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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
10-K
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A
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Amendment
No. 2
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[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For
the fiscal year ended June 30, 2011
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[ ] TRANSITION REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the transition period from ________ to ________
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Commission
fle number 000-05391
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METWOOD,
INC.
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(Name
of small business issuer in its charter)
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NEVADA
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83-0210365
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(State
or other jurisdiction
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(IRS
Employer
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of
incorporation or organization)
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Identification
No.)
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819
Naff Road, Boones Mill, VA 24065
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(Address
of principal executive offices)
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(540)
334-4294
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(Issuer's
telephone number)
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Securities
registered under Section 12(b) of the Exchange Act:
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None
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Securities
registered under Section 12(g) of the Exchange Act:
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$0.001
Par Value Common Voting Stock
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(Title
of Class)
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.
Yes
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No
S
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Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
the
Act. Yes
£
No
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Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days Yes
S
No
£
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is
not contained herein, 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
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Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):
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Large
accelerated filer
£
Accelerated filer
£
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Non-accelerated
filer
£
(Do not check if a smaller reporting
company) Smaller reporting company
S
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes
£
No
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As
of December 31, 2010, the aggregate market value of the 12,231,797 common shares outstanding (based upon the average of the
bid price ($.15) reported on the OTCQB Market) held by non-affiliates was $1,834,770
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As
of September 13, 2011, the number of shares outstanding of the registrant's common stock, $0.001 par value(the only class
of voting stock), was 12,231,797 shares
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METWOOD,
INC. AND SUBSIDIARY
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FORM 10-K
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TABLE OF CONTENTS
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Page
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PART I
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Item 1
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Description of Business
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1
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Item 1A
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Risk Factors
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5
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Item 2
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Properties
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6
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Item 3
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Legal Proceedings
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6
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Item 4
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Submission of Matters to a Vote of Security Holders
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6
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PART II
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Item 5
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Market for Registrant's Common Equity, Related Stockholder
Matters
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6
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and Issuer Purchases of Equity
Securities
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Item 7
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Management's Discussion and Analysis or Plan of Operation
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7
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Item 8
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Financial Statements and Supplementary Data
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10
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Item 9
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Changes in and Disagreements with Accountants on Accounting
and
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24
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Financial Disclosure
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Item 9A
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Controls and Procedures
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24
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Item 9B
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Other Information
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24
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PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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25
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Item 11
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Executive Compensation
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27
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Item 12
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Security Ownership of Certain Beneficial Owners and
Management
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28
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and Related Stockholder Matters
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Item 13
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Certain Relationships and
Related Transactions, and Director Independence
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29
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Item 14
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Principal Accounting Fees and Services
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29
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PART IV
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Item 15
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Exhibits and Financial Statement Schedules
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30
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Signatures
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31
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EXPLANATORY
NOTE
This
Annual Report on Form 10-K/A is being filed as Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended June
30, 2011. The Form 10-K was originally filed with the Securities and Exchange Commission on September 14, 2011.
We
are amending original
Form 10-K
to include the revised languages in the
controls
and procedures section of the report.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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This
Annual Report on Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies
or synergies, competitive positions, growth opportunities for existing products, and plans and objectives of management.
Statements that are not historical in nature and which include such words as "anticipate," "estimate,"
"should," "expect," believe," "intend," and similar expressions are intended to identify
forward-looking statements for the purpose of the safe harbor provided by Section 21E of the Exchange Act and Section 27A
of the Securities Act
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PART
I
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Item
1. Description of Business
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Business
Development
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The
company was incorporated under the laws of the State of Wyoming on June 19, 1969. Following an involuntary dissolution
for failure to file an annual report, the company was reinstated as a Wyoming corporation on October 14, 1999. On January
28, 2000, the company, through a majority shareholder vote, changed its domicile to Nevada through a merger with EMC Energies,
Inc., a Nevada corporation. The Plan of Merger provided for the dissenting shareholders to be paid the amount, if any,
to which they would be entitled under the Wyoming Corporation Statutes with respect to the rights of dissenting shareholders.
The company also changed its par value to $.001 and the amount of authorized common stock to 100,000,000 shares
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Prior
to 1990, the company was engaged in the business of exploring for and producing oil and gas in the Rocky Mountain and mid-continental
areas of the United States. The company liquidated substantially all of its assets in 1990 and was dormant until June
30, 2000, when it acquired, in a stock-for-stock, tax-free exchange, all of the outstanding common stock of a privately held
Virginia corporation, Metwood, Inc. ("Metwood"), which was incorporated in 1993. See Form 8-K and attached
exhibits filed August 11, 2000. Metwood has been in the metal and metal/wood construction materials manufacturing business
since 1992. Following the acquisition, the company approved a name change from EMC Energies, Inc. to Metwood, Inc.
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Effective
January 1, 2002, Metwood acquired certain assets of Providence Engineering, PC ("Providence"), a professional engineering
firm with customers in the same proximity as Metwood, paying $60,000 in cash and issuing 290,000 Metwood common shares to
the two Providence shareholders (one of whom was also an officer and existing shareholder of Metwood prior to the acquisition).
These shares were valued at the closing quoted stock price of $1.00 per share at the effective date of the purchase.
On October 15, 2002, $15,000 additional cash was paid to one shareholder in exchange for the shareholder's surrender of 15,000
shares of Metwood stock, and $50,000 was paid to that shareholder in two installments of $25,000 each (on January 15 and April
15, 2004) for 275,000 shares. All of the originally issued 290,000 shares of Metwood stock were thus repurchased.
The initial purchase transaction was accounted for under the purchase method of accounting
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The consolidated company
("the Company," "We," "Us," "Our") provides construction-related products and engineering
services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in
southwestern Virginia
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Principal
Products or Services and Markets
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Metwood
- Residential builders are aware of the superiority of steel framing vs. wood framing, insofar as steel framing is lighter;
stronger; termite, pest, rot and fire resistant; and dimensionally more stable in withstanding induced loads. Although
use of steel framing in residential construction has generally increased each year since 1980, many residential builders have
been hesitant to utilize steel due to the need to retrain framers and subcontractors who are accustomed to a "stick-built"
construction method where components are laid out and assembled with nails and screws. The Company's founders, Robert
Callahan and Ronald Shiflett, saw the need to combine the strength and durability of steel with the convenience and familiarity
of wood and wood fasteners
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Our primary products and services are:
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· Girders and headers
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· Square structural columns
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· Floor joists
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· Garage, deck and porch concrete pourover systems
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· Floor joist reinforcers
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· Garage and post-and-beam buildings
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· Roof and floor trusses
and rafters
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· Engineering, design and custom building services
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· Metal framing
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Metwood manufactures light-gage
steel construction materials, usually combined with wood or wood fasteners, for use in residential and commercial applications
in place of more conventional wood products, which are inferior in terms of strength and durability. The steel and steel/wood
products allow structures to be built with increased load strength and structural integrity and fewer support beams or support
configurations, thereby allowing for structural designs that are not possible with wood-only products
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Providence
- Extensively involved in ongoing product research and development for Metwood, Providence also offers its customers civil
engineering capabilities which include rezoning and special use submissions; erosion and sediment control and storm-water
management design; residential, commercial, and religious facility site development design; and utility design, including
water, sewer and onsite treatment systems. Providence's staff is familiar with construction practices and has been actively
involved in construction administration and inspection on multiple projects.
