A.C. Simmonds and Sons Inc. 8-K/A

 

Exhibit 99.1

  

  

DIRECT REEFER SERVICES, INC.

 

December 31, 2013 and 2012 Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2013 and 2012

Statements of Operations for the years ended December 31, 2013 and 2012

Statement of Shareholder’s Deficit for the two years ended December 31, 2013 and 2012

Statements of Cash Flows for the years ended December 31, 2013 and 2012

Notes to Financial Statements

 

March 31, 2014 Interim Financial Statements (unaudited)

Condensed Balance Sheet at March 31, 2014 and December 31, 2013

Condensed Statement of Operations for the three months ended March 31, 2014

Condensed Statements of Cash Flows for the three months ended March 31, 2014

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Board of Directors

Direct Reefer Services, Inc.

 

We have audited the accompanying balance sheets of Direct Reefer Services, Inc. (the “Company”) as of December 31, 2013 and 2012, and the related statements of operations, shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2013. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on the consolidated financial statements based upon our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Direct Reefer Services, Inc. at December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the company will continue as a going concern. As discussed in the Note 1 to the accompanying financial statements, the Company has suffered recurring losses and negative cash flows from operations that raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ RBSM LLP

New York, New York

August 13, 2014

  

 

 

 

 

 

 

Direct Reefer Services Inc.

Balance Sheet

As at December 31, 2013

 

		2013				2012
ASSETS
Current Assets
Accounts receivable, net		$	179,186			$	278,316
Prepaid expenses and other current assets			15,000				15,000
Total Current Assets			194,186				293,316
Property and equipment, net			241,880				294,249
Total Assets		$	436,066			$	587,565
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Cash disbursed in excess of available balance		$	4,860			$	9,849
Accounts payable and accrued expenses			892,080				758,470
Current portion of long term debt - capital leases			54,342				89,216
Due to shareholder			194,508				78,022
Due to related party 1549037 Ontario Inc.			32,246
Total Current Liabilities			1,178,036				935,557
Non current liabilities
Capital Leases - long term			72,224				101,566
Total Liabilities			1,250,260				1,037,123
Commitments and contingencies			—				—
Stockholders' (deficit):
Common Stock			—
Authorised - unlimited
Issued 100 -  par value $1			100				100
Accumulated deficit			(814,294	)			(449,658	)
Total Stockholders' deficit			(814,194	)			(449,558	)
Total Liabilities and Stockholder Deficit		$	436,066			$	587,565

 

 

DIRECT REEFER SERVICES INC.

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013 AND 2012

 

		2013				2012
Revenue:
Sales		$	3,595,092			$	3,486,512
Cost of Sales			3,146,848				2,977,274
Gross Profit			448,244				509,238
Operating Expenses:
Advertising			13,268				1,079
Depreciation			77,369				111,213
General and administrative			642,419				571,652
Total operating expenses			733,056				683,944
Operating Loss			(284,812.0	)			(174,706.0	)
Other expenses:
Interest Expense			46,721				150,012
Loss on disposal of assets			33,103
Net loss		$	(364,636	)		$	(324,718	)
Net loss per common share- Basic and Diluted		$	(3,646	)		$	(3,247	)
Weighted average number of common shares outstanding - Basic and diluted			100				100

 

 

Direct Reefer Services, Inc

STATEMENT OF SHAREHOLDERS' DEFICIT

December 31, 2013

 

		Common Stock								Additional				Accumulated				Total Shareholder's
		Shares				Amount				Paid-in-Capital				Deficit				Deficit
Balance - December 31, 2011			100			$	100			$	—			$	(124,940	)		$	(124,840	)
Net loss for the year			—				—				—				(324,718	)			(324,718	)
Balance - December 31, 2012			100				100				—				(449,658	)			(449,558	)
Net loss for the year			—				—				—				(364,636	)			(364,636	)
Balance - December 31, 2013			100			$	100			$	—			$	(814,294	)		$	(814,194	)

 

 

Direct Reefer Services Inc.

