UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 2003, or
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[ ]Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from _____________ to _________________
Commission File Number 0-50036
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Tricell, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Nevada 88-0504530
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
39 Uttoxeter Road, Longton, Stoke-on-Trent, ST3 1NT United Kingdom
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(Address of Principal Executive Offices) (Zip Code)
011 44 1782 339 130
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(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
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Common Stock, par value $.001 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes: [X] No: [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2) of the Act).
[ ] Yes [ X ] No
The aggregate market value of the voting and non-voting share of Common
Stock held by non-affiliates of the registrant, computed by reference to the
closing price of such stock as of January 7, 2004 was $126,773,250.
The number of shares of Common Stock outstanding as of January 7, 2004 was
93,500,000.
TABLE OF CONTENTS TABLE OF CONTENTS
PART I.........................................................................3
Item 1. Business.........................................................3
Item 2. Property.........................................................5
Item 3. Legal Proceedings................................................5
Item 4. Submission of Matters to a Vote of Security Holders .............5
PART II........................................................................6
Item 5. Market for Common Equity and Related Stockholder Matters.........6
Item 6. Selected Financial Data .........................................6
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operation.........................................7
Item 7a. Quantitative and Qualitative Disclosures aboout Market Risk ....10
Item 8. Financial Statements and Supplementary Data.....................10
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................11
Item 9a. Controls and Procedures.........................................11
PART III......................................................................12
Item 10. Directors and Executive Officers................................12
Item 11. Executive Compensation..........................................13
Item 12. Security Ownership of Certain Beneficial Owner and Management
and Related Stockholder Matters.................................14
Item 13. Certain Relationships and Related Transactions .................15
Item 14. Principal Accounting Fees and Services .........................15
PART IV.......................................................................16
Item 15. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K .......................................................16
Index to Exhibits.............................................................18
2
PART I
PART I
ITEM 1. Business
As used herein, the terms "Company", "we", "our" or "us" refer to Tricell,
Inc., a Nevada corporation, and its subsidiaries and predecessors, unless the
context indicates otherwise. 4ForGolf, Inc. was incorporated in the State of
Nevada on July 9, 2001 to engage in an online golf tee-time reservation service
and golfing resource website, which we operated since our inception. As a result
of our lack of profitability and the Company's receipt of numerous inquires from
entities seeking to merge with us, we decided to change our operational focus in
July, 2003 by executing a Stock Exchange Agreement ("Agreement") with Tricell UK
Limited and Tricell Limited, two United Kingdom corporations (collectively
referred to as "Tricell"). As a result of the Agreement, Tricell UK Limited and
Tricell Limited became our wholly-owned subsidiaries and the Tricell
shareholders became the collective owners of approximately 51% of our
outstanding common stock.
Our operations now consist of supplying and distributing mobile
telephones, telephone accessories and electronic commodities in Europe and Asia.
We attempt to obtain our products at the best prices available and distribute
these products to markets at varying levels of maturity in Europe and Asia.
On October 30, 2003, our board of directors issued a press release
announcing our intended acquisition of ACL Distributors Limited, a UK based
company ("ACL"), pursuant to terms which had been reached to acquire one hundred
percent (100%) of ACL for a proposed maximum consideration of US$2 million in
our common stock and an element of cash to be issued at the closing price on the
day preceding completion. Instead of buying ACL outright, we were able to buy
certain of ACL's assets, on February 19, 2004, and employed certain of its
personnel, including its majority stockholder, Thomas Adams. We tendered a
maximum consideration of $138,000 for these assets. Subsequent to the purchase,
we have issued shares of our common stock valued at $533,400, as of February 19,
2004 to secure the services of the senior management of this business. The ACL
assets have been contributed to and form the basis of operations for our new
subsidiary, Tricell Distribution, a United Kingdom limited company.
Tricell was founded in 1999 to address, and it continues to address, an
opportunity for the sale and distribution of mobile handsets to the global
wholesale market. We have built a core team of people with considerable
expertise and success in product acquisition, wholesale distribution and service
provision in a highly competitive market place.
Our customers include wireless network operators, resellers, retailers and
wireless equipment manufacturers. We handle wireless products manufactured by
technology companies such as Nokia, Motorola, Sony Ericsson, Kyocera, Samsung,
Siemens, Panasonic, NEC and Toshiba.
3
The mobile handset market in 2003 was 444 million and is forecast to grow
to 690 million in 2008 (Source: ARC/Ericsson/Analysys/Forward Concepts/Strategy
Analytics/Nokia). The overall size of the wireless subscriber market is expected
to grow to 1.6 billion subscribers in 2004 from 1.1 billion subscribers in 2002.
Developments in the mobile sector now enable users to talk, send text
messages (SMS), send and receive e-mail, send and receive images, play
interactive games and conduct financial transactions.
The major trends impacting the market we believe are:
Replacement handsets in mature markets. The introduction of color
displays, camera enabled handsets; image messaging (MMS), internet access
and content services will be major drivers for handset replacement.
Strategy Analyatics states that 75% of sales in the US market in 2002 were
replacement handsets and this is expected to grow to 84% in 2004.
Fixed to mobile migration. The evidence suggests that consumers are
continuing to migrate to mobile phones from fixed lines. In the US, nearly
30% of total personal (i.e. non-business) calling minutes were carried on
mobile phones in 2002, and is forecast to grow to more than 50% by 2006.
(Yankee)
Converged devices. The market for Personal Digital Assistants (PDA's)
without voice capabilities is shrinking as customers opt for converged
handheld devices, which, in the 1st Quarter of 2003 experienced growth of
some 438.3% year-over-year (IDC) and 37.6% sequentially to 1.76 million
units. The consensus view is that Smartphones will eclipse PDA's. Almost
3.6 million units of smartphones and smartphone-PDA's were sold in the 2nd
Quarter of 2003, representing about 3.3% of the overall handset market.
(ABI)
As device aesthetics and functionality improve, and end-user prices
continue to decline, converged mobile devices are becoming increasingly
accessible to the mainstream consumer and are expected to ship in greater
numbers than traditional handheld devices for the first time by the end of 2003.
(IDC)
The market in which we operate is highly competitive and has been
characterized by low barriers to entry. Our ability to compete will depend upon
our ability to continue to meet the needs of our customers and identify new and
innovative market opportunities for our services.
We believe our major competitors to be the Caudwell Group, the Hugh Symons
Group, Brightpoint and Cellstar Inc.
4
Governmental Regulation & VAT Tax Effects
We experienced a sharp decline in our revenue and in our trading of mobile
telephones and related accessories in 2003 as compared with 2002 due almost
entirely to a change in the regulatory regime involving VAT recoverability.
Specifically, the regime changed to avail any participant in the purchase and
sale of products to liability for any wrongdoing by any upstream and downstream
purchaser. This regulatory change virtually forced us to halt our sales of
products.
The UK's government tax authority (HM Customs & Excise) retained VAT
refunds the Company believes it was entitled to a refund in an amount equal in
excess of approximately $17.4 million or 9.8 million (British pound).
The amount currently withheld by Customs has been reduced to around $1.78
million, or 1 million (British pound). However, the retention of VAT refunds
severely impacted our ability to trade and sell our products. Notwithstanding a
near cessation of trading in the 4th quarter of 2003, we still achieved revenues
of almost $100 million for the year ended 2003.
Employees
We have twenty-one (21) full time employees.
