31/2005 3/31/2004
---------- ----------
Net income before provision for income taxes $ 15,342 $ 26,006
========== ==========
Current tax expense:
Federal $ 0 $ 8,978
State 0 2,601
---------- ----------
Total 0 11,579
Less deferred tax benefit:
Timing difference 11,578 0
Allowance for recoverability (11,578) 0
---------- ----------
Provision for income taxes $ 0 $ 11,579
========== ==========
A reconciliation of provision for income taxes at the statutory rate to
provision for income taxes at the Company's effective tax rate is as follows:
Statutory U.S. federal rate 15% 15%
Statutory state and local income tax 10% 10%
---------- ----------
Effective rate 25% 25%
========== ==========
Deferred income taxes are comprised of the following:
Timing differences (11,578) 0
Allowance for recoverability 11,578 0
---------- ----------
Deferred tax benefit $ 0 $ 0
========== ==========
The deferred tax benefit arising from the loss carry forward expires in fiscal
years 2023 and 2024 and may not be recoverable through acquisition of the
Company under current IRS statutes.
6. Related Party Transactions
During the fiscal years 2004 and 2003, the Company gave unsecured advances to
the chairman and majority shareholder. The Company imputed interest on the
advances at 8.50% and recorded interest of $4,718 and $4,314 in the statement of
operations for March 31, 2005 and March 31, 2004, respectively.
The chairman of the board and the president of the Company have provided
personal guarantees to the bank loans discussed in Note 2 at no cost to the
Company.
9
Item 2. Management's Discussion and Analysis of Operations
The following discussion and analysis should be read in conjunction with the
unaudited financial statements and notes thereto included in Part I - Item I of
this report, and Management's Discussion and Analysis of Financial Condition and
Results of Operations and Risk Factors affecting us in our annual report for the
year ended December 31, 2004 as filed with the Securities and Exchange
Commission on March 30, 2005.
Forward-Looking Statements
Some of the information contained in this report may constitute forward-looking
statements or statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Any such forward-looking statements are based on current
expectations and projections about future events. The words, estimate, plan,
intend, expect, anticipate and similar expressions are intended to identify
forward-looking statements which involve, and are subject to, known and unknown
risks, uncertainties and other factors which could cause our actual results,
financial or operating performance, or achievements to differ materially from
future results, financial or operating performance, or achievements expressed or
implied by such forward-looking statements. Projections and assumptions
contained and expressed herein were reasonably based on information available to
us at the time so furnished and as of the date of this filing. All such
projections and assumptions are subject to significant uncertainties and
contingencies, many of which are beyond our control, and no assurance can be
given that the projections will be realized. Readers are cautioned not to place
undue reliance on any such forward-looking statements, which speak only as of
the date hereof. Careful consideration should be given to the General Risk
Factors contained in our Form 10-KSB for the year ended December 31, 2004. We
undertake no obligation to publicly release any revisions to these forward-
looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
Results of Operations
Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004
For the three months ended March 31, 2005, our total net revenue was $212,193
compared to $197,250 for three months ended March 31, 2004, an increase of
$14,943. Our net export and import revenue for the quarter ended March 31, 2005
was $130,903, a small decrease of $493 from the prior year. Our warehouse rental
revenue for quarter ended March 31, 2004 was $81,290, an increase of $15,436
over the prior year quarter due to increased warehouse needs of our customers.
Our general and administrative expenses decreased from $159,403 for the prior
year quarter to $141,745 for the quarter ended March 31, 2005, a decrease of
$17,658. This decrease resulted from decreased administrative costs in the
amount of $28,786, decreased depreciation expense of $351, while salary expenses
increased $11,479. The decrease in administrative costs of $28,786 resulted
from decreased administration expenses in the amount of $9,896, decreased rent
in the amount of $8,102, decreased bad debt expense of $15,000, decreased travel
10
expenses of $3,210, increased advertising expense of $10,428, decreased
consulting of $3,752, increased taxes of $7,594, and decreases in other
operating expenses in the amount of $6,848.