Statement of Cash Flows

For the year ended December 31, 2013

 

		December 31, 2013				December 31, 2012
OPERATING ACTIVITIES
Net Loss		$	(364,636	)		$	(324,718	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation			77,369				111,213
Bad debt			18,750				—
Changes in operating assets and liabilities
Accounts Receivable			80,380				21,957
Deposits			—				(15,000	)
Due to related party			32,246				—
Accounts Payable			133,610				246,666
Net cash used in operating activities			(22,281	)			40,118
INVESTING ACTIVITIES
Net cash used in investing activities			(25,000	)			(142,448	)
FINANCING ACTIVITIES
Payment for capital lease			(64,216	)			95,671
Proceeds from related party			116,486				40,564
Net cash provided by financing activities			52,270				136,235
NET INCREASE IN CASH			4,989				33,905
CASH AT BEGINNING OF YEAR			(9,849	)			(42,177	)
CASH AT END OF YEAR			(4,860	)			(9,849	)
Supplementary disclosure of cash flow information:
Cash paid during the period for:
Interest		$	46,721			$	150,012
Income tax		$	0			$	0
Supplemental schedule of non-cash investing and financing activities:
Assets purchase on capital lease		$	25,000			$	105,000

 

 

 

DIRECT REEFER SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2013 And 2012

 

1.

Nature of operations

 

Direct Reefer Services Inc. (“the Company”, “we”, “us” or “our”) was incorporated under the Business Corporations Act in the province of Ontario, Canada on October 31, 2003. The Company is in frozen and dry food transportation business that provides transportation, distribution and logistical solutions to food companies.

 

The Company operates out of leased facilities in Mississauga, Ontario Canada and its clients are mostly in the frozen food business and many have been long standing customers who either do not have their own distribution system, or want deliveries to locations that their trucks do not service but are delivery points for others.

 

Frozen food deliveries require specialised trailers and the product is maintained in good condition by reefers attached to each trailer. These reefers need to be operational before and for the duration of the trip to maintain the integrity of the cargo. Deliveries are either based on skid lots (LTL) or full truck.

 

The Company focuses on providing the trailers for these deliveries and relies on owner operators to make the delivery.

 

2.

Significant accounting policies

 

Basis of presentation

 

The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.

 

The Company uses the accrual method of accounting and accrues for costs and expenses outstanding at the end of the accounting period.

In the opinion of management, all adjustments necessary to fairly present the results for the periods presented have been made. All adjustments made are of a normal and recurring nature and no non-recurring adjustments have been made in the presentation of these financial statements.

 

All amounts referred to in the notes to the financial statements are in United States Dollars ($) unless stated otherwise.

 

  

The Company records payables for services or materials received. Because of the nature of the business, the Company’s expenses consist mainly of payment to independent owner / operators for deliveries and fuel for maintaining tractors and trailers. Independent operators are responsible for their own fuel, maintenance, insurance etc. costs for their trucks as the company pays for services.

 

Cash and cash equivalents

 

For purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company maintains cash and cash equivalents with two financial institutions in the USA.

 

Concentration of Credit Risk

 

The Company’s financial instrument that is exposed to a concentration of credit risk is cash and accounts receivable. On occasion, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management. 

 

To mitigate its credit risk, the Company factors a number of accounts to a factoring who perform due diligence on the customers before advancing funds against. Typically they advance 90% of the receivable and send the balance, less charges (normally 2.5% per month) once they receive the full payment. In the event that an invoice becomes uncollectible, they charge the Company back for the amount outstanding. In the year 2013 the Company has had one significant chargeback of this nature in the amount of $18,500 which was written off as uncollectible after efforts at collection failed.

 

In the year 2013 the Company has 4 customers accounting for 46% of the business and all others are below 5% of its total sales. In the year 2012, the Company has 5 customers accounting for 53% of the business.

 

Lease

 

The Company records its leases on vehicles as capital leases and reflects the liability on its balance sheet.

 

Cost of Sales

 

The Company records all costs relating to the operation of its reefer trailers as cost of sales. This includes items such as drivers’ time sheets, trailer fuel costs, insurance, repairs and maintenance, lease expenses on trailers etc.

 

Going Concern

 

The accompanying financial statements have been prepared on a basis that assumes the Company will continue as a going concern.  As of December 31, 2013, the Company has a deficit of $814,294 applicable to the shareholder and has incurred significant operating losses and negative cash flows. For the year ended December 31, 2013, the Company sustained a net loss attributable to the Company of $364,636 compared to a net loss of $324,718 for the year ended December 31, 2012. The Company has negative working capital (current liabilities exceed current assets) of $983,850. The Company will need additional financing which may take the form of equity or debt.   In the event the Company is not able to increase its working capital, the Company will not be able to implement or may be required to delay all or part of its business plan, and their ability to attain profitable operations, generate positive cash flows from operating and investing activities and materially expand the business will be materially adversely affected. The accompanying consolidated financial statements do not include any adjustments relating to the classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the company be unable to continue in existence.