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Providence also performs
a variety of structural design and analysis work, successfully providing solutions for many projects, including retaining
walls, residential framing, commercial building framing, light-gage steel fabrication drawings, metal building retrofits and
additions, mezzanines, and seismic anchors and restraints
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Providence has designed
numerous foundations for a variety of structures. Its foundation design expertise includes metal building foundations,
traditional building construction foundations, atypical foundations for residential structures, tower foundations, and sign
foundations for a variety of uses and applications
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Providence
has also designed and drafted full building plans for several applications. When subcontracting with local professional
firms, Providence has the ability to provide basic architectural, mechanical, electrical, and detailed civil and structural
design services for these facilities
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Providence
has reviewed designs by manufacturers for a variety of structures and structural components, including retaining walls, radio
towers, tower foundations, sign foundations, timber trusses, light-gage steel trusses, and light-gage steel beams. This
service enables clients to take generic designs and have them certified and approved for construction in the desired locality
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Distribution
Methods of Products and Services
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Our
sales are primarily wholesale, directly to lumberyards, home improvement stores, hardware stores, and plumbing and electrical
suppliers in Virginia and North Carolina. Metwood relies primarily on its own sales force to generate sales; additionally,
however, the Company has distributors in Virginia, New York, Oklahoma, Arizona and Colorado and also utilizes the salespeople
of wholesale yards stocking the Company's products as an additional sales force. We are an authorized vendor for Lowe's,
Home Depot, 84 Lumber, Stock Building Supply, ProBuild, and many more. We have several stocking dealers of our square
columns and reinforcing products. We will sell directly to contractors in areas where we do not have a dealer, but with
our national dealer relationships, we typically have a dealer to use. Metwood intends to continue
expanding the wholesale marketing of its unique products to retailers, to increase dealer sales, and to license the
Company's technology and products to increase its distribution outside of Virginia, North Carolina and the South
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Status
of Publicly Announced New Products or Services
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The
Company acquired four new patents through assignment from Robert Callahan and Ronald Shiflett, the patent holders. All
four patents reflect various modifications to our Joist Reinforcing Bracket which will make it even easier for tradesmen to
insert utility conduits through wood joists. In
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October
2010, Metwood signed a letter of intent with Nuconsteel ("Nucon"), a Nucor company, to team with Nucon to increase
our sales of the TUFFBEAM, TUFFJOIST, and RIMBEAM ("products"). We will provide, among other things, an unrestricted,
exclusive license (except for defined Metwood territory) to Nucon to sell and manufacture all current and future products.
Nucon will pay us a royalty for all products manufactured by Nucon and their sub-licensees and will sell us Nucon's complete
line of NUJOIST product at the most favorable pricing. Nucon will also integrate Metwood into the Nucon Fabrication
Network. Nucon will provide us with certain equipment in exchange for the exclusive rights granted in the agreement.
The agreement will be in effect for two years with renewals for additional periods of one year
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Seasonality
of Market
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Our
sales are subject to seasonal impacts, as our products are used in residential and commercial construction projects which
tend to be at peak levels in Virginia and North Carolina between the months of March and October. Accordingly, our sales
are greater in our fourth and first fiscal quarters. We build an inventory of our products throughout the winter and
spring to support our sales season. Due to the seasonality of our local market, we are continuing our efforts to expand
into markets that are not so seasonally impacted. We have shipped projects to Florida, Georgia, South Carolina, Arizona,
Washington, and more. These markets have some seasonality, but increased exposure in these markets wil help maintain
stronger sales year round
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Competition
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Nationally,
there are over one hundred manufacturers of the types of products produced by the Company. However, the majority of
these manufacturers are using wood-only products or products without metal reinforcement. Metwood has identified only
one other manufacturer in the United States that manufactures a wood-metal floor truss similar to ours. However, we
have often found that our products are the only ones that will work within many customers' design specs.
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Sources
and Availability of Raw Materials and the Names of Principal Suppliers
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All
of the raw materials we use are readily available on the market from numerous suppliers. The light-gage metal used by
the Company is supplied primarily by Dietrich Industries, Nuconsteel, Clark Western, and Wheeling Corrugating. Our main
source of lumber is BlueLinx. Nucor and Gerdau Amersteel provide the majority of our rebar. Because of the number
of suppliers available to us, our decisions in purchasing materials are dictated primarily by price and secondarily by availability.
We do not anticipate a lack of supply to affect our production; however, a shortage might cause us to pass on higher materials
prices to our buyers
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Dependence
on One or a Few Major Customers
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For
the fiscal years ending June 30, 2011 and 2010, no customer accounted for 10% or more of total sales.
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Patents
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The
Company has nine U.S. Patents:
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U.S. Patent Nos. 5,519,977 and 7,347,031, "Joist Reinforcing Bracket," a bracket that reinforces wooden joists with
a hole for the passage of a utility conduit. The Company refers to this as its floor joist patch kit
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U.S. Patent No. 5,625,997, "Composite Beam," a composite beam that includes an elongated metal shell and a pierceable
insert for receiving nails, screws or other penetrating fasteners
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U.S. Patent No. 5,832,691, a continuation in part of U.S. Patent No. 5,625,997, "Composite Beam," a composite beam
that includes an elongated metal shell and a pierceable insert for receiving nails, screws or other penetrating fasteners
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U.S. Patent No. 5,921,053, "Internally Reinforced Girder with Pierceable Nonmetal Components," a girder that includes
a pair of "c"-shaped members secured together so as to form a hollow box which permits the girder to be secured
within a building structure with conventional fasteners such as nails, screws and staples
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U.S. Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications of Metwood's Joist Reinforcing Bracket,
which will be used for repairs of wood I-joists
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Each
of the above-mentioned patents was originally issued to the inventors and Company founders, Robert Callahan and Ronald B.
Shiflett, who licensed these patents to us
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Need
for Government Approval of Principal Products
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Our
products must either be sold with an engineer's seal or applicable building code approval. The Company's chief engineer
has obtained professional licensure in several states, which permits products not building code approved to be sold and used
with his seal. We expect his licensure in a growing number of states to greatly assist in the uniform acceptability
of our products as we expand to new markets. Currently, we are seeking International Code Council ("ICC") code approval
on our joist reinforcers and beams. Once that approval is obtained, our products can be used in all fifty states and
will eliminate the need for an engineer's seal on individual products. To date, the Company's 2x10 floor joist reinforcer
has received both Bureau Officials Code Association approval (2001) and ICC approval (2004).
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Time
Spent During the Last Two Fiscal Years on Research and Development Activities
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Approximately
fifteen percent of our time and resources have been spent during the last two fiscal years researching and developing our
metal/wood products, new product lines, and new patents
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Costs
and Effects of Compliance with Environmental Laws
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We
do not incur any costs to comply with environmental laws. We are an environmentally friendly business in that our products
are fabricated from recycled steel
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Number
of Total Employees and Number of Full-Time Employees
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We
had eighteen employees at June 30, 2011, all of whom were full time
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Item
1A. Risk Factors
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Our
business is subject to various risks, including those described below. You should carefully consider the following risk
factors and all other information contained in this Form 10-K. If any of the following events or outcomes actually occurs,
our business, operating results, and financial conditions would likely suffer
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Changing
economic conditions could materially adversely affect us - Our operations and performance depend significantly on regional
and national economic conditions and their impact on levels of spending by our customers and end users. Currently, those
economic conditions have deteriorated and may remain depressed for the foreseeable future. These changing economic conditions
could have a material adverse effect on demand for our products and on our financial condition and operating results
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Current
volatility and disruption in the capital and credit markets may continue to exert downward pressure on our stock price - The
capital and credit markets have been experiencing extreme volatility and disruption over the past year. Stock markets
in general, and our stock price in particular, have experienced significant volatility over the past year. Our stock
recently traded at historic lows. In the future, there can be no assurance that price volatility in the stock markets
in general will abate or that our stock price in particular will rise. Additionally, the volatility in the credit markets
could impact our ability to access new financing
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We
have a history of operating losses and may incur future losses. We incurred a net loss of $86,262 for the fiscal year
ended June 30, 2011 and $196,085 for the year ended June 30, 2010. Our ability to generate significant revenues and
maintain profitability is dependent in large part on our ability to expand our customer base; increase sales of our products
to existing customers; manage our expense growth; enter into additional supply, license and collaborative arrangements; and
successfully manufacture and commercialize products incorporating our technologies in new applications and in new markets
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Item
2. Properties
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During
the year ended June 30, 2005, we sold our facilities to a related party for $600,000 and subsequently leased the facilities
back under a long-term lease agreement. We now lease our facilities in Boones Mill, Virginia, which consist of corporate
offices, warehouses, a garage/vehicle maintenance building, and other multi-use buildings. The condition of these buildings
is very good
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We
do not invest in real estate or interests in real estate, real estate mortgages or securities of or interests in persons primarily
engaged in real estate activities and therefore have no policies related to such investments
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Item
3. Legal Proceedings
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We
are currently the complainant in two legal proceedings seeking to recover unpaid amounts from customers. We are not
a party to any other legal proceedings, nor, to the best of our knowledge, are any such proceedings threatened or contemplated
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Item
4. Submission of Matters to a Vote of Security Holders
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No
matter was submitted to a vote during the year
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PART
II
Item
5.