ITEM 2. Property
Our offices in the United Kingdom are located at 39 Uttoxeter Road,
Longton, Stoke-on-Trent, ST3 1NT, which we currently lease from an unrelated
third party of approximately 9,000 sq.ft, at approximately $82,000 (varies based
on exchange rate, specifically, annual rent is 45,000 British pound).
ITEM 3. Legal Proceedings
The Company is not a party to any legal proceedings and is unaware of any
pending or threatened legal proceedings. However, we are involved in a dispute
over how much VAT tax refund we are entitled to, as more fully described herein.
ITEM 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the Company's security
holders during the fourth quarter of 2003.
5
PART II
ITEM 5. Market for Common Equity and Related Stockholder Matters
Our common stock was approved for trading by the NASD under the symbol
"FFGF" on the OTC Bulletin Board in 2001. On July 28, 2003, our symbol was
changed to "TCLL" to reflect our name change to Tricell, Inc. Because no
meaningful trading market for our common stock occurred until the fourth quarter
of 2003, the table below sets forth the high and low sale prices for our common
stock for only that quarter.
The quotations below reflect inter-dealer prices, without retail markup,
markdown or commission and may not represent actual transactions. All figures
reflect a twenty-for-one (20-for-1) forward stock split which became effective
on July 22, 2003.
Year Quarter High Low
2003 Fourth* $2.05 $1.20
*Note that trading in our common stock on the OTC BB did not begin until
approximately October 1, 2003.
Shareholders
As of January 7, 2004, there were approximately forty-two (42)
shareholders of record holding a total of 93,500,000 shares of common stock.
Dividends on the Common Stock
The Company has not declared a cash dividend on its common stock in the
last two fiscal years and the Company does not anticipate the payment of future
dividends. There are no other restrictions that currently limit the Company's
ability to pay dividends on its common stock other than those generally imposed
by applicable state law.
ITEM 6. Selected Financial Data
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Fiscal Year End 2003 2002 2001
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Operating Revenues $99,850,232 $412,586,977 $170,561,976
Income (Loss) From Operations (94,334) $7,905,794 $751,582
Net Income $159,462 $4,820,908 $495,737
Earnings Per Share $0.00 $0.06 $0.01
Total Assets $7,504,880 $14,427,459 $2,803,338
- --------------------------------------------------------------------------------
We had experienced tremendous growth in our operations until fiscal year
end 2003. During 2003, a number of factors, as more fully set forth below in
Management's Discussion and Analysis of Financial Condition, contributed to
sharp declines in revenues, income and earnings.
6
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking Information
This information statement contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. These statements relate to
future events or to our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. There are a number of factors that could cause our actual
results to differ materially from those indicated by such forward-looking
statements.
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance, or achievements. Moreover, it does not assume
responsibility for the accuracy and completeness of such forward-looking
statements. The Company is under no duty to update any of the forward-looking
statements after the date of this information statement to conform such
statements to actual results. The foregoing management's discussion and analysis
should be read in conjunction with the Company's financial statements and the
notes herein.
Overview
We experienced a sharp decline in our revenue and in our trading of mobile
telephones and related accessories in 2003 as compared with 2002 due almost
entirely to a change in the regulatory regime involving VAT refunds.
Specifically, the regime changed to avail any participant in the purchase and
sale of products to liability for any wrongdoing by any upstream and downstream
purchaser.
The UK's government tax authority (HM Customs & Excise) retained VAT
refunds the Company believes it was entitled to an amount equal in excess of
9.8 million (British pound). The amount currently withheld by Customs has been
reduced to around 1 million (British pound). However, the retention of VAT
refunds severely impacted our ability to trade and sell our products.
Notwithstanding a near cessation of trading in the 4th quarter of 2003, we still
achieved revenues of almost $100 million for the year ended 2003.
7
In the wireless sector, we will continue our wholesale international
distribution of mobile handsets and electronic equipment and feel confident that
we will return to 2002 revenue levels. Our confidence stems from the continued
growth in the market and the demand for our services. This will be complimented
by developing improved relationships with the wireless manufacturers and the
expansion of our integrated logistics services.
Tricell's strategy is two fold. First, we seek to grow our current
business through acquisition to deliver diversification in products and
geography. Additionally, we will attempt to identify business development
opportunities in the wireless communications and associated sectors that offer
high revenues and sustain or improve current margins.
Our strategy for growth and increasing shareholder value includes the
development and expansion of our product and service offerings and geographic
expansion to address the new markets. This is driven by the continuing growth in
handset sales (new and replacement), the growing convergence between voice and
data, the introduction of UMTS and the increasing focus of network operators on
the expansion of their service offering upon proprietary handsets.
To deliver our strategy we will:
Continue to build our relationships with wireless manufacturers,
broadening our portfolio with these manufacturers and expanding the number
of customer to whom we supply;
Expand the geographic coverage of our operations to cover Eastern Europe,
Asia and North America; and
Develop and expand our service offering to deliver integrated logistic
services to the handset manufacturers and network operators, enabling them
to more effectively address their markets, including the distribution,
marketing and selling of airtime services.
We plan to deliver the growth in our business through a combination of
internal expansion, acquisitions and joint ventures.
Results of Operations
Revenue for the year ended December 31, 2003, was $99,850,232, as compared
to $412,586,977 for the year ended December 31, 2002 and $170,561,976 for the
year ended December 31, 2001. Similar to the decrease in
revenue, our gross profit for 2003 decreased to $3,055,152 from $10,316,342 in
2002, and our pre tax income decreased to $387,404 in 2003 as compared to
$7,024,908 in 2002. Our gross profit was $1,374,190 and our pre tax income was
$692,477 for the year ended December 31, 2001. Our net profit reduced to
$159,462 for the year ended 2003, as compared to net profit of $4,820,388 for
2002 and net profit of $495,737 for 2001. The significant decreases in our
revenue, gross profit and net profit are the result of the changes in market
conditions caused by uncertainties and problems encountered throughout this
industry by changes in VAT legislation.
8
For reasons similar to our decrease revenues, our total assets declined
to $7,504,880 as of December 31, 2003, from $14,427,459 as of December 31, 2002.
Most notably, our VAT receivable decreased from $8.87 million in 2002 to $1.37
million in 2003, and our cash decreased from $4,441,294 as of year end 2002 to
$183,241 as of year end 2003.
Selling, general and administrative expenses for the year ended December
31, 2003 were $3,149,486, compared to $2,410,548 for the year ended December 31,
2002. The increase in SG&A expense was mostly due to a one time expense of
$358,000 paid to Deloitte & Touche, LLP in their representation of our sales tax
(VAT) refund dispute, an increase in legal fees of approximately $196,000 and an
increase in salary of about $177,000.
Interest expense and interest income were $64,934 and $486,164,
respectively, for the period ended December 31, 2003 as compared to interest
expense of $866,295 and interest income of $0 during 2002. The decrease in
interest expense is due to the fact that the bank loan was repaid at the
beginning of 2003. The interest income in 2003 relates to the $4.5 million loan
receivable outstanding as December 31, 2003.
Liquidity and Capital Resources
As of December 31, 2003, our cash and cash equivalents were $183,421, as
compared to $4,441,294 as of December 31, 2002. The decrease is primarily due to
our decrease in revenue for the twelve months ended December 31, 2003 as
discussed above.
Cash provided from operating activities for the year ended December 31,
2003 was $8,081,393 as compared to cash provided by operating activities for the
same period of 2002 of $696,373. This change is mainly attributable to a
decrease in sales taxes (VAT) receivable of $7,782,347 for the year ended 2003,
compared to an increase in sales taxes receivable of $6,943,826 for 2002. The
decreased sales tax receivable is due to decreased revenues.