 

Revenue Recognition

The Company recognizes revenue on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured.  Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees. Revenue is generally recognized upon shipment.

 

In the event of an account becoming uncollectible, the company either accrues this as an allowance for doubtful accounts and charges it against income, or writes it off directly.

The Company recognizes revenue from customers once the delivery to their client has been successfully completed, a signed Bill of Lading has been received and collection is reasonably assured.

Property and Equipment

Property and Equipment are recorded at cost less accumulated amortization. Amortization is calculated annually at the following rates and methods over the established useful lives of the assets as follows:

Trailers	10% Straight Line
Trucks and Tractors	20% Straight Line
Warehouse equipment	10% Straight Line

The Company reviews for impairment of property and equipment whenever events or change in circumstances indicate that the carrying value may not be recoverable. If the total of the estimated undiscounted future cash flows is less than the carrying value of the assets, an impairment loss is recognized for the excess of the carrying value over the fair value of the assets during the year the impairment occurs.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that effect certain reported amount and disclosures in the financial statements.

Assumptions are based on a number of factors, including historical experience, current events and actions that the Company may undertake in the future, and other assumptions believed reasonable under the circumstances. These estimated are periodically reviewed and, accordingly, adjustments made to these estimates are taken into income in the year in which it is determined. These estimates are subject to measurement uncertainty, and actual results may therefore differ from those estimates. Estimates are used when accounting for certain items, such as useful lives of fixed assets, allowance for doubtful accounts, and provisions for slow-moving inventories and income tax.

Income Tax

The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. 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.  Deferred tax assets are recognized, net of a valuation allowance, for the estimated future tax effects of deductible temporary differences and tax credit carry-forwards.  A valuation allowance against deferred tax assets is recorded when, and if, based upon available evidence, it is more likely than not that some or all deferred tax assets will not be realized.

 

There are no unrecognized tax benefits at December 31, 2013 and 2012. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There are no accrued interests or penalties associated with any unrecognized tax benefits, nor were any interest expense recognized during the year. The Company has determined it has no uncertain tax positions at December 31, 2013. Currently, the Company’s federal and provincial income tax returns for the years 2009-2012 remain open to inspection by the IRS and various state taxing authorities. The Company believes that it has appropriate support for income tax positions taken in its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter.

 

Due to its adverse operating results, the Company has had net operating loss carry forwards for income tax purposes as follows for the years ended December 31:

 

2009	$	103,813
2010		16,265
2011		39,545
2012		178,790

 

Based on the current year’s results, the Company expects to have an additional loss carry forward for 2013.

 

Fuel Availability and Cost

The motor carrier industry is dependent upon the availability of fuel and this is the same for our business as our reefer trailers consume a significant amount of fuel.  Fuel shortages or increases in fuel taxes or fuel costs have adversely affected our profitability and will continue to do so.  Fuel prices have fluctuated widely, and fuel prices and fuel taxes have generally increased in recent years.  We have not experienced difficulty in maintaining necessary fuel supplies, and in the past we generally have been able to partially offset increases in fuel costs and fuel taxes through increased freight rates and through a fuel surcharge that increases incrementally as the price of fuel increases above an agreed upon baseline price per gallon.  

At December 31, 2013, we did not have any long-term fuel purchase contracts, and we have not entered into any other hedging arrangements that protect us against fuel price increases. However, the company is constantly seeking out the most competitive suppliers to maintain a manageable cost base.

 

Customers

The Company has maintained a customer base consisting of customers in various sectors of the frozen food business.

The table below shows the revenue attributable to our top 10 customers for the period shown:

 

		2013				2012
Top 10 customers			74	%			73	%
Top 5 customers			53	%			53	%
Largest Customer			12	%			13	%

 

Suppliers

The most significant component of our purchases is driver services and fuel.