Market
for
Common
Equity
and
Related
Stockholder
Matters
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Because there is no active trading market for Metwood,
Inc. common stock, it is difficult to determine the market value of the stock. Based on the best bid price for our common
stock at July 21, 2011 of $.22 per share (best ask price of $.43), the market value of shares held by non-affiliates would be
$2,690,995. There are no preferred shares authorized
Our common
stock is currently listed on the OTCQB Market, the middle tier of the OTC marketplace, under the symbol "MTWD.OB."
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The following
table sets forth high and low bid information for each full quarterly period within the two most recent fiscal years.
These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not necessarily represent actual transactions
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Year
Ended June 30, 2011
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High
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Bid
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First Quarter
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$0.25
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$0.13
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Second Quarter
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$0.55
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$0.11
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Third Quarter
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$0.43
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$0.18
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Fourth Quarter
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$0.43
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$0.21
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Year
Ended June 30, 2010
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First Quarter
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$1.80
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$0.05
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Second Quarter
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$0.10
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$0.07
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Third Quarter
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$0.26
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$0.10
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Fourth Quarter
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$0.25
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$0.03
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Holders
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The approximate
number of holders of record of our common stock as of September 13, 2011 was 1,114. This number does not include an
indeterminate number of stockholders whose shares are held by brokers in street name. The number of stockholders has
been substantially the same during the past ten years
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Dividends
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Per the
negative covenants in our line-of-credit agreement, we are restricted from paying dividends when any debt remains outstanding
on the lines. We have not paid any dividends on our common stock and do not intend to pay dividends in the foreseeable
future
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Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operation
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Financial
Condition
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We anticipate
that the next twelve months will be a period of continued growth as we seek to further expand our presence in new markets
throughout the United States through increased numbers of distributors, licensees and dealers. ICC code approval is
being sought for the Company's joist reinforcers and beams and is expected to be obtained within the coming fiscal year.
If this approval is obtained, product marketability would be greatly enhanced and would likely lead to higher demand.
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Higher
product demand would likely increase the need for more capital as inventory requirements grew, which could be met through
borrowing or a stock offering. No decision has been made at the present time, however, as to which means might be used
to raise capital
|
Results
of Operations
|
|
|
|
|
|
|
|
|
Below are selected financial data for the years ended
June 30, 2011 and 2010:
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
Revenues
|
|
$
|
2,212,757
|
|
|
$
|
2,209,942
|
|
Net loss
|
|
$
|
(86,262
|
)
|
|
$
|
(196,085
|
)
|
Net loss per common share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
Weighted average common
|
|
|
|
|
|
|
|
|
shares outstanding
|
|
|
12,231,797
|
|
|
|
12,231,797
|
|
At
June 30, 2011 and 2010:
|
|
|
|
|
|
Total assets
|
|
$
|
2,185,815
|
|
|
$
|
2,406,203
|
|
Working capital
|
|
$
|
1,250,111
|
|
|
$
|
1,589,855
|
|
Shareholders' equity
|
|
$
|
1,907,084
|
|
|
$
|
1,993,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No dividends have been declared or paid during the
periods presented
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
and Cost of Sales - Consolidated gross sales increased slightly ($2,815, or less than 1%) for the year ended June 30, 2011
("fiscal 2011") compared to the year ended June 30, 2010 ("fiscal 2010"). Construction sales consisted
of product sales, engineering, delivery and installation fees and increased $14,224 (1%) comparing fiscal 2011 to 2010.
Engineering sales consisted of fees for engineering services and declined $11,409 (6%) comparing fiscal 2011 to 2010.
Gross profit increased $41,531 (5%) from fiscal 2010 to fiscal
2011
|
The slight sales increase for
fiscal 2011 versus 2010 continues to reflect an ongoing general downtown in the building industry. Although we have sold product
in over twenty-five states, our local market is down more than 50%. Now the commercial market is not overcoming some of the residential
downturn. The potential for increased sales volume as the Company goes forward is enhanced by the fact that we now have two NUFRAME
and one NUTRUSS 2.0 machines and that we are an authorized fabricator for the NUTRUSS light-gage steel truss system, begun in
March 2010.
Cost of sales decreased $38,716
overall (3%) in fiscal 2011 compared to fiscal 2010. On the construction side, cost of sales decreased $46,448 (4%), while
cost of engineering sales increased $7,732 (5%). The change in construction and engineering costs was proportional to the
change in sales for the same period
Administrative expenses
- These costs decreased $117,297, or 10%, to $1,040,238 in fiscal 2011 from $1,157,535 in fiscal 2010. The decrease resulted
from lower costs in nearly every category reported, notably payroll, insurance and travel expenses. We are invested in decreasing
expenditures where possible in order to maximize our net earnings.
Other
Income - Other income in fiscal 2011 was13,135 (47%) lower than fiscal 2010. The decrease resulted primarily from lower
customer finance charges
|
|
|
|
|
|
|
|
|
Income
Taxes - In fiscal 2011 we recorded an income tax benefit of $54,145 compared to a tax benefit of $90,015 in fiscal 2010.
An income tax benefit was recognized in both fiscal years because, in addition to the book loss experienced, temporary ("timing")
differences between book and tax income gave rise to a higher tax loss, which will be carried forward and offset future taxable
income. A deferred tax asset has been recorded to reflect the potential future benefit of such a carryforward.
Since the realization of such an asset is uncertain, we have also recorded a valuation allowance to reduce this asset to its
net realizable value. We decreased our deferred tax liability by $33,558 in 2011 due to a turnaround of deferred taxes
previously recorded. The primary components of the deferred tax liability relate to timing differences between book
and tax depreciation and the treatment of goodwill amortization.
|
|
|
|
|
|
|
|
|
Liquidity
and Capital Reserves - Cash flows provided by operating activies in fiscal 2011 were $47,395 versus net cash used for operating
activities of $73,541 in fiscal 2010, a change of $120,936. The increase in cash flows from operations was primarily
attributable to decreases in inventory and an increase in depreciation and refundable income taxes. We also used approximately
$271,000 for capital improvements and purchases of fixed assets. Financing activities in fiscal 2011 used $8,197 compared
to $175,027 provided in fiscal 2010. The main use of funds in 2011 was from amounts repaid to a related party, while
funds provided in 2010 in financing activities were from amounts loaned to us from a related party
|
|
|
|
|
|
|
|
|
We have historically funded
our cash needs through operating income and credit line draws as needed. We will continue to rely on sales revenue as
our main source of liquidity and will incur debt primarily to fund inventory purchases as sales growth produces increased
product demand. Liquidity needs that cannot be met by current sales revenue may also arise in certain unusual circumstances
such as has previously occurred when rain and snow significantly slowed construction activity and resulted in a corresponding
decline in demand for our products. In those circumstances, debt may be added to meet our fixed costs and to maintain
inventory in anticipation of a spurt in product demand that generally occurs once a weather-related slowdown has ended
|
|
|
|
|
|
|
|
|
On a long-term basis, we
also anticipate that product demand will increase considerably as we continue to expand our marketing and advertising campaign,
which may include the use of television, radio, print and internet advertising. Efforts are well underway to increase
the number of out-of-state sales representatives/brokers who will market our products throughout the country. As sales
increase, we can add a second shift to meet the additional product demand without having to use funds to expand our production
facilities. If additional cash becomes necessary to fund our growth, we may raise this capital through an additional
follow-on stock offering rather than taking on more debt. However, there can be no assurance that we will be able to
obtain additional equity or debt financing in the future. If we are unable to raise additional capital as needed, our
growth potential will be adversely affected, and we would have to significantly modify our plans
|
Item
8. Financial Statements and Supplementary Data
|
|
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
|
|
To
the Board of Directors of
|
Metwood,
Inc.