Our net income for the quarter ended March 31, 2005 was $15,342 compared to net
income for the prior year quarter totaling $14,427, an increase of $915.
Liquidity and Capital Resources
At March 31, 2005, our cash on hand was $20,895 compared to $18,031 at December
31, 2004, an increase of $2,864. At March 31, 2005, we had a working capital
deficit of $56,922 compared to a deficit of $57,654 at December 31, 2004, an
decreased deficit of $732.
Total assets at March 31, 2005 were $671,802 compared to $558,482 at December
31, 2004, an increase of $113,320, resulting from the increase in cash of
$2,864, increase in accounts receivable of $109,338, an increase in shareholder
advances of $4,718, and a decrease in property and equipment of $3,600.
Total liabilities at March 31, 2005 were $532,942 compared to $434,964 at
December 31, 2004, an increase of $97,978, resulting from a decrease in long
term bank loans of $13,492, an increase in accounts payable of $110,457, and an
increase in short term bank loans of $1,013.
Our shareholders' equity at March 31, 2005 was $138,860 compared to $123,518 at
December 31, 2004, an increase of $15,342, resulting from a decrease in our
deficit of the same amount.
We do not have any arrangements with our officers or stockholders to provide
advances, loans, or other equity commitments to fund our operations. The
Company acquired loans from banks of $100,000 in 2002 and $90,000 in 2001. The
loans mature in five years from their origination date and are secured by the
personal guarantees of the officers of the Company, as well as a lien on the
company's receivables and other assets. The interest rates on the loans range
from 5.00% to 7.95%, and the total balance outstanding on these loans was
$95,169 as of March 31, 2005.
Our planned marketing strategy and expansion plans will be funded from operating
revenues to the extent that such funds are available for this purpose. If
operating revenues are inadequate, then such expansion plans will be deferred
until operating revenues increase or until the management identifies an
alternative funding source. As of the date herein no such alternative funding
source has been identified.
During the next 12 months, the only anticipated capital expenditures are in
connection with our business and marketing plans.
Inflation
We are unable to accurately predict what effect, if any, inflation will have on
business operations in the future.
11
Risk Factors Affecting the Company
1. We have a history of limited operating results and earnings and our future
operating results are unpredictable, which makes it difficult to evaluate the
condition of our business and prospects.
We are a small organization, and have had limited revenues and earnings. For a
number of years we have concentrated our efforts in the development of a new
business plan that emphasizes our fine art & antique operations and the search
for funding in order to develop and expand that niche in our marketplace.
Therefore, we must be considered to be a limited operation subject to the
inability to implement our business plan and marketing strategy due to the lack
of adequate capital, failure to achieve increased market acceptance, and
unanticipated problems in the future.
2. We are totally dependent upon the personal efforts of our current management
and the loss of any of our officers or directors could have a material adverse
effect upon our business and future prospects.
All the decisions with respect to management of our affairs are made exclusively
by our current management, and the loss of any of our officers or directors
could have a material adverse effect upon our business and future prospects. We
do not presently have key man life insurance upon the life of any of our
officers or directors. We may also employ independent consultants to provide
business and marketing advice. Such consultants have no fiduciary duty and may
not perform as expected. Our success will, in significant part, depend upon the
efforts and abilities of management, including such consultants as may be
engaged in the future. Additionally, as we implement our planned marketing
strategy and related operations we will require the services of additional
skilled personnel. There can be no assurance that we can attract persons with
the requisite skills and training to meet our future needs or, even if such
persons are available, that they can be hired on terms favorable to us.
3. We may not be able to effectively manage growth resulting in the delayed
development of our business and lack of profitability.
If we successfully implement our business strategy, the resulting growth will
place significant demands on our management and internal controls. Management
may not be able to effectively direct us through a period of significant growth.
In particular, the pursuit of our business strategy will place a significant
strain on our managerial, operational and financial resources. We will need to
improve our financial and management controls, reporting systems and procedures.