Cash used in investing activity increased to $4,273,059 for the year ended
2003 as compared to $1,043,220 for the same period in 2002. This increase is
primarily attributable to loans to third parties of $3,910,324.
Cash used by financing activities was $8,219,012 for the year ended 2003
compared to cash provided by financing activities of $3,035,297 for 2002. The
increase in cash used in financing activities reflects repayment of borrowing
from a factor company, repayment of loans from a shareholder, and repayment of
long-term debt.
We believe we have sufficient cash to satisfy our operating requirements
for twelve months. We have the ability to restrict our expenditures to the
extent cash is not available to purchase our goods, which will then attempt to
resell. We anticipate that our re-entry into the intra-European market as a
result of the Customs & Excise ruling will increase expenses and, if operations
are successful, revenues. If the cash reserves are not enough to satisfy our
operating needs and we are unable to generate revenues, we will seek bank loans
on favorable terms and/or sell additional shares of our equity securities to
secure the cash required to conduct our business operations for the next twelve
(12) months. During the next twelve months, we plan to offer key positions,
9
which are currently vacant, to management personnel from the acquisition of
Tricell, including but not limited to the position of Chief Operating Officer.
Critical Accounting Policies
Management's discussion and analysis of our financial condition and results of
operations are based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States (GAAP). GAAP represents a comprehensive set of
accounting and disclosure rules and requirements, the application of which
requires management judgments and estimates including, in certain circumstances,
choices between acceptable GAAP alternatives. The preparation of these
consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities, if any, at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. We base our estimates on historical experience and various
other assumptions that are believed to be reasonable under the circumstances.
Actual results could differ from these estimates under different assumptions or
conditions. Note 1 to our consolidated financial statements included elsewhere
in this Form 10-K, contains a comprehensive summary of our significant
accounting policies.
ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk
Our major market risk is to make changes in foreign currency exchange
rates in the British Pound, which could impact our results of operations and
financial condition. Foreign exchange risk arises from our exposure to
fluctuations in foreign currency exchange rates because our reporting currency
is the United States dollar. Management seeks to minimize the exposure to
foreign currency fluctuations through natural internal offsets to the fullest
extent possible. As of December 31, 2003, we had not engaged in any currency
arbitrage or hedging activities, although we may in the future. Our debt is not
subject to one measure of interest, therefore, the debt is somewhat diversified
against interest rate increases.
ITEM 8. Financial Statements and Supplementary Data
The Company's financial statements for the fiscal year ended December 31,
2003 are attached hereto beginning on page F-1.
10
TRICELL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
F-2 Independent Auditors' Report
F-3 Consolidated Balance Sheets as of December 31, 2003 and 2002
F-4 Consolidated Statements of Operations for the Years Ended December 31,
2003, 2002 and 2001
F-5 Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 2003, 2002 and 2001
F-6 Consolidated Statements of Cash Flows for Years Ended December 31,
2003, 2002 and 2001
F-7 Notes to Consolidated Financial Statements
to
F-17
F-1
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Tricell, Inc.
Stoke on Trent, United Kingdom
We have audited the accompanying consolidated balance sheets of Tricell, Inc.
and subsidiaries as of December 31, 2003 and 2002, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 2003. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Tricell, Inc. and
its subsidiaries as of December 31, 2003 and 2002, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2003 in conformity with accounting principles generally accepted in
the United States of America.
BERENFELD, SPRITZER, SHECHTER & SHEER
/s/ Berenfeld, Spritzer, Shechter & Sheer
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Miami, Florida
April 6, 2004
F-2
TRICELL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
2003 2002
--------------------------------------
Accounting
Registrant Acquirers
ASSETS
CURRENT ASSETS
Cash $ 183,241 $ 59,240 $ 4,441,294
VAT receivable, net 1,371,634 0 8,871,538
Notes and loans receivable 4,963,519 0 641,760
Receivable from shareholder 271,123 0 0
Accounts receivable, net 125,262 0 32,088
Prepaid expenses and other
current assets 116,344 0 47,416
--------- ----------- -------------
Total current assets 7,031,123 59,240 14,034,096
MACHINERY AND EQUIPMENT, NET 473,757 0 393,363
--------- ---------- ------------
TOTAL ASSETS 7,504,880 59,240 14,427,459
========= ========== ============
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Short-term notes and loans payable 0 0 8,088,632
Income taxes payable 2,890,939 0 2,402,379
VAT payable 190,143 0 0
Accounts payable 413,091 2,313 332,459
Accrued expenses and other
current liabilities 548,920 0 644,286
Current portion of long-term debt 24,191 0 41,129
--------- ---------- ------------
Total current liabilities 4,067,284 2,313 11,508,885
LONG-TERM DEBT 221,441 0 154,351
C0MMITMENT AND CONTINGENCIES 0 0 0
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par
value, 100,000,000 shares
authorized, none issued and
oustanding
Common stock, $0.001 par value,
500,000,000 shares authorized,
93,500,000 and 46,000,000
shares issued and outstanding
during 2003 and 2002, respectively 93,500 46,000 1,615
Additional paid-in capital 0 24,000 0
Retained earnings (deficit) 2,690,254 (12,351) 2,572,362
Accumulated other comprehensive
income (loss) 432,401 (722) 190,246
--------- ---------- -----------
Total stockholders' equity 3,216,155 56,927 2,764,223
--------- ---------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,504,880 $ 59,240 $14,427,459
=========== ========== ============
The accompanying notes are an integral part of these fincial statements
F-3
TRICELL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
--------------------------------------------
2003 2002 2001
------------ ------------ ------------
SALES $ 99,850,232 412,586,977 170,561,976
COST OF SALES 96,795,080 402,270,635 169,187,786
---------- ----------- -----------
GROSS PROFIT 3,055,152 10,316,342 1,374,190
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,149,486 2,410,548 622,608
--------- --------- -------
INCOME (LOSS) FROM OPERATIONS (94,334) 7,905,794 751,582
OTHER INCOME (EXPENSES)
Interest expense
and other financing costs (64,934) (866,295) (93,289)
Gain (loss) on sales of
fixed assets 60,478 (14,591) 11,411
Interest income 486,194 0 22,773
---------- --------- ----------
Total Other Income
(Expenses) 481,738 (880,886) (59,105)
---------- --------- ----------
INCOME BEFORE INCOME TAXES 387,404 7,024,908 692,477
INCOME TAX EXPENSE (227,942) (2,204,520) (196,740)
--------- ----------- ---------
NET INCOME $ 159,462 $ 4,820,388 $ 495,737
============ ============ ============
EARNING PER SHARE -
BASIC AND DILUTED $ 0.00 $ 0 $ 0
============ ============ ============
EARNING PER SHARE -
BASIC AND DILUTED (PROFORMA) $ 0 $ 0.06 $ 0.01
============ ============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED $ 74,148,148 $ 0 $ 0
============ ============ ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND
DILUTED (PROFORMA) $ 0 $ 79,965,760 $ 67,500,00
============ ============ ===========
The accompanying notes are an integral part of these fincial statements
F-4
TRICELL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
Accumulated
Common Stock Additional Retained Other Total
Paid-in Earnings Comprehensive Stockholder's
Shares Amount Capital (Deficit) Income (Loss) Equity
------------ ------- -------- ----------- ------------- --------------
TRICELL UK LTD AND TRICELL LIMITED
BALANCE, JANUARY 1, 2001 1,001 $ 1,615 $ 0 $ 293,220 $ 388 $ 295,223
Comprehensive Income:
Net income 0 0 0 495,737 0 495,737
Other comprehensive loss,
net of income tax benefit:
Foreign currency translation
adjustment 0 0 0 0 (3,095) (3,095)
---------
Total comprehensive income 0 0 0 0 0 492,642
Dividends 0 0 0 (271,262) 0 (271,262)
-------- -------- -------- ------------ ------------- ---------------
BALANCE, DECEMBER 31, 2001 1,001 1,615 0 517,695 (2,707) 516,603
-------- -------- -------- ------------ -------------- ---------------
Comprehensive Income:
Net income 0 0 0 4,820,388 0 4,820,388
Other comprehensive income,
net of income tax expense:
Foreign currency translation
adjustment 0 0 0 0 192,953 192,953
-------
Total comprehensive income 0 0 0 0 5,013,341
Dividends 0 0 0 (2,765,721) 0 (2,765,721)
-------- ------- --------- ------------- ------------- -------------
BALANCE, DECEMBER 31, 2002 1,001 1,615 0 2,572,362 190,246 2,764,223
--------- ------- --------- ------------- ------------- ------------
TRICELL, INC.,
BALANCE, JULY 21, 2003 2,300,000 2,300 67,700 (24,720) (722) 44,558
Forward stock split (20 for 1) 43,700,000 43,700 (43,700) 0 0 0
---------- -------- -------- ------------ ------------- ------------
Balance prior to acquisition 46,000,000 46,000 24,000 (24,720) (722) 44,558
COMBINED ENTITIES 46,001,001 47,615 24,000 2,547,642 189,524 2,808,781
- -----------------
Issuance of common stock by
Tricell UK LTD and Tricell
Limited prior to acquisition 2,999 5,035 0 0 0 5,035
Shares issued in acquisition 47,500,000 47,500 0 0 0 47,500
Reverse merger adjustments (4,000) (6,650) (24,000) (16,850) 0 (47,500)
Comprehensive Income:
Net income 0 0 0 159,462 0 159,462
Other comprehensive income,
net of income tax expense:
Foreign currency translation
adjustment 0 0 0 0 242,877 242,877
-------
Total comprehensive income 0 0 0 0 0 402,339
---------- ------- -------- ----------- ------------- -------
BALANCE, DECEMBER 31, 2003 93,500,000 $93,500 $ 0 $ 2,690,254 $ 432,401 $ 3,216,155
========== ======= ======== =========== ============= ==============
The accompanying notes are an integral part of these financial statements
F-5
TRICELL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
2003 2002 2001
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 159,462 $ 4,820,388 $ 495,737
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 139,204 125,004 22,274
(Gain) loss on sale of fixed assets (60,478) 14,591 (11,411)
Changes in operating assets
and liabilities:
(Increase) decrease in:
VAT receivable 7,782,347 (6,943,826) (1,314,320)
Accounts receivable (82,482) (30,075) 221,061
Prepaid and other current assets (53,750) 60,821 (100,892)
Increase (decrease) in:
Accounts payable and accrued
expenses (187,321) 669,487 16,709
VAT payable 174,859 0 0
Income taxes payable 209,552 1,979,983 (189,035)
------- --------- ---------
Net Cash Provided By (Used In)
Operating Activities 8,081,393 696,373 (859,877)
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of machinery and equipment (401,079) (554,976) (49,134)
Proceeds from sale of machinery and
equipment 287,674 113,264 103,773
Loans to third-parties (3,910,324) (601,508) 0
Loans to shareholder (249,330) 0 0
--------- ----------- ---------
Net Cash Provided by (Used In)
Investing Activities (4,273,059) (1,043,220) 54,639
----------- ----------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payments of dividends 0 (2,765,721) (271,262)
Borrowing from (repayment to) factor
company (4,934,794) 4,100,934 418,159
Increase in bank loans 26,614 0 0
Borrowing from (repayment to)
shareholder (1,675,292) 1,516,865 22,480
Borrowing from (repayment to)
third-parties (1,635,540) 183,219 1,441,310
----------- ------- ---------
Net Cash Provided by (Used In)
Financing Activities (8,219,012) 3,035,297 1,610,687
----------- --------- ---------
NET INCREASE (DECREASE) IN CASH (4,410,678) 2,688,450 805,449
EFFECT OF EXCHANGE RATE ON CASH 92,711 449,766 (6,052)
CASH, BEGINNING OF PERIOD:
Tricell UK and Tricell Limited 4,441,294 1,303,078 503,681
Tricell Inc 59,914 0 0
----------- ----------- ------------
4,501,208 1,303,078 503,681
CASH, END OF YEAR $ 183,241 $ 4,441,294 $ 1,303,078
============ =========== ============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS INFORMATION:
Net Cash Provided by (Used In)
Financing Activities
Interest paid during the year $ 64,934 $ 866,295 $ 93,289
============ ============ ============
Income taxes paid during the year $ 0 $ 226,648 $ 385,775
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Shares issued in acquisitions of
Tricell UK and Tricell Limited $ 47,500 $ 0 $ 0
============ ============ ============
The accompanying notes are an integral part of these financial statements
F- 6
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
ORGANIZATION AND CAPITALIZATION
-------------------------------
Tricell, Inc. (the "Company") was incorporated as 4ForGolf,Inc. in the
State of Nevada on July 9, 2001. The Company was in development stage
until July 2003, when it acquired two United Kingdom corporations,
(Tricell UK LTD, incorporated in October 8, 1999 and Tricell Limited,
incorporated on November 11, 1999) in a reverse acquisition. (See Note 2).
On July 11, 2003, the Company changed its name to Tricell, Inc.
In July 2003, the Company's articles of incorporation were amended to
increase the authorized number of common stock, $0.001 par value, from
100,000,000 to 500,000,000 and to authorize a class of 100,000,000 shares
of preferred stock, $0.001 par value. There were no preferred stock
outstanding at December 31, 2003.
Also in July 2003, the Company conducted a forward stock split of its
issued and outstanding common stock on a 20 new for 1 old basis. All stock
figures have been restated to reflect the stock split.
BUSINESS
--------
The Company is a worldwide distributor of mobile telephones and other
mobile handset accessories.
USE OF ESTIMATES
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of Tricell,
Inc. and its wholly-owned subsidiaries, Tricell UK LTD and Tricell
Limited. All significant intercompany transactions and balances have been
eliminated in consolidation.
F-7
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
FOREIGN CURRENCY TRANSLATIONS
-----------------------------
Tricell UK LTD's and Tricell Limited's functional currency is the British
pound, their local currency. Accordingly, balance sheet accounts have been
translated at the exchange rate in effect at the end of the year and
income statement accounts have been translated at average rates for the
years. Translation gains and losses are included as a separate component
of stockholders' equity as Cumulative Translation Adjustments. Foreign
currency transaction gains and losses are included in other income and
expenses.
CASH AND CASH EQUIVALENTS
-------------------------
The Company considers all highly liquid investments with an original term
of three months or less to be cash equivalents. There were no cash
equivalents at December 31, 2003 and 2002.
CONCENTRATION OF CREDIT RISK
----------------------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash.
The Company maintains cash balances at several banks, both in the UK and
in the US. Accounts in the UK are not insured. Uninsured cash balances
amounted to approximately $184,000 and $4,442,000 at December 31, 2003 and
2002, respectively.