|
|
|
We
have audited the accompanying consolidated balance sheets of Metwood, Inc. (a Nevada corporation) and subsidiary as of June
30, 2011 and 2010, and the related consolidated statements of income, stockholders' equity, and cash flows for the years then
ended. 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 of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the 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 Metwood, Inc. and subsidiary as of June 30, 2011 and 2010, and the results of their operations and their cash
flows for the years then ended in conformity with accounting principles generally accepted in the United States of America
|
|
|
/s/
Bongiovanni & Associates, CPAs
|
Bongiovanni
& Associates, CPAs
|
Cornelius, North
Carolina
|
|
September
13, 2011
|
METWOOD, INC. AND SUBSIDIARY
|
CONSOLIDATED BALANCE SHEETS
|
JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
2011
|
|
2010
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
180,448
|
|
|
$
|
403,512
|
|
Accounts receivable, net
|
|
|
240,581
|
|
|
|
297,828
|
|
Inventory
|
|
|
855,864
|
|
|
|
938,878
|
|
Recoverable income taxes
|
|
|
42,606
|
|
|
|
84,383
|
|
Other current assets
|
|
|
47,872
|
|
|
|
53,329
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,367,371
|
|
|
|
1,777,930
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment
|
|
|
|
|
|
|
|
|
Leasehold improvements
|
|
|
259,490
|
|
|
|
168,338
|
|
Furniture, fixtures and equipment
|
|
|
98,458
|
|
|
|
97,766
|
|
Computer hardware, software and peripherals
|
|
|
159,261
|
|
|
|
155,924
|
|
Machinery and shop equipment
|
|
|
457,688
|
|
|
|
356,166
|
|
Vehicles
|
|
|
420,533
|
|
|
|
380,834
|
|
Land improvements
|
|
|
67,959
|
|
|
|
42,099
|
|
|
|
|
1,463,389
|
|
|
|
1,201,127
|
|
Less accumulated
depreciation
|
|
|
(935,093
|
)
|
|
|
(825,942
|
)
|
|
|
|
|
|
|
|
|
|
Net property and equipment
|
|
|
528,296
|
|
|
|
375,185
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
Deferred tax asset
|
|
|
157,792
|
|
|
|
—
|
|
Less valuation
reserve
|
|
|
(120,732
|
)
|
|
|
—
|
|
|
|
|
37,060
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
253,088
|
|
|
|
253,088
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
2,185,815
|
|
|
$
|
2,406,203
|
|
See accompanying
notes to consolidated financial statements
METWOOD, INC. AND SUBSIDIARY
|
CONSOLIDATED BALANCE SHEETS
|
JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
2011
|
|
2010
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
78,401
|
|
|
$
|
148,661
|
|
Note payable
|
|
|
5,359
|
|
|
$
|
—
|
|
Accrued expenses
|
|
|
33,500
|
|
|
|
39,414
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
117,260
|
|
|
|
188,075
|
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities
|
|
|
|
|
|
|
|
|
Note payable
|
|
|
24,529
|
|
|
|
—
|
|
Due to related
company
|
|
|
136,942
|
|
|
|
175,027
|
|
|
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
|
161,471
|
|
|
|
175,027
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
278,731
|
|
|
|
363,102
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Common stock ($.001 par, 100,000,000
shares authorized;
|
|
|
|
|
|
|
|
|
12,231,797 shares issued
and outstanding at June 30, 2011)
|
|
|
12,232
|
|
|
|
12,232
|
|
Common stock not yet issued ($.001 par,
8,150 shares at
|
|
|
|
|
|
|
|
|
June 30, 2011)
|
|
|
8
|
|
|
|
8
|
|
Additional paid-in capital
|
|
|
1,544,268
|
|
|
|
1,544,268
|
|
Retained earnings
|
|
|
350,576
|
|
|
|
436,838
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
1,907,084
|
|
|
|
1,993,346
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
|
|
|
AND STOCKHOLDERS'
EQUITY
|
|
$
|
2,185,815
|
|
|
$
|
2,356,448
|
|
See accompanying
notes to consolidated financial statements
METWOOD, INC. AND
SUBSIDIARY
|
CONSOLIDATED STATEMENTS
OF INCOME
|
FOR THE YEARS ENDED JUNE
30, 2011 and 2010
|
|
|
|
|
|
|
|
2011
|
|
2010
|
REVENUES
|
|
Construction sales
|
|
$
|
2,048,516
|
|
|
$
|
2,034,292
|
|
Engineering sales
|
|
|
164,241
|
|
|
|
175,650
|
|
Gross sales
|
|
|
2,212,757
|
|
|
|
2,209,942
|
|
|
|
|
|
|
|
|
|
|
Cost of construction sales
|
|
|
1,161,821
|
|
|
|
1,208,269
|
|
Cost of engineering
sales
|
|
|
165,805
|
|
|
|
158,073
|
|
Gross cost of sales
|
|
|
1,327,626
|
|
|
|
1,366,342
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
885,131
|
|
|
|
843,600
|
|
|
|
|
|
|
|
|
|
|
ADMINISTRATIVE EXPENSES
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
79,004
|
|
|
|
63,106
|
|
Bad debt provision
|
|
|
13,332
|
|
|
|
20,282
|
|
Depreciation
|
|
|
43,016
|
|
|
|
52,849
|
|
Insurance
|
|
|
18,720
|
|
|
|
36,999
|
|
Office expense
|
|
|
13,942
|
|
|
|
10,318
|
|
Payroll expenses
|
|
|
559,136
|
|
|
|
600,592
|
|
Professional fees
|
|
|
55,876
|
|
|
|
47,876
|
|
Rent
|
|
|
79,200
|
|
|
|
79,200
|
|
Research and development
|
|
|
10,555
|
|
|
|
6,940
|
|
Telephone
|
|
|
19,820
|
|
|
|
21,986
|
|
Travel
|
|
|
9,948
|
|
|
|
22,248
|
|
Vehicle
|
|
|
48,683
|
|
|
|
43,811
|
|
Other
|
|
|
89,006
|
|
|
|
151,328
|
|
|
|
|
|
|
|
|
|
|
Total administrative
expenses
|
|
|
1,040,238
|
|
|
|
1,157,535
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(155,107
|
)
|
|
|
(313,935
|
)
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
14,700
|
|
|
|
27,835
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(140,407
|
)
|
|
|
(286,100
|
)
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
(54,145
|
)
|
|
|
(90,015
|
)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(86,262
|
)
|
|
$
|
(196,085
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted deficit per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
|
12,231,797
|
|
|
|
12,231,797
|
|
See accompanying
notes to consolidated financial statements
METWOOD, INC. AND SUBSIDIARY
|
CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY
|
FOR THE YEARS ENDED JUNE
30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
Common
|
|
|
|
|
|
|
Common
|
|
Common
|
|
Shares Not
|
|
Shares Not
|
|
Additional
|
|
|
|
|
Shares
|
|
Shares
|
|
Yet Issued
|
|
Yet Issued
|
|
Paid-in
|
|
Retained
|
|
|
(000s)
|
|
($.001
Par)
|
|
(000s)
|
|
($.001
Par)
|
|
Capital
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances July 1, 2009
|
|
|
12,232
|
|
|
$
|
12,232
|
|
|
|
8
|
|
|
$
|
8
|
|
|
$
|
1,544,268
|
|
|
$
|
632,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(196,085
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances June 30, 2010
|
|
|
12,232
|
|
|
$
|
12,232
|
|
|
|
8
|
|
|
$
|
8
|
|
|
$
|
1,544,268
|
|
|
$
|
436,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
(86,262
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances June 30, 2011
|
|
|
12,232
|
|
|
$
|
12,232
|
|
|
|
8
|
|
|
$
|
8
|
|
|
$
|
1,544,268
|
|
|
$
|
350,576
|
|
See accompanying
notes to consolidated financial statements
METWOOD, INC. AND SUBSIDIARY
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
FOR THE YEARS ENDED JUNE
30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net loss
|
|
$
|
(86,262
|
)
|
|
$
|
(196,085
|
)
|
Adjustments to reconcile net loss to
net cash provided by
|
|
|
|
|
|
|
|
|
(used for) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation, net of property disposals
|
|
|
109,151
|
|
|
|
(8,869
|
)
|
Provision for deferred income taxes
|
|
|
(86,815
|
)
|
|
|
(32,589
|
)
|
(Increase) decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
47,208
|
|
|
|
79,645
|
|
Inventory
|
|
|
83,013
|
|
|
|
(26,709
|
)
|
Prepaid expenses
|
|
|
15,496
|
|
|
|
2,110
|
|
Refundable income taxes
|
|
|
41,777
|
|
|
|
6,150
|
|
Increase (decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
and accrued expenses
|
|
|
(76,173
|
)
|
|
|
102,806
|
|
Net cash provided
by (used for) operating activities
|
|
|
47,395
|
|
|
|
(73,541
|
)
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
(271,362
|
)
|
|
|
(25,058
|
)
|
Property disposals
|
|
|
9,100
|
|
|
|
127,216
|
|
Net cash (used
for) provided by investing activities
|
|
|
(262,262
|
)
|
|
|
102,158
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net repayment to related party
|
|
|
(38,085
|
)
|
|
|
175,027
|
|
Net borrowings
from vehicle financing
|
|
|
29,888
|
|
|
|
—
|
|
Net cash (used
for) provided by financing activities
|
|
|
(8,197
|
)
|
|
|
175,027
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash
|
|
|
(223,064
|
)
|
|
|
203,644
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of the year
|
|
|
403,512
|
|
|
|
199,868