The table below shows the revenue attributable to our top 10 suppliers for the period shown:

 

		2013				2012
Top 10 suppliers			70	%			66	%
Top 5 suppliers			58	%			52	%
Largest Supplier (related party)			31	%			24	%
Largest non-related supplier			8	%			9	%

Liability for Cargo

The Company is responsible for product picked up from various locations from the point of pick up to final destination. The Company has insurance coverage for loss of product resulting from accident or equipment malfunction and damages. The Company has experienced some occasions where product was damaged in-transit or arrived at the customer’s location either damaged or short. Drivers are responsible for any shortages, and damages are either charged back to the pick-up location or absorbed by the company. The losses in this regard has been minimal.

Fair Value of Financial Instruments

The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 

The carrying amounts reported in the balance sheets for loans payable, accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

 

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Financial assets measured at amortized cost include accounts receivable, and HST recoverable. Financial liabilities measured at amortized cost include accounts payable.

Segment Information

 

Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

 

Related Parties

 

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company shall disclose all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

 

Reclassifications

Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results.

Recent Accounting Pronouncements

 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

3.

Property and Equipment

Property and equipment consists of the following at December 31, 2013 and 2012.

		December 31				December 31
		2013				2012
Assets
Cost
Warehouse Equipment		$	50,750			$	50,750
Trailers			683,500				658,500
Trucks and Tractors			336,263				336,263
Total			1,070,513				1,045,513
Accumulated Depreciation and Amortization			828,633				751,264
Net Book Value		$	241,880			$	294,249

 

The aggregate depreciation charge to operations was $77,369 and $111,213 for the years ended December 31, 2013 and 2012 respectively. The depreciation policies followed by the company are described in Note 2. During the year ended December 31, 2013, the Company charged to operations $33,103  as loss on disposal of assets. These represented old and non performing equipment that were mostly cannibalized for parts.

 

4.

Long Term Debt - Capital Leases

  

The Company had several capital lease obligations. Property under those capital lease obligations (included in property, plant and equipment) at December 31, 2013 and 2012 consist of the following:

 

Capital Lease Property		2013				2012
Machinery & equipment		$	548,263			$	523,263
Less: Accumulated depreciation			(380,793	)			(343,874	)
Net capital lease property		$	167,470			$	179,389

 

Depreciation and amortization expense of leased property under capital lease obligations amounted to $36,919, and $57,734 for the year ended December 31, 2013 and 2012, respectively.

 

The Company acquires its equipment under leases with a bargain purchase option at the end of the lease period. The Company treats these leases as capital leases

 

		December 31,				December 31,
		2013				2012
The Company’s obligations under these leases are:		$	126,566			$	190,782
Less current portion			54,342				89,216
		$	72,224			$	101,566
Capital Lease payments			December 31
			2014				60,384
			2015				33,312
			2016				26,329
			2017				18,409
			Less interest				(11,867	)
						$	126,566

 

 

5.

Share Capital

 

	December 31,				December 31,
	2013				2012
Issued
100 common shares, par value $1	$	100			$	100

 

 

6.

Related Party Transactions

 

		December 31				December 31
		2013				2012
Italo Countre is a related party to the Company. He is the brother of Sam Sinisi and provides services to the Company in the form of drivers and trucks who make deliveries on behalf of the Company’s customers to their clients.  Pricing of these services is based on market rates consistent with the rates paid to other independent drivers used by the Company.  The value of services provided by Italo’s Companies were:		$	500,080			$	717,146
This represents billings made by Italo’s Companies for drivers’ charges on deliveries made on DRS’ behalf.
As a percentage of total purchases by the Company			31	%			24	%
The net amount owing to Italo and his companies were:		$	388,773			$	510,694
These amounts were included in Accounts Payable at year end.
As a percentage of Accounts Payable, this represents			43	%			65	%
In addition, Italo paid for certain expenses on behalf of the Company which he is reimbursed for. At the end of the year, the Company owed him an amount which is reflected as
Due to related parties 1540937 Ontario Inc.		$	32,246			$	—
Due to the Company’s precarious cash position, Sam Sinisi, had to inject funds either from personal savings, credit cards or loans from acquaintances to meet cash requirements and these are recorded as due to shareholder. This loan is interest free and unsecured.
The amounts owing at the end of the year is as follows:		$	194,508			$	78,022

 

7.

Commitments and Contingencies

 

The Company has no outstanding employment contracts or agreements with any officer or individual and has not entered into any contracts or agreements with others including supply of services or purchase of goods and services.

 

Litigation

 

The company does not have any outstanding legal obligation or litigation that it is aware of at this time. 