We will also need to expand, train and manage our work force. We will need to
continually expand and upgrade our systems and ensure continued high levels of
service and reliability. There can be no assurance that there will not be
substantial unanticipated costs and expenses associated with our growth. If we
do not effectively manage such growth, our business, results of operations and
financial condition may be adversely affected.
4. Our shareholders will experience significant dilution if we issue additional
equity to fund operations.
If working capital requires financing through the issuance of equity securities,
our shareholders will experience significant dilution. In addition, securities
issued in connection with future financing activities may have rights and
12
preferences senior to the rights and preferences of our currently outstanding
shares of common stock. The conversion of future debt obligations into equity
securities could also have a dilutive effect on our shareholders.
5. We will require additional capital to fund our business strategy and
operations and if we are unable to raise additional capital, we may be unable to
achieve our expansion goals.
Our business strategy will require that substantial capital investment and
adequate financing be available to us for the development of operations and
additional equipment and facilities. Should we be unable to obtain the amount
of capital for anticipated needs, we may be required to obtain financing through
borrowings or the issuance of additional equity or debt securities, which could
have an adverse effect on the value of the existing common stock. We will
require additional financing in order to complete implementation of our proposed
business plan and expand our operations. Further, assuming that we are able to
successfully expand our operations, it is likely that we will require subsequent
additional financing in the future. There can be no assurance that such
financing will be available at all or, if available, that it can be obtained on
terms favorable to us.
6. Our business and marketing plan may not achieve market acceptance and could
result in our failure to sustain future operations.
Currently we plan to prepare and implement a marketing plan in connection with
our niche market. No formal market studies have been undertaken by us as of the
date of this Report. We may conduct a marketing survey in the future depending
upon the availability of funds. There can be no assurance that our planned
services will achieve market acceptance (or sufficient market acceptance to make
our operations commercially viable) among our target market. The failure of our
services to achieve market acceptance (or sufficient market acceptance to
operate profitably), would have a material adverse effect on our business and
financial condition and could result in our failure to achieve, or sustain,
viable commercial operations of any kind in the future.
7. Management's inability to control costs and expenses may result in operating
losses.
With respect to our planned business operations, management cannot accurately
project or give any assurance, with respect to our ability to control
development and operating costs and/or expenses in the future. Consequently,
even if we are successful in implementing our planned growth (of which there can
be no assurance), if management is not able to adequately control costs and
expenses, such operations may not generate any profit or may result in operating
losses.
8. We do not intend to pay cash dividends on our common stock in the future.
We have never paid cash dividends on our common stock and do not anticipate that
any cash dividends will be declared or paid on our common stock in the
foreseeable future. We presently intend to retain future earnings to finance
the expansion and growth of our business. Payment of future dividends on our
common stock, if any, will be at the discretion of our board of directors after
13
taking into account various factors, including our financial condition,
operating results, current and anticipated cash needs and plans for expansion.
9. Our market is highly competitive and we may not be able to compete
effectively with current or potential competitors and our failure to do so could
adversely affect our business, operating results and financial condition.
The market for our services is highly competitive, and is characterized by an
increasing number of new market entrants. We expect that new competitors that
provide similar services and are operationally proficient will emerge and will
be competing with us. Many of our current competitors have significantly
greater financial, marketing and other resources than we do. As a result, these
competitors may be able to devote greater resources toward the promotion, sale
and support of their services than we can. Our future growth is dependent to a
significant extent upon our ability to attract new clients. Demand and market
acceptance for such services are subject to a high level of uncertainty, and
there can be no assurance that the commercial acceptance will continue to grow.
We intend to compete on the basis of price and the quality of our services.
Consequently, we will be competing with many other companies for a share of the
available market and no assurance can be given that in the future we will be
able to achieve an adequate position to achieve commercial success or that such
competition will not materially adversely affect our business, results of
operations and financial condition.