|
|
|
|
|
|
|
|
|
|
|
Cash, end of the year
|
|
$
|
180,448
|
|
|
$
|
403,512
|
|
See accompanying
notes to consolidated financial statements
METWOOD, INC. AND SUBSIDIARY
|
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
|
JUNE 30, 2011 AND 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 1 - ORGANIZATION AND OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metwood, Inc. ("Metwood")
was organized under the laws of the Commonwealth of Virginia on April 7, 1993. On June 30, 2000, Metwood entered into
an Agreement and Plan of Reorganization in which the majority of its outstanding common stock was acquired by a publicly held
Nevada shell corporation. The acquisition was a tax-free exchange for federal and state income tax purposes and was
accounted for as a reverse merger in accordance with Accounting Principles Board ("APB") Opinion No. 16. Upon
acquisition, the name of the shell corporation was changed to Metwood, Inc., and Metwood, Inc., the Virginia corporation,
became a wholly owned subsidiary of Metwood, Inc., the Nevada corporation. The publicly traded shell corporation had
not had a material operating history for several years prior to the merger
|
|
|
|
|
|
|
|
|
|
|
Effective January 1, 2002,
Metwood acquired certain assets of Providence Engineering, PC ("Providence"), a professional engineering firm with
customers in the same proximity as Metwood. The total purchase price of $350,000 was paid with $60,000 in cash and with
290,000 shares of the Company's common stock to the two Providence shareholders. These shares were valued at the closing
active quoted market price of the stock at the effective date of the purchase, which was $1.00 per share. One of the
shareholders of Providence was also an officer and existing shareholder of Metwood prior to the acquisition. The transaction
was accounted for under the purchase method of accounting. Liabilities assumed at the date of acquisition were identified,
paid and added to goodwill
|
|
|
|
|
|
|
|
|
|
|
The consolidated company
provides construction-related products and engineering services to residential customers and contractors, commercial contractors,
developers and retail enterprises, primarily in southwestern Virginia.
|
|
|
|
|
|
|
|
|
|
|
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING PRACTICES
|
Basis of Presentation - The financial
statements include the accounts of Metwood, Inc. (a Nevada corporation) and its wholly owned subsidiary, Metwood Inc. (a Virginia
corporation) prepared in accordance with accounting principles generally accepted in the United States of America and pursuant
to the rules and regulations of the Securities and Exchange Commission. All significant intercompany balances and transactions
have been eliminated.
Management’s Use of Estimates
- The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. At June 30, 2010, the significant estimates used by management include the
valuation of its goodwill. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
- For certain of our financial instruments, none of which are held for trading, including
cash, accounts receivable, accounts payable and accrued expenses, and the bank lines of credit, the carrying amounts approximate
fair value due to their short maturities.
|
|
|
|
Cash
and Cash Equivalents
- For purposes of the Consolidated Statements of Cash Flows, we consider liquid investments with
an original maturity of three months or less to be cash equivalents. We maintain our cash in bank deposit accounts, which,
at times, may exceed the federally insured limit of $250,000. We have not experienced any losses in such accounts and believe
we are not exposed to any significant credit risk on cash and cash equivalents.
|
|
|
|
|
|
|
|
|
|
|
Accounts
Receivable
- We grant credit in the form of unsecured accounts receivable to our customers based on an evaluation of their
financial condition. We perform ongoing credit evaluations of our customers. The estimate of the allowance for doubtful accounts,
which is charged off to bad debt expense, is based on management’s assessment of current economic conditions and historical
collection experience with each customer. At June 30, 2011 and 2010, the allowance for doubtful accounts was $5,000 and $30,000,
respectively. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms
and are charged off to the allowance for doubtful accounts when determined uncollectible. For the years ended June 30, 2011
and 2010, the bad debt expense was $13,332 and $36,638, respectively.
|
|
|
|
Inventory
- Inventory, consisting primarily of metal and wood raw materials, is located on our premises and is stated at the lower
of cost or market using the first-in, first-out method.
|
|
|
|
Property
and Equipment
- Property and equipment are stated at cost less accumulated depreciation and are depreciated over their
estimated useful lives using the straight-line method. Recovery periods range from three to thirty-nine years. Upon retirement
or sale, the cost and related accumulated depreciation are removed from the balance sheet, and the resulting gain or loss
is reflected in other income and expense. Maintenance and repairs are charged to operations as incurred.
|
|
|
|
Impairment
of Long-lived Assets
- We evaluate our long-lived assets for indications of possible impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing
the carrying amounts to the future net undiscounted cash flows which the assets are expected to generate. Should an impairment
exist, the impairment would be measured by the amount by which the carrying amount of the assets exceeds the projected discounted
future cash flows arising from the asset. There have been no such impairments of long-lived assets through June 30, 2011 and
2010.
|
|
|
|
Patents
- We have been assigned several key product patents developed by certain Company officers. No value has been recorded
in our financial statements because the fair value of the patents was not determinable within reasonable limits at the date
of assignment.
|
|
|
|
Goodwil
l
- We account for goodwill and intangibles under SFAS No. 142, “Goodwill and Other Intangible Assets.” As such,
goodwill is not amortized, but is subject to annual impairment reviews, or more frequent reviews if events or circumstances
indicate there may be an impairment. We performed our required annual goodwill impairment test as of June 30, 2011 using discounted
cash flow estimates and found that there was no impairment of goodwill. The estimated fair value of the reporting unit for
which goodwill was recorded, Providence Engineering, substantially exceeds carrying values.
|
|
Revenue Recognition
- Revenue is recognized when goods are shipped and earned or when services are performed, provided collection of the resulting
receivable is probable. If any material contingencies are present, revenue recognition is delayed until all material
contingencies are eliminated. Further, no revenue is recognized unless collection of the applicable consideration is
probable
|
|
|
|
|
|
|
|
|
|
|
Income Taxes
-
Income taxes are accounted for in accordance with FASB ASC 740, Income Taxes. A deferred tax asset or liability is recorded
for all temporary differences between financial and tax reporting and for net operating loss carryforwards, where applicable.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that
some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of enactment
|
|
|
|
|
|
|
|
|
|
|
Research and Development
- We perform research and development on our metal/wood products, new product lines, and new patents. Costs, if
any, are expensed as they are incurred. For the years ended June 30, 2011 and 2010, the expenses relating to research
and development were $10,555 and $6,940, respectively
|
|
|
|
|
|
|
|
|
|
|
Advertising
-
We expense advertising costs as incurred. However, certain expenditures are treated as prepaid (such as trade show fees)
if they are for goods or services which will not be received until after the end of the accounting period and are subsequently
recognized as expenses in those periods in which the goods or services are received
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Common
Share
- Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If
applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments
such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share.