ACCOUNTS RECEIVABLE
-------------------
The Company conducts business and extends credit based on the evaluation
of its customers' financial condition, generally without requiring
collateral. Exposure to losses on receivables is expected to vary by
customer due to the financial condition of each customer. The Company
monitors credit losses and maintains allowances for anticipated losses
considered necessary under the circumstances. Recoveries of accounts
previously written off are recognized as income in the periods in which
the recoveries are made. No allowance for doubtful accounts was provided
at December 31, 2003 and 2002, as the Company considers all accounts
receivable to be fully collectible.
F-8
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
-----------------------------------------------------------------------
The Company reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future
undiscounted cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds
the fair value. Assets to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell. There were no asset
impairments during the years ended December 31, 2003, 2002 and 2001,
respectively.
REVENUE RECOGNITION
-------------------
The Company recognizes revenues when a sales agreement has been executed,
delivery has occurred, and collectibility of the fixed or determinable
sales price is reasonably assured.
COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------------------------
The significant components of the line item "Cost of sales" include the
cost to acquire merchandise from vendors and freight in.
The significant components of the line item "Selling, general and
administrative expenses" primarily include payroll and related payroll
benefits; rent and other office expenses; travel and entertainment and
other corporate- related expenses.
PROPERTY AND EQUIPMENT
----------------------
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets.
Expenditures for major betterments and additions are capitalized, while
replacement, maintenance and repairs, which do not extend the lives of the
respective assets, are charged to expense currently.
F-9
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
Any gain or loss on disposition of assets is recognized currently in the
statement of income.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-----------------------------------------------------
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
-----------------------------------------------
The Company's financial instruments consist primarily of cash, accounts
and sales taxes receivable, loans receivable, accounts payable and accrued
expenses, and debt. The carrying amounts of such financial instruments
approximate their respective estimated fair value due to the short-term
maturities and approximate market interest rates of these instruments. The
estimated fair value is not necessarily indicative of the amounts the
Company would realize in a current market exchange or from future earnings
or cash flows.
INCOME TAXES
------------
The Company accounts for income taxes using SFAS No. 109, "Accounting for
Income Taxes," which requires recognition of deferred tax liabilities and
assets for expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the differences
are expected to reverse. A valuation allowance is recorded for deferred
tax assets if it is more likely than not that some portion or all of the
deferred tax assets will not be realized.
ADVERTISING COSTS
-----------------
Advertising costs are expensed as incurred. The Company incurred $70,253,
32,080 and $34,907 in advertising costs for the years ended December 31,
2003, 2002 and 2001, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In January 2003, the FASB issued Interpretations No. 46,
"Consolidation of Variable Interest Entities". FIN No. 46
addresses consolidation by business enterprises of variable
interest entities (formerly special purpose entities or
"SPEs"). The Company does not have any variable interest
entities as defined by FIN No. 46.
F-10
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-----------------------------------------------------
RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
--------------------------------------------
In April 2003, the FASB issued Statement No. 149, "Amendment of Statement
No. 133 on Derivative Instruments and Hedging Activities". This statement
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under Statement No. 133, "Accounting
for Derivatives Instruments and Hedging Activities." The provisions of
this statement are effective for all derivatives and hedging activities
entered into after June 30, 2003. The Company does not participate in such
transactions, and accordingly, adoption of this statement did not have a
material effect on the Company's financial statements.
In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity". SFAS No. 150 establishes standards on the classification and
measurement of certain instruments with characteristics of both
liabilities and equity. The provisions of SFAS No. 150 are effective for
financial instruments entered into or modified after May 31, 2003 and to
all other instruments that exist as of the beginning of the first interim
financial reporting period beginning after June 15, 2003. The Company does
not have such instruments, and accordingly, adoption of this statement did
not have a material effect on the Company's financial statements.
NOTE 2 - ACQUISITIONS
------------
On July 21, 2003, the Company executed a Stock Exchange Agreement with
Tricell UK LTD and Tricell Limited. Pursuant to the Agreement, the Company
acquired all of the issued and outstanding capital stock of Tricell UK LTD
and Tricell Limited, in aggregate, in exchange for 47,500,000 post-forward
stock split shares of the Company's common stock. As a result of the
Agreement, Tricell UK LTD and Tricell Limited became wholly owned
subsidiaries of the Company, and their former shareholders became the
collective owners of 51% of the Company.
Prior to the acquisitions, the Company was a non-operating entity, with
minimal net assets (approximately $54,000 at June 30, 2003).
F-11
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 2 - ACQUISITIONS (CONTINUED)
------------------------
As a result of Tricell UK LTD and Tricell Limited shareholders owning the
majority of the stock of the combined company, and as a result of the
Company having minimal net assets, the acquisition was accounted for as a
"reverse recapitalization" with no goodwill or intangible assets
recognition. Tricell UK LTD and Tricell Limited were deemed the accounting
acquirers.
REPORTING PERIOD
----------------
The accompanying consolidated financial statements for the year ended
December 31, 2003 depict the results of operations and cash flows of the
accounting acquirers for the twelve months ended December 31, 2003 and the
results of operations and cash flows of the registrant from July 21, 2003
(date of acquisition) to December 31, 2003. The accompanying consolidated
financial statements for the year ended December 31, 2002 depict the
results of operations and cash flows of the accounting acquirers only. The
accompanying consolidated financial statements for the year ended December
31, 2001 depicts the results of operations and cash flows of Tricell UK
LTD for the twelve months ended December 31, 2001 and the results of
operations and cash flows of Tricell Limited from December 1, 2001 (date
it commenced operations) to December 31, 2001. No proforma results of
operations is provided as the results of operations of the registrant for
the years ended December 31, 2003 and 2002 and for the period from July 9,
(date of its incorporation) to December 31, 2001 were immaterial. Tricell,
Inc.'s net loss for the period from January 1, 2003 to July 21, 2003
(prior to the acquisition) amounted to $24,720. Its net loss for the year
ended December 31, 2002 amounted to $8,714, and its net loss for the
period from July 9, 2001 to December 31, 2001 amounted to $3,637.
NOTE 3 - MACHINERY AND EQUIPMENT
As of December 31, 2003 and 2002, machinery and equipment consisted of the
following:
2003 2002
Machinery $ 56,983 $ 37,266
--------- ---------
Motor vehicles 538,951 497,144
---------- ---------
595,934 534,410
---------- ---------
Less: Accumulated depreciation (122,177) (141,047)
---------- ----------
Machinery and equipment, net $ 473,757 $ 393,363
========= =========
F-12
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 3 - MACHINERY AND EQUIPMENT (CONTINUED)
-----------------------------------
Depreciation expense was $139,204, $125,004 and $22,274 for the years ended
December 31, 2003, 2002 and 2001, respectively.
NOTE 4 - NOTES AND LOANS RECEIVABLE
--------------------------
On May 21, 2003, the Company entered into a loan facility agreement with
a third party, whereas the Company was to lend up to $3,167,000 to the
third party. The loan bears interest at 2% above the Base Rate of
Barclays Bank plc and was due on October 31, 2003. The facility was
subsequently increased to up $4,000,000 and the maturity was extended to
December 31, 2003.
On December 5, 2003, the maturity of the loan was further extended to
April 30, 2004.
The loan provides for an additional fee of approximately $409,000 to be
collected at maturity. This amount, along with accrued interest on the
loan of $77,194, is included in the accompanying income statements as
interest income.
As of December 31, 2003, the balance of the loan (including accrued
interest and fees, as discussed above) was $4,589,424. On April 14, 2004,
approximately $3,735,000 was repaid and the balance is expected to be
repaid prior to April 30, 2004.