 

8.

Financial Instruments

 

Financial instruments consist of recorded amounts of accounts receivable which will result in future cash receipts, as well as bank notes payable, accounts payable and long term debt which will result in future cash outlays.

 

The Company is exposed to the following risks in respect of certain of the financial instruments held.

 

Fair Value

 

Accounting principles generally accepted in the United States of America requires that the Company disclose information about the fair value of its financial assets and liabilities unless it is not practicable within the constraint of timelines or cost to determine the fair value of the financial assets and liabilities with sufficient reliability. All financial assets and liabilities are stated at cost which approximates fair market value.

 

 

Credit risk

 

The Company is subject to risk on non-payment of accounts receivable. However, the Company has a number of customers which minimizes the concentration of credit risk. The Company believes that there is minimal risk associated with the collection of these amounts.

 

Interest rates risk

 

The Company negotiates the interest rate on its leases at the time of acquisition of the equipment and this rate is locked in for the duration of the lease.

 

Currency risk

 

The Company has no currency risk exposure as all of its transactions are conducted in Canadian currency. 

 

9.

Subsequent events

 

On May 20, 2014, BLVD Holdings, Inc. (BLVD) entered into a share purchase agreement with the sole shareholders of the Company to purchase one hundred percent (100%) of the outstanding shares of the common stock of the Company in consideration for a total of:

 

72,000 shares of BLVD’s Series A-2 6% 2014 Convertible Redeemable Preferred Stock, par value $0.001 per share. The Series A-2 6% Preferred Stock has a stated value of $10.00 per share and is convertible into BLVD’s common stock at a conversion value of $10.00 per share. The Series A-2 Preferred Stock has a 6% dividend paid annually in arrears on a non- cumulative basis.

 

 

DIRECT REEFER SERVICES INC.

Balance Sheet

			March 31,				December 31,
			2014				2013
ASSETS
Current Assets
Cash and cash equivalents		$	—			$	—
Accounts Receivable			160,542				179,186
Inventories			—
Prepaid expenses and other current assets			15,000				15,000
Total Current Assets			175,542				194,186
Property and equipment, net			227,117				241,880
Goodwill and intangible assets, net			—				—
Other non current assets			—				—
		$	402,659			$	436,066
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Cash disbursed in excess of available balance		$	11,106			$	4,860
Bank Indebtedness			—
Accounts Payable			916,215				892,080
Current portion of long term debt - leases			40,756				54,342
Due to shareholder			210,961				194,508
Due to related party 1549037 Ontario Inc.			32,246				32,246
Total Current Liabilities			1,211,284				1,178,036
Non current liabilities - Capital Leases			72,224				72,224
Stockholders' deficit:
Preferred stock			—
Common stock par value $1			100				100
Additional paid-in capital			—
Accumulated deficit			(880,949	)			(814,294	)
Other Comprehensive Income			—
Total Stockholders' deficiency			(880,849	)			(814,194	)
		$	402,659			$	436,066

 

 

DIRECT REEFER SERVICES INC.

STATEMENT OF OPERATIONS

FOR THE PERIOD JANUARY 1 TO MARCH 31, 2014

 

		2014
Sales		$	740,865
Cost of Sales		$	673,566
Gross Profit		$	67,299
Operating Expenses		$	119,248
Loss from operations		$	(51,949	)
Interest Expense		$	13,906
Loss after interest expense		$	(65,855	)
Loss on disposal of assets		$	—
Net loss		$	(65,855	)

 

 

DIRECT REEFER SERVICES INC.

Statement of Cash Flows

For the 3 months ended March 31, 2014

 

		March 31
		2014
OPERATING ACTIVITIES
Net Loss		$	(65,855	)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation			14,763
Loss on disposal of fixed assets			—
Changes in operating assets and liabiities
Accounts Receivable			18,644
Prepaid expenses			—
Other assets			—
Accounts Payable			24,135
Net cash used in operating activities			(8,313	)
Increase in loan from related parties			16,453
INVESTING ACTIVITIES
Net cash used in investing activities			—
FINANCING ACTIVITIES
Net cash provided by financing activities			(14,386	)
NET INCREASE (DECREASE) IN CASH			(6,246	)
(increase in long term debt)
CASH AT BEGINNING OF PERIOD			(4,860	)
CASH AT END OF PERIOD		$	(11,106	)