This presentation has been adopted for the years presented. There were no adjustments required to net income for the
years presented in the computation of diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
Recent Accounting Pronouncements
- In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-06, Improving Disclosures about Fair Value Measurements.
This guidance requires new disclosures and clarifies certain existing disclosure requirements about fair value measurements.
It requires a reporting entity to disclose significant transfers in and out of Level 1 and Level 2 fair value measurements,
to describe the reasons for the transfers and to present separately information about purchases, sales, issuances and settlements
for fair value measurements using significant unobservable inputs. This Update is effective for interim and annual reporting
periods beginning after December 15, 2009, with limited exceptions. The adoption did not have a material effect on our consolidated
financial statements
|
|
|
|
|
|
|
|
|
|
|
In April 2010, the
FASB issued authoritative guidance which clarifies the “Stock Compensation” guidance (ASC 718). This guidance
clarifies the accounting for certain employee share-based payment awards. Awards with an exercise price denominated in the
currency of a market in which a substantial portion of the entity’s equity securities trades would not be considered
to contain a condition that is not a market, performance or service condition. Therefore, an entity would not classify such
an award as a liability if it otherwise qualifies as equity. This accounting guidance is effective for accounting periods
beginning on or after December 15, 2010, with earlier application permitted. The Company does not believe the impact
of this guidance on the Company’s consolidated financial statements will be material
|
In
July 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-20 which amends “Receivables”
(Topic 310). ASU 2010-20 is intended to provide additional information to assist financial statement users in assessing an
entity’s risk exposures and evaluating the adequacy of its allowance for credit losses. The disclosures as of the end
of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures
about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or
after December 15, 2010. The amendments in ASU 2010-20 encourage, but do not require, comparative disclosures for earlier
reporting periods that ended before initial adoption. However, an entity should provide comparative disclosures for those
reporting periods ending after initial adoption. The adoption of ASU 2010-20 did not have a material impact on our consolidated
financial statements
|
|
|
|
|
|
|
|
|
|
|
|
In
December 2010, the FASB released ASU 2010-28 entitled “When to Perform Step 2 of the Goodwill Impairment Test for Reporting
Units with Zero or Negative Carrying Amounts.” The guidance released in this update amends Accounting Standards Codification
(“ASC”) 350-20, entitled “Intangibles – Goodwill and Other – Goodwill,” by addressing
questions about entities that have reporting units with zero or negative carrying amounts. More specifically, the guidance
addresses the inconsistencies when a reporting unit concludes that Step 1 of the test is passed (meaning no goodwill impairment
is necessary) because the fair value of the goodwill is greater than zero, when in fact, factors indicating impairment of
the goodwill may still exist. The amendments included in this ASU affect all entities that have recognized goodwill
and have one or more reporting units whose carrying amount, for purposes of performing Step 1 of the
goodwill impairment test, is zero or negative. The amendments in the ASU are effective
for public entities whose fiscal years (and interim periods within those years) begin after
|
December
15, 2010. Early adoption is not permitted for public entities. For non-public entities, the ASU are effective for fiscal
years (and interim periods within those years) beginning after December 15, 2011. Non-public entities may early adopt the
amendments using the effective dates for public entities. We are evaluating the impact of this standard on our consolidated
financial statements
|
|
|
|
|
|
|
|
|
|
|
|
In
May 2011, the FASB, together with the International Accounting Standards Board ("IASB"), jointly issued ASU 2011-04,
"Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS." This new guidance
is the result of a highly contested proposal issued by the FASB and IASB in August 2009. The adoption of ASU 2011-04 gives fair
value the same meaning between U.S. generally accepted accounting principles (U.S. GAAP) and International Financial Reporting
Standards (IFRS), and improves consistency of disclosures relating to fair value. The provisions of ASU 2011-04 will be
effective for years beginning after December 15, 2011 for both public and nonpublic entities. Public entities will begin adoption
in the first interim period beginning after December 15, 2011. Early adoption is not permitted, except for nonpublic entities
that may want to adopt for the first interim period after December 15, 2011. Changes as a result of this new standard are to be
applied prospectively. However, changes in valuation techniques shall be treated as changes in accounting estimates. We
are in the process of evaluating the impact the amended guidance will have on our consolidated financial statements.
|
|
In
June 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-05 "Comprehensive Income (Topic 220): Presentation
of Comprehensive Income." The Update is intended to increase the prominence of other comprehensive income in financial statements.
In U.S. GAAP, the ASU will supersede some of the guidance in Topic 220 of the accounting Codification. The main provisions
of this Update provide that an entity that reports items of other comprehensive income has the option to present comprehensive
income in either one or two consecutive financial statements. A single statement must present the components of net income
and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive
income. In a two-statement approach, an entity must present the components of net income and total net income in the first
statement. That statement must be immediately followed by a financial statement that presents the components of other comprehensive
income, a total for other comprehensive income, and a total for comprehensive income. The option in current
GAAP that permits the presentation of other comprehensive income in the statement of changes in equity has been eliminated.
The amendments in this Update should be applied retrospectively. For public entities, the amendments are effective for fiscal
years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, the amendments are effective
for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. Early adoption is permitted, because
compliance with the amendments is already permitted. We are evaluating the impact this Update will have on our consolidated
financial statements.
|
Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a
material effect on the accompanying consolidated financial statements
|
NOTE
3 - RELATED-PARTY TRANSACTIONS
|
|
For
the years ended June 30, 2011 and 2010, we had sales of $112,062 and $77,614, respectively, to our shareholder and CEO,
Robert Callahan. As of June 30, 2011 and 2010, the related receivable was $-0-
|
|
Also,
from time to time, we contract with a construction company 50% owned by the our CEO which provides capital improvements and
maintenance work on our buildings and grounds. Billings for such services during the years ended June 30, 2011 and 2010
were $-0- and $17,000, respectively
|
NOTE 4 - COMMITMENT
In
prior years, we implemented a stock-based incentive compensation plan for our employees. Participating employees have
an after-tax deduction withheld by the Company throughout the calendar year. As of December 31 of each year, the employee
is considered vested in the plan, and we will match the participating employee's withheld amounts. We may also make
a discretionary contribution based upon pay incentives or attendance. Periodically, we will purchase restricted stock
on behalf of the employee in the amount of his withholdings, our match, and any discretionary contributions
|
NOTE 5 - SHORT-TERM BORROWINGS
AND CREDIT ARRANGEMENTS
|
|
|
|
|
|
|
|
|
|
|
We have available a $600,000
revolving line of credit with a local bank. Interest is payable monthly on the outstanding balance at the prime lending
rate. The note is secured by accounts receivable, equipment, general intangibles, inventory, and fixtures and furniture
and is personally guaranteed by the Company's CEO. The balance outstanding as of June 30, 2011 and 2010 was $-0-
|
|
|
|
|
|
|
|
|
|
|
NOTE 6 - EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the years ended
June 30, 2011 and 2010, we did not issue any common shares for the benefit of employees included in our stock-based incentive
compensation program.