10. There is no public market for our securities and our shares are illiquid.
There currently is no public market for our securities, nor can there be any
assurance that a public market will develop in the future. In significant part,
any market that may develop will be based upon our operating history, revenues,
and profitability, or lack thereof. Consequently, persons who own our
securities may be unable to liquidate their securities in the future should they
have a need to do so.
11. Sale of shares eligible for future sale could have a depressive effect on
the market price of our common stock.
A total of 4,673,500 shares of common stock are presently issued and
outstanding, which are "restricted securities" as that term is defined under the
Securities Act. Therefore, all such restricted shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
registration becomes available. One exemption, which may be available in the
future is Rule 144 adopted under the Securities Act. Generally, under Rule 144
any person holding restricted securities for at least one year may publicly sell
in ordinary brokerage transactions, within a 3 month period, the greater of one
(1%) percent of the total number of our shares outstanding or the average weekly
reported volume during the four weeks preceding the sale, if certain conditions
of Rule 144 are satisfied by us and the seller. Furthermore, with respect to
sellers who are our "non affiliates", as that term is defined in Rule 144, the
volume sale limitation does not apply and an unlimited number of shares may be
sold, provided the seller meets certain other conditions enumerated in Rule 144
including a holding period of 2 years. Sales under Rule 144 may have a
depressive effect on the market price of our securities, should a public market
develop or continue for our shares.
14
12. Information included in this document may contain forward-looking
statements that involve risk and uncertainties.
This document contains forward-looking statements. Readers are cautioned that
all forward-looking statements involve risk and uncertainty. Although we
believe that the assumptions underlying the forward-looking statements contained
herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this document will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by us or any other person that our objectives and plans will be
achieved.
13. There are risks of low priced stock and possible effect of "penny stock"
rules on liquidity.
It is likely that if our stock is eligible to be traded in the future it will be
defined as a "penny stock" under Rule 3a51-1 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934. In general, a
"penny stock" includes securities of companies which are not listed on the
principal stock exchanges or the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or National Market System ("NASDAQ NMS")
and have a bid price in the market of less than $5.00; and companies with net
tangible assets of less than $2,000,000 ($5,000,000 if the issuer has been in
continuous operation for less than three years), or which has recorded revenues
of less than $6,000,000 in the last three years. "Penny stocks" are subject to
rule 15g-9, which imposes additional sales practice requirements on broker-
dealers that sell such securities to persons other than established customers
and "accredited investors" (generally, individuals with net worth in excess of
$1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their
spouses, or individuals who are officers or directors of the issuer of the
securities). For transactions covered by Rule 15g-9, a broker-dealer must make a
special suitability determination for the purchaser and have received the
purchaser's written consent to the transaction prior to sale. Consequently, this
rule may adversely affect the ability of broker-dealers to sell our stock, and
therefore may adversely affect the ability of our stockholders to sell stock in
the public market.
Item 3. Controls and Procedures
Based on his evaluation, as of a date within 90 days of the filing of this Form
10-QSB, the Company's Chief Executive Officer and Chief Financial Officer has
concluded the Company's disclosure controls and procedures (as defined in Rules
13a-14 and 15d-14 under the Securities Exchange Act of 1934) are effective.
There have been no significant changes in internal controls or in other factors
that could significantly affect these controls subsequent to the date of his
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable
Item 2. Change in Securities. Not Applicable
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders. Not Applicable
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
------- -----------
31 Certification Pursuant to Rule 13a-14 and 15d-14 Under
the Securities Exchange Act of 1934, As Amended
32 Certification Pursuant To 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act
of 2002
(b) Reports on Form 8-K
None.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
International Freight Logistics, Ltd.
Dated: May 13, 2005 By: /s/ Piero Prato
--------------------------------------
Piero Prato, CEO and CFO
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Dated: May 13, 2005 By: /s/ Laura Mischke
--------------------------------------
Laura Mischke
Dated: May 13, 2005 By: /s/ Otto Gassner
--------------------------------------
Otto Gassner
17