The remaining balance of $374,095 included in notes and loans receivable
in the accompanying consolidated balance sheet consist of short-term
loans to two of the Company's suppliers.
On November 15, 2002, the Company lent $641,760 to an unrelated entity,
as evidenced by a note. The note was due on November 15, 2003 and bore
interest at the rate of 20% per annum. The note was secured by all assets
of the entity. The note was repaid in 2003.
F-13
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 5 - SHORT-TERM NOTES AND LOANS PAYABLE
-----------------------------------
Short-term notes and loans payable consist of the following at December 31,
2003 and 2002:
2003 2002
--------- ----------
Loan payable to bank, in connection
with an Invoice Discounting Facility
for the Company's Value-Added-Tax
("VAT") receivables, bearing interest
at 2.75% above the Bank of England rate.
The facility was terminated by the bank
in February of 2003 and the loan fully
repaid. $ - $4,840,837
Loan payable to shareholder; the loan
was non-interest bearing and was due
on demand. The loan was repaid during
2003. - 1,643,395
Note payable to a third-party,
originally due on May 31, 2002, bearing
interest at 15% per annum. The due date
was extended to January 30, 2003 at 25% per
annum. The note plus accrued interest was
repaid in May 2003. - 1,604,400
---------- -----------
$ - $8,088,632
========== ===========
NOTE 6 - LONG-TERM DEBT
Following is a summary of long-term debt as of December 31,
2003 and 2002:
2003 2002
--------- ---------
Notes payable to finance companies
due at various times through 2007,
requiring monthly installments of
approximately $3,255 in 2003 and $4,300
in 2002, including interest ranging
from 6.75% to 7.8%, secured by Company's
car. $ 245,632 $ 195,480
Less: current maturities: (24,191) (41,129)
---------- -----------
$ 221,441 $ 154,351
F-14
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 6 - LONG-TERM DEBT (CONTINUED)
--------------------------
Following are maturities of long-term debt for each of the next 5 years:
Year ended December 31, Amount
---------
2004 $ 24,191
2005 72,739
2006 17,618
2007 131,084
---------
Total $ 245,632
=========
NOTE 7 - OPERATING LEASES
----------------
Commencing in January 2001, the Company leased two office suites under an
operating lease that was to expire in 2003. During 2002, the Company reduced
the number of offices to one. Upon termination of the lease in 2003, the
Company continued to occupy the office on a month-to-month basis, at the
same rate. The Company is currently looking for new office facilities.
Rent expense was $16,735, $13,384, and $30,856 for the years ended December
31, 2003, 2002 and 2001, respectively.
NOTE 8 - INCOME TAXES
-------------
The provisions for income taxes consisted of the following:
2003 2002 2001
--------- ----------- -----------
Current $ 209,825 $2,235,625 $ 196,740
Deferred 18,117 (31,105) -
--------- ----------- ------------
Total tax provision $ 227,942 2,204,520 $ 196,740
========= =========== ============
At December 31, 2003, the Company had a deferred tax asset of approximately
$15,000, consisting of differences in depreciation between book and tax.
This amount is included in "prepaid expenses and other current assets".
F-15
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 8 - INCOME TAXES (CONTINUED)
------------------------
A reconciliation of the statutory tax with the effective tax follows:
2003 2002 2001
--------- ---------- -----------
UK statutory corporation
rate $ 183,797 $2,107,472 $ 195,737
Effects of:
Depreciation 2,337 23,818 (6,167)
Expenses not allowable
for tax purposes 23,691 100,419 1,522
Other - 3,916 5,648
---------- ----------- ----------
Effective tax $ 209,825 $2,235,625 $196,740
========== =========== ===========
NOTE 9 - RELATED PARTY TRANSACTIONS
--------------------------
As of December 31, 2002, the Company owed $1,643,395 to one of its
shareholder. See Note 5. During 2003, the Company made several payments to
the shareholder in repayment of the loan and inadvertently overpaid him,
resulting in a receivable of $271,123 from the shareholder as of December
31, 2003. The shareholder intends to repay the loan during the second
quarter of 2003.
NOTE 10 -PENSION PLAN
------------
The Company has a defined contribution pension plan that covers
substantially all directors and employees. The assets of the plan are held
separately from those of the Company. During 2003, 2002 and 2001,
contributions to the plan charged to operations were $64,169, $52,682, and
$35,981, respectively.
NOTE 11- COMMITMENTS AND CONTINGENCIES
-----------------------------
In the ordinary course of business, the Company filed monthly claims for
refund of VAT (Value-Added-Tax) of approximately $14,230,000 for November
2002 through February 2003. The VAT authorities determined that $1,650,000
of this VAT was associated with particular transactions involved in
"Carousel" and/or "Missing Trader" fraud and therefore, the refund of the
VAT was denied. The Company referred the matter to the Tribunal which upon
review concluded that there was no wrongdoing by the Company, however, they
concluded that these transactions had no economic substance, since the VAT
had not been previously paid by a trader up the supply chain, and therefore
as the VAT was not held by the VAT authorities, no refund was available.
While the Company continues to seek recovery of this VAT, based upon the
Tribunal findings, recovery of the VAT associated with these transactions is
uncertain and therefore the Company has provided for an allowance of
$942,000 against VAT receivable as of December 31, 2002 and an allowance of
$708,000 against VAT receivable as of December 31, 2003.
F-16
TRICELL, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
NOTE 12 -ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
----------------------------------------------
Accumulated other comprehensive income (loss) consisted of the following at
December 31, 2003, 2002 and 2001:
2003 2002 2001
--------- --------- -----------
Foreign currency translation
adjustments $ 617,716 $271,781 $(3,757)
Deferred income tax
adjustment (183,315) (81,535) 1,050
----------- ---------- ----------
$ 432,401 $190,246 $(2,707)
=========== ========== ===========
NOTE 13 -SEGMENT REPORTING
------------------
The Company has only one reportable segment.
Net sales to customers in excess of 10% of total sales approximated the
following during the years ended December 31, 2003, 2002 and 2001:
2003 2002 2001
---- ----- -----
19% - 14%
11% - -
Purchases from vendors in excess of 10% of total purchases approximated the
following during the years ended December 31, 2003, 2002 and 2001:
2003 2002 2001
---- ---- ----
18% 16% 20%
14% 12% 18%
- - 12%
Revenues from the United Kingdom and other countries were as follows:
2003 2002 2001
----------- ------------- --------------
UK $17,023,049 $ 181,766,309 $ 160,120,831
----------- ------------- -------------
Netherlands 20,079,452 - -
----------- ------------- -------------
Belgium 19,291,947 47,069,147 -
----------- ------------- -------------
Hong Kong 18,475,573 - -
----------- ------------- -------------
France 16,726,056 125,439,203 -
----------- ------------- -------------
Other 8,254,155 58,312,318 10,441,145
----------- ------------- -------------
Total other
countries 82,827,183 230,820,668 10,441,145
----------- ------------- -------------
Total $99,850,232 $ 412,586,977 $ 170,561,976
=========== ------------- -------------
The company has no long-lived assets outside of the United Kingdom.
NOTE 14 - SUBSEQUENT EVENT
------------------
On February 9, 2004, the Company purchased certain tangible and
intangible assets of ACL Distribution Limited, a company located in the
United Kingdom, for total consideration of approximately $138,000.
Subsequent to February 9, 2004, the Company issued shares of its common
stock to secure the services of ACL's senior management. This purchase
was not material to the Company's financial statements.