|
|
|
|
|
|
|
|
|
|
|
NOTE 7 - SALE OF FIXED ASSETS
AND RELATED OPERATING LEASE
|
|
|
|
|
|
|
|
|
|
|
During the year ended
June 30, 2006, we entered into a sales and leaseback transaction with a related party. We sold the various buildings
at our corporate headquarters which house our manufacturing plants, executive offices and other buildings for $600,000 in
cash. We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to
lease back these same properties for $6,600 per month over a ten-year term expiring December 31, 2014. Rent expense
charged to operations for the years ended June 30, 2010 and 2009 was $79,200, respectively
|
|
|
|
|
|
|
|
|
|
|
Future minimum lease payments
under non-cancelable operating leases as of June 30, 2011 are as follows:
|
Year
Ending June 30,
|
|
|
|
2012
|
|
$
|
79,200
|
|
2012
|
|
|
79,200
|
|
2014
|
|
|
79,200
|
|
2015 and beyond
|
|
|
39,600
|
|
|
|
|
|
|
|
|
$
|
277,200
|
|
|
|
|
|
|
NOTE 8 - INCOME TAXES
|
|
|
|
|
|
|
|
|
|
|
The components of income
tax benefit consist of:
|
|
|
|
|
|
|
2011
|
|
2010
|
Current:
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
(113,429
|
)
|
|
$
|
(74,486
|
)
|
State
|
|
|
(7,303
|
)
|
|
|
—
|
|
|
|
|
(120,732
|
)
|
|
|
(74,486
|
)
|
Deferred:
|
|
|
|
|
|
|
|
|
Federal
|
|
|
67,636
|
|
|
|
(3,401
|
)
|
State
|
|
|
(1,049
|
)
|
|
|
(12,128
|
)
|
|
|
|
66,587
|
|
|
|
(15,529
|
)
|
|
|
|
|
|
|
|
|
|
Total
income tax benefit
|
|
$
|
(54,145
|
)
|
|
$
|
(90,015
|
)
|
The
reconciliation of the provision for income taxes at the U. S. federal statutory income tax rate of 39% to the Company's income
taxes is as follows:
|
|
|
|
|
Loss
before income taxes
|
|
$
|
(140,407
|
)
|
|
$
|
(286,100
|
)
|
Income tax benefit computed at the statutory
rate
|
|
|
(54,758
|
)
|
|
|
(111,579
|
)
|
State income tax benefit, net of federal
tax effect
|
|
|
(5,095
|
)
|
|
|
(9,448
|
)
|
Non-deductible
expenses
|
|
|
475
|
|
|
|
10,901
|
|
Effect of graduated
income tax rates
|
|
|
5,233
|
|
|
|
16,750
|
|
Prior
year adjustment
|
|
|
—
|
|
|
|
3,361
|
|
|
|
|
|
|
|
|
|
|
Total
income tax benefit
|
|
$
|
(54,145
|
)
|
|
$
|
(90,015
|
)
|
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for federal and state income tax purposes. We have recorded a deferred tax asset
at June 30, 2011, net of a valuation reserve, of $37,060. Deferred tax liabilities at June 30, 2010 were $49,755.
The components of these amounts are as follows:
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Tax loss carryforward
|
|
$
|
(66,587
|
)
|
|
$
|
—
|
|
Depreciation and miscellaneous
|
|
|
(17,528
|
)
|
|
|
7,677
|
|
Amortization of
goodwill
|
|
|
47,055
|
|
|
|
42,078
|
|
|
|
|
|
|
|
|
|
|
Net deferred
tax (asset) liabilities
|
|
$
|
(37,060
|
)
|
|
$
|
49,755
|
|
NOTE 9 - SEGMENT INFORMATION
|
|
|
|
|
|
|
We operate in two principal
business segments: (1) construction-related products and (2) engineering services. Performance of each segment is evaluated
based on profit or loss from operations before income taxes. These reportable segments are strategic business units
that offer different products and services. Summarized revenue and expense information by segment for the years ended
June 30, 2011 and 2010 is as follows:
|
|
|
|
|
|
|
|
2011
|
|
2010
|
Construction:
|
|
|
|
|
Sales
|
|
$
|
2,048,516
|
|
|
$
|
2,034,292
|
|
Cost of sales
|
|
|
(1,161,821
|
)
|
|
|
(1,208,269
|
)
|
Intersegment expenses
|
|
|
(18,693
|
)
|
|
|
(45,563
|
)
|
Intersegment revenues
|
|
|
24,000
|
|
|
|
24,000
|
|
Corporate and other expenses
|
|
|
(952,532
|
)
|
|
|
(1,010,839
|
)
|
Segment loss
|
|
$
|
(60,530
|
)
|
|
$
|
(206,379
|
)
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,200,858
|
|
|
$
|
2,035,654
|
|
Capital expenditures
|
|
$
|
235,017
|
|
|
$
|
24,208
|
|
Depreciation
|
|
$
|
103,308
|
|
|
$
|
104,320
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
1,582
|
|
|
|
|
|
|
|
|
|
|
Engineering:
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
164,241
|
|
|
$
|
175,650
|
|
Cost of sales
|
|
|
(165,805
|
)
|
|
|
(158,073
|
)
|
Intersegment revenues
|
|
|
18,693
|
|
|
|
45,563
|
|
Intersegment expenses
|
|
|
(24,000
|
)
|
|
|
(24,000
|
)
|
Corporate and other expenses
|
|
|
(18,861
|
)
|
|
|
(28,846
|
)
|
Segment income
|
|
$
|
(25,732
|
)
|
|
$
|
10,294
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
534,620
|
|
|
$
|
370,549
|
|
Capital expenditures
|
|
$
|
36,345
|
|
|
$
|
850
|
|
Depreciation
|
|
$
|
13,575
|
|
|
$
|
12,275
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
ITEM
9A(T). CONTROLS AND PROCEDURES.
Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures
Under
the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act). Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal
financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.
We concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were effective as
of June 30, 2011 to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded,
processed, and summarized and reported within the time periods specified in SEC rules and forms.
Management’s Annual Report
on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external
purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes
those policies and procedures that:
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets;
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our consolidated financial
statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and directors; and
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets
that could have a material effect on the consolidated financial statements.
Management
assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2011. In making this
assessment, management used the criteria set forth in Internal Control Over Financial Reporting — Guidance for Smaller Public
Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Subject
to the inherent limitations described in the following paragraph, our management has concluded that our internal controls over
financial reporting was effective as June 30, 2011 at the reasonable assurance level.
Inherent
Limitations Over Internal Controls
Internal
control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its
inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly,
even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, our internal
controls and procedures are designed to provide reasonable assurance of achieving their objectives.
Changes
in Internal Control over Financial Reporting
We
have made no change in our internal control over financial reporting during the fourth quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over financial reporting.
Attestation
Report of the Registered Public Accounting Firm
This
annual report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting
firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report on
Form 10-K.
Item
9B. Other Information
|
|
|
|
|
None
|
|
|
PART
III
|
|
|
|
|
|
|
|
|
|
|
Item 10.
Directors, Executive Officers and Corporate Governance
|
|
|
|
|
|
|
|
|
|
|
|
|
Identification
of Directors and Executive Officers
|
|
|
|
|
|
|
|
|
|
|
The following table sets
forth the names and the nature of all positions and offices held by all directors and executive officers of the Company for
the year ending June 30, 2011 and to the date of the filing of this report and the periods during which each such director
or executive officer has served in his respective positions:
|
|
|
|
|
|
|
|
|
|
|
Name
|
Position and Background
|
|
Robert M. Callahan
|
President and CEO
|
|
|
|
|
|
Mr.
Callahan has been involved in the building industry for over thirty years. He is well recognized in southwestern Virginia
as an innovator in the uses of passive solar design and wood/metal products in custom home building. Along with Mr.
Ronald Shiflett, he formed Metwood, Inc. in 1993 to bring light-gage construction, used in commercial building for years,
into common use in residential construction
|
|
|
|
|
|
|
|
|
|
|
Shawn A. Callahan
|
Secretary/Treasurer/CFO,
VP/General Manager
|
|
|
|
|
Education:
|
MBA Accounting, University
of Phoenix
|
|
|
|
|
|
|
B.S. Computer
Science and Mathematics, Virginia Military Institute
|
|
|
|
|
|
Since
starting with Metwood, Inc. in May 1996, Mr. Callahan has played a major role in the restructuring of the Company, increasing
production, improving efficiency, and developing computer aids for the Company
|
|
|
|
|
|
|
|
|
|
|
Term of Office
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The term of office of
the current directors shall continue until new directors are elected or appointed
|
|
|
|
|
|
|
|
|
|
|
Family Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Callahan is the father of Shawn Callahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involvement in Certain
Legal Proceedings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Except as indicated below
and to the knowledge of management, during the past five years, no present or former director, person nominated to become
a director, executive officer, promoter or control person of the Company:
|
|
|
|
|
|
|
|
|
|
|
(1) was a general partner
or executive officer of any business by or against which any bankruptcy petition was filed, whether at the time of such filing
or two years prior thereto;
|
|
|
|
|
|
|
|
|
|
|
(2) was convicted in a
criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
(3) was the subject of
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or
banking activities;
|
|
|
|
|
|
|
|
|
|
|
(4) was the subject of
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than sixty days the right of such person to engage in any activity described above
under this Item, or to be associated with persons engaged in any such activity; or
|
|
|
|
|
|
|
|
|
|
|
(5) was found by a court
of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, nor has a judgment been reversed, suspended, or vacated
|
|
|
|
|
|
|
|
|
|
|
Compliance with
Section 16(a) of the Exchange Act
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires the Company's directors, officers and persons who own more than 10% of the Company's
common stock or other registered class of equity securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required to furnish us
with copies of all Section 16(a) forms they file
|
|
|
|
|
|
|
|
|
|
|
Based solely on a review
of the forms received covering purchase and sale transactions in the Company's common stock during the fiscal year ended June
30, 2011, the Company believes that each person who, at any time during that period, was a director, executive officer, or
beneficial owner of more than 10% of the Company's common stock complied with all Section 16(a) filing requirements
|
Item 11.