F-17
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On September 4, 2003, the board of directors of the Company, appointed
Berenfeld, Spritzer, Shechter & Sheer ("Berenfeld") as the Company's independent
accountant for the fiscal year ended December 31, 2003. This appointment
represents a change in the Company's accountant from De Visser Gray ("De
Visser"). The dismissal of De Visser was approved by the board of directors of
the Company on September 4, 2003 and was prompted by the fact that the Company's
management and operational focus has changed.
There were no disagreements with De Visser on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure during either of the Company's two most recent fiscal years or any
subsequent interim period through the date of dismissal. During the two most
recent fiscal years and any subsequent interim period through the date of
dismissal, De Visser's reports on the financial statements did not contain an
adverse opinion or disclaimer of opinion, nor have they been modified as to
uncertainty, audit scope or accounting principles. However, their reports
contained an explanatory paragraph regarding the Company's ability to continue
as a going concern.
ITEM 9A. Controls and Procedures
As of April 14, 2004, the conclusions of the Company's principal
executive officer and principal financial officer regarding the effectiveness of
the Company's disclosure controls and procedures as of December 31, 2003 were as
follows:
Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and the
person performing functions similar to that of a Chief Financial Officer of the
Company, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon the evaluation, the Company's Chief Executive Officer and the person
performing functions similar to that of a Chief Financial Officer of the Company
concluded that the Company's disclosure controls are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic SEC
filings. There have been no significant changes in the Company's internal
controls or in other factors which could significantly affect internal controls
subsequent to the date the Company conducted its evaluation.
11
PART III
ITEM 10. Directors and Executive Officers
The Company's executive officers and directors and their ages and positions
as of March 31, 2004 are as follows:
Name Age Position(s) and Office(s)
Andre Salt 29 Chief Executive Officer and Chairman of
the Board
Robert Stone 40 President, Director
Albert Amritanand 58 Secretary, Treasurer and Director
Andre Salt was appointed Chief Executive Officer of the Company on July
11, 2003. Mr. Salt had served previously as managing director of Tricell UK
Limited since October 1999 before moving to his current position with the
Company. He previously served as managing director of Tricell Limited from
December 2001 to December 2003. Prior to working with Tricell, Mr. Salt served
as a key account sales manager for Cellular Cellstar from 1997 to 1999. He also
worked as a salesman for The Caudwell Group from 1995 to 1997.
Robert Stone was appointed President and Director of the Company on July
11, 2003. In addition to his duties with the Company, Mr. Stone is the Group
Managing Director for Lighting Accessories UK.
Albert Amritanand was appointed Director, Secretary and Treasurer of the
Company on July 11, 2003. Currently, Mr. Amritanand serves as Chief Executive
Officer of Britannia Heavy Equipment, a position he has held since January,
2003. Previously, Mr Amritanand served as a managing director of East Usambara
Tea Company from March, 1996 to October 2001. Additionally, Mr. Amritanand
served as a consultant for CDC Capital Partners and Bentash Holdings, Ltd. from
October 2001 to January 2003.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4 and 5 furnished to the Company,
the Company is not aware of any person who at any time during the fiscal year
ended December 31, 2003, was a director, officer, or beneficial owner of more
than ten percent of the Common Stock of the Company, and who failed to file, on
a timely basis, reports required by Section 16(a) of the Securities Exchange Act
of 1934 during such fiscal year, except for Andre Salt who became President and
a Director in August 2003 which was reported on a late Form 3 filing and Albert
Amritanand who became Secretary, Treasurer and a Director in August 2003 and it
was reported on a late Form 3 filing.
Audit Committee
We did not have an audit committee in 2002 and 2003 because we did not
have any independent directors. We are in the process of searching for
independent directors, as well as an audit committee financial expert.
12
Code of Ethics
We have not yet adopted a Code of Ethics for Business Conduct but expect
to do so in the very short term.
ITEM 11. Executive Compensation
No compensation in excess of $100,000 was awarded to, earned by, or paid
to any executive officer of the Company during the fiscal years 2003, 2002 and
2001, other than our CEO in 2003. The following table provides summary
information for the years 2003, 2002 and 2001 concerning cash and noncash
compensation paid or accrued by the Company to or on behalf of the Company's
chief executive officer.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and Principal Position Year Annual Compensation
Salary ($)
- ----------------------------------- ------------- ----------------------
Andre Salt, CEO 2003 $163,300*
- ----------------------------------- ------------- ----------------------
David Knapfel, President 2003 - 0 -
- ----------------------------------- ------------- ----------------------
David Knapfel, President 2002 - 0 -
- ----------------------------------- ------------- ----------------------
David Knapfel, President 2001 - 0 -
- ----------------------------------- ------------- ----------------------
* This salary compensation was for the period of July 1, 2003 through December
31, 2003.
Awards Payouts
Name and Year Restricted Securities LTIP All Other
Principal Position Stock Underlying Payouts ($) Compensation
Award(s)($) Options/SARS ($)
(#)
- --------------------------------------------------------------------------------
Andre Salt, 2003 0 0 0 0
CEO
- --------------------------------------------------------------------------------
David Knapfel, 2003 0 0 0 0
President
- --------------------------------------------------------------------------------
David Knapfel, 2002 0 0 0 0
President
- --------------------------------------------------------------------------------
David Knapfel, 2001 0 0 0 0
President
- --------------------------------------------------------------------------------
Employee Agreements
Although we intend to enter into employment agreements with certain of our
management, we have not yet done so.
Director Compensation
The Company's directors are not compensated for any board meetings they
attend.
13
Compensation Committee Interlocks and Insider Participation
We did not have a board compensation committee or other board committee
performing equivalent functions in 2003 because we did not have any independent
directors. We are in the process of searching for independent directors. Andre
Salt, our CEO and Chairman, and Bertie Amritanand, our Secretary/Treasurer and a
director, were our executive officers who participated in deliberations of the
registrant's board of directors concerning executive officer compensation.
As of December 31, 2002, we owed our shareholder/principal executive
officer, Andre Salt, approximately $1.64 million as a result of various loans.
During 2003, these loans were repaid through various installments. However, in
the process of satisfying these loans, we inadvertently tendered more than our
indebtedness, which resulted in a receivable to us of $271,123, as of December
31, 2003. The shareholder/officer intends to repay this overpayment during the
second quarter of 2004.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information concerning the
ownership of the Company's Common Stock as of January 7, 2004, with respect to:
(i) each person known to the Company to be the beneficial owner of more than
five percent of the Company's Common Stock; (ii) all directors; and (iii)
directors and executive officers of the Company as a group. The number of shares
listed as beneficially owned in the following table reflect the forward stock
split of twenty-for-one (20-for-1) of the Company's issued and outstanding
common stock which became effective on July 22, 2003. As of January 7, 2004,
there were 93,500,000 shares of Common Stock issued and outstanding.
Title of Class Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- --------------------------------------------------------------------------------
Executive Officers and Directors
- --------------------------------------------------------------------------------
Andre Salt
Common Stock 39 Uttoxeter Road, Longton 24,225,000 25.9%
($0.001) par value Stoke-on-Trent, ST3 1NT
United Kingdom
- --------------------------------------------------------------------------------
Common Stock Robert Stone
($0.001) par value 39 Uttoxeter Road, Longton 0 0
Stoke-on-Trent, ST3 1NT
United Kingdom
- --------------------------------------------------------------------------------
Albert Amritanand
Common Stock 39 Uttoxeter Road, Longton 0 0
($0.001) par value Stoke-on-Trent, ST3 1NT
United Kingdom
- --------------------------------------------------------------------------------
Common Stock Directors and Executive Officer 24,225,000 25.9%
($0.001) par value as a Group
(3 individuals)
- --------------------------------------------------------------------------------
14
ITEM 13. Certain Relationships and Related Transactions
There have been no actual or proposed transactions to which the Company
was or is to be a party to in which any Director, Executive Officer, nominee for
election as Director, security holder, or any member of the immediate family of
any of the aforementioned had or is to have a direct or indirect material
interest, other than the following:
As of December 31, 2002, we owed our shareholder/principal executive
officer approximately $1.64 million as a result of various loans. During 2003,
these loans were repaid through various installments. However, in the process of
satisfying these loans, we inadvertently tendered more than our indebtedness,
which resulted in a receivable to us of $271,123, as of December 31, 2003. The
shareholder/officer intends to repay this overpayment during the second quarter
of 2004.
ITEM 14. Principal Accounting Fees and Services
The aggregate fees billed by Berenfeld, Spritzer, Shechter & Sheer, CPA
for professional services rendered for the audit of the Company's annual
financial statements for the fiscal year ended December 31, 2003 and 2002 and
for the reviews of the financial statements included in the Company's Quarterly
Reports on Form 10-QSB for those fiscal years was $122,000.
Audit-Related Fees
Berenfeld, Spritzer, Shechter & Sheer, CPA did not render any professional
services for information technology services relating to financial information
systems design and implementation for the fiscal years ended December 31, 2003
and December 31, 2002.
Tax Fees
Berenfeld, Spritzer, Shechter & Sheer, CPA did not render any professional
services for tax compliance, tax advice, or tax planning during 2003.
All Other Fees
The aggregate fees billed by Berenfeld, Spritzer, Shechter & Sheer, CPA
for services rendered to the Company, other that the services described under
"Audit Fees" and "Audit-Related Fees" and tax fees amount to $0 and $0 for the
fiscal years December 31, 2003 and 2002, respectively. In discharging its
oversight responsibility with respect to the audit process, the Company
15
obtained from the independent auditors a formal written statement describing all
relationships between the auditors and the Company that might bear on the
auditors' independence consistent with Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees", discussed with the auditors
any relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence. The Company also discussed
with management and the independent auditors the quality and adequacy of the
Company's internal controls and the outsourced audit functions,
responsibilities, budgeting and staffing. The Company reviewed with the
independent auditors their audit plans, audit scope and identification of audit
risks. The Company discussed and reviewed with the independent auditors all
communications required by auditing standards generally accepted in the United
States of America, including those described in Statement on Auditing Standards
No. 61, as amended, "Communication with Audit Committees", and discussed and
reviewed the results of the independent auditors audit of the financial
statements. The Company also discussed the results of the internal audit
examinations.
PART IV
ITEM 15. Exhibits, Lists and Reports on Form 8-K
(a) We are filing the following documents as a part of this report:
* Independent Auditors' Report;
* Consolidated Balance Sheets as of December 31, 2003 and 2002;
* Consolidated Statements of Operations for the Years Ended
December 31, 2003, 2002 and 2001;
* Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 2003, 2002 and 2001;
* Consolidated Statements of Cash Flows for Years Ended December
31, 2003, 2002 and 2001;
* Notes to Consolidated Financial Statements.
Exhibits. Exhibits required to be attached by Item 601 of
Regulation S-B are listed in the Index to Exhibits beginning on page
18 of this Form 10-K, which is incorporated herein by reference.
(b) No reports on Form 8-K were filed on the Company's behalf during the quarter
ended December 31, 2003.
16
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 14th day of April 2004.
Tricell, Inc.
Date: April 14, 2004 /s/ Andre Salt
--------------------------------------------
By: Andre Salt, CEO and Chairman of the Board
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date: April 14, 2004 /s/ Andre Salt
---------------------
By: Andre Salt
CEO and Chairman of the Board
Date: April 14, 2004 /s/ Robert Stone
---------------------
By: Robert Stone
President and Director
Date: April 14, 2004 /s/ Albert Amritanand
-----------------------
By: Albert Amritanand
Secretary, Treasurer and Director
17
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
- ---------- -------------------
3(i) * Articles of Incorporation of the Company.(Incorporated by
reference from the Company's Form 10-SB12G, file number
000-50036, filed on October 11, 2002.)
3(ii) * Bylaws of the Company. (Incorporated by reference from the
Company's Form 10-SB12G, file number 000-50036, filed on
October 11, 2002.)
21 19 List of Subsidiaries
31(i) 20 Certification of Chief Executive Officer under Section 302 of
the Sarbanes-Oxley Act of 2002.
31(ii) 21 Certification of Chief Financial Officer under Section 302 of
the Sarbanes-Oxley Act of 2002.
32(i) 22 906 Certification of Chief Executive Officer of Tricell, Inc.
Pursuant to 18 U.S.C.ss.1350
32(ii) 23 906 Certification of Chief Financial Officer of Tricell, Inc.
Pursuant to 18 U.S.C.ss.1350
* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by the Company.
18
EXHIBIT 21
List of Subsidiaries
1. Tricell UK Limited, a United Kingdom limited company.
2. Tricell Limited, a United Kingdom limited company.
3. Tricell Distribution, a United Kingdom limited company.
19
EXHIBIT 31(i)
CERTIFICATION
I, Andre Salt, Chief Executive Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Tricell, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
issuer as of, and for, the periods presented in this annual report;
4. The issuer's other certifying officer(s) and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
issuer and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to myself by others within those
entities, particularly during the period in which this annual report is
being prepared;
(b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designated under my
supervision, 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;
(c) evaluated the effectiveness of the issuer's disclosure controls and
procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the issuer's internal controls over
financial reporting that occurred during the issuer's most recent fiscal
year that has materially affected, or is reasonably likely to materially
effect, the issuer's internal controls over financial reporting; and
5. The issuer's other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors
(or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the issuer's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal control
over financial reporting.
Date: April 14, 2004
/s/ Andre Salt
- ------------------------------------
Andre Salt
Chief Executive Officer and Chairman
20
EXHIBIT 31(ii)
CERTIFICATION
I, Albert Amritanand, Chief Financial Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Tricell, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
issuer as of, and for, the periods presented in this annual report;
4. The issuer's other certifying officer(s) and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
issuer and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to myself by others within those
entities, particularly during the period in which this annual report is
being prepared;
(b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designated under my
supervision, 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;
(c) evaluated the effectiveness of the issuer's disclosure controls and
procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the issuer's internal controls over
financial reporting that occurred during the issuer's most recent fiscal
year that has materially affected, or is reasonably likely to materially
effect, the issuer's internal controls over financial reporting; and
5. The issuer's other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the issuer's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal control
over financial reporting.
Date: April 14, 2004
/s/ Albert Amritanand
- -----------------------
Albert Amritanand
Chief Financial Officer
21
EXHIBIT 32(i)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of Tricell, Inc. (the
"Company") for the period ended December 31, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned,
Andre Salt, the Chief Executive Officer of the Company, hereby certifies,
pursuant to 18 U.S.C. section 1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
Dated: April 14, 2004
/s/ Andre Salt
- -------------------------
Andre Salt
Chief Executive Officer
22
EXHIBIT 32(ii)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of Tricell, Inc. (the
"Company") for the period ended December 31, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned,
ALbert Amritanand, Chief Financial Officer of the Company, hereby certifies,
pursuant to 18 U.S.C. section 1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15
(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: April 14, 2004
/s/ Albert Amritanand
- -----------------------
Albert Amritanand
Chief Financial Officer
23