Executive Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets
forth in summary form the compensation received during each of the Company's last three fiscal years by our President and
Chief Executive Officer, Robert M. Callahan:
|
|
|
|
|
|
|
|
|
|
|
|
Summary
Compensation Table
|
|
|
|
|
|
|
Other
|
Restricted
|
|
Restricted
|
|
|
|
Fiscal
|
Annual
|
|
Compen-
|
Stock
|
LTIP
|
Stock
|
|
|
|
Year
|
Salary
|
Bonuses
|
sation
|
Awards
|
Options
|
Bonuses
|
|
|
|
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(4)
|
|
|
|
2011
|
$90,217
|
$
7,200
|
-0-
|
-0-
|
-0-
|
-0-
|
|
|
|
2010
|
$98,126
|
$
2,400
|
-0-
|
-0-
|
-0-
|
-0-
|
|
|
|
2009
|
$81,832
|
$ -0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The dollar value of bonuses
(cash and non-cash) received
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
During
the periods covered by the table, the Company did not pay any other annual compensation not properly categorized as salary
or bonus, including perquisites and other personal benefits, securities or property
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
During
the periods covered by the table, the Company did not make any award of restricted stock
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
The
Company currently has no stock option or restricted stock bonus plans
|
|
|
|
|
|
|
|
|
|
|
|
No member of our management
has been granted any option or stock appreciation right; accordingly, no tables relating to such items have been included
within this item
|
|
|
|
|
|
|
|
|
|
|
Compensation of
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There are no standard
arrangements pursuant to which our directors are compensated for any services provided as director. No additional amounts
are payable to our directors for committee participation or special assignments
|
|
|
|
|
|
|
|
|
|
|
There are no arrangements
pursuant to which any of our directors was compensated during our last completed fiscal year or the previous two fiscal years
for any services provided as director
|
|
|
|
|
|
|
|
|
|
|
Termination of Employment
and Change of Control Arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There are no compensatory
plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary
Compensation Table set out above which would in any way result in payments to any such person because of his resignation,
retirement or other termination of such person's employment with the Company or its subsidiaries, or any change in control
of the Company, or a change in the person's responsibilities following a change in control of the Company
|
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
|
|
|
|
|
|
|
Security Ownership
of Certain Beneficial Owners
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets
forth the shares held by those persons who owned more than five percent of Metwood's common stock as of September 13, 2011,
based upon 12,231,797 shares outstanding:
|
|
|
|
|
|
|
|
|
|
Greater
Than 5% Owners
|
|
|
Title
of
|
Name
and Address
|
No.
of
|
Percent
|
|
|
Class
|
of
Beneficial Owner
|
Shares
|
of
Class
|
|
|
Common
|
Robert Callahan
|
|
|
|
|
|
|
819 Naff Road
|
|
6,521,782 (1)
|
53.3%
|
|
|
|
Boones Mill, VA 24065
|
|
|
|
|
Common
|
Ronald
Shiflett
|
|
|
|
|
|
|
638 Patti Road
|
|
2,101,282
|
17.2%
|
|
|
|
Rocky
Mount, VA 24151
|
|
|
|
|
(1) Includes
direct and indirect interests. There are 6,148,750 common shares included in this amount that are owned in the names
of family members of Mr. Callahan
|
|
|
|
|
|
|
|
|
|
Security Ownership
of Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets
forth the shares held by Metwood directors and officers as of September 13, 2011:
|
|
|
|
|
|
|
|
|
|
Management
Ownership
|
|
|
Title
of
|
Name
and Address
|
No.
of
|
Percent
|
|
|
Class
|
of
Beneficial Owner
|
Shares
|
of
Class
|
|
|
Common
|
Robert Callahan
|
|
|
|
|
|
|
819 Naff Road
|
|
6,521,782 (1)
|
53.3%
|
|
|
|
Boones
Mill, VA 24065
|
|
|
|
|
(1) Includes
direct and indirect interests. There are 6,148,750 common shares included in this amount that are owned in the names
of family members of Mr. Callahan
|
|
|
Ownership
of shares by directors and officers of Metwood as a group: 53.3%
|
|
|
|
|
|
|
|
|
|
Changes in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We know of no contractual
arrangements which may at a subsequent date result in a change of control in the Company
|
Item 13.
Certain Relationships and Related Transactions, and Director Independence
|
|
|
|
|
|
|
|
|
Following are the transactions
between Metwood and members of management, directors, officers, 5% shareholders, and promoters of Metwood:
|
|
|
|
|
|
|
|
|
We contract with a construction
company 50% owned by our CEO which provides capital improvements and maintenance work on ourbuildings and grounds.
|
|
|
|
|
|
|
|
|
During the year ended June
30, 2006, we entered into a sales and leaseback transaction with a related party. We sold the various buildings at our
corporate headquarters which house our manufacturing plants, executive offices and other buildings for $600,000 in cash.
We simultaneously entered into a commercial lease agreement with the related party whereby we are committed to lease back
these same properties for $6,600 per month over a ten-year term expiring December 31, 2014. Rent expense charged to
operations for the years ended June 30, 2011 and 2010 was $79,200, respectively
|
|
|
|
|
|
|
|
|
Continued education loans
were advanced to our CFO during the year ended June 30, 2010 in the amount of $13,626. The outstanding balances at June
30, 2011 and 2010 were $-0- and $8,575, respectively.
|
|
|
|
|
|
|
|
|
Item 14. Principal
Accounting Fees and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets
forth the aggregate fees billed or to be billed by Bongiovanni & Associates, CPAs for audit services rendered in connection
with the consolidated financial statements and reports for the years ended June 30, 2011 and 2010:
|
|
|
|
|
|
|
|
2011
|
|
2010
|
Audit fees
|
|
$
|
15,500
|
|
|
$
|
15,000
|
|
Audit-related fees
|
|
|
—
|
|
|
|
—
|
|
Tax fees
|
|
|
—
|
|
|
|
—
|
|
All other fees
|
|
|
5,550
|
|
|
|
5,550
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
21,050
|
|
|
$
|
20,550
|
|
|
|
|
|
|
|
|
|
Audit
fees: Consist of fees billed for professional services rendered for the audits of our consolidated financial statements
and reviews of the interim consolidated financial statements included in quarterly reports and services that are normally
provided by our auditors in connection with statutory and regulatory filings or engagements and attest services, except those
not required by statute or regulation
|
|
|
|
|
|
|
|
|
Audit-related
fees: Consist of fees billed for assurance and related services that are reasonably related to the performance of the
audit or review of our consolidated financial statements and are not reported under "Audit fees." These services
include accounting consultations in connection with the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
Tax
fees: Consist of fees billed for tax compliance, tax advice and tax planning services
|
|
|
|
|
|
|
|
|
All
other fees: Consist of fees billed for all other services other than those reported above
|
SIGNATURES
|
|
|
|
|
|
|
|
|
|
In accordance with Section
13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized
|
|
|
|
|
|
|
|
|
|
Date: February
28, 2012
/s/ Robert M. Callahan
|
Robert M. Callahan
|
President, CEO and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: February
28, 2012
/s/ Shawn A. Callahan
|
Shawn A. Callahan
|
Secretary/Treasurer/CFO and Director
|
Grafico Azioni Metwood (CE) (USOTC:MTWD)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Metwood (CE) (USOTC:MTWD)
Storico
Da Giu 2023 a Giu 2024