UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-K/A
Amendment No. 1
[X] ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31,
2007
[ ] TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
For transition period ___ to ____
Commission file number: 000-49900
RIVAL
TECHNOLOGIES, INC.
(Exact name of registrant as specified in
its charter)
|
|
|
|
Nevada
(State or other jurisdiction of
incorporation
or organization)
|
43-2114971
(I.R.S.
Employer Identification No.)
|
|
3155 East
Patrick Lane, Suite 1, Las Vegas, Nevada
(Address of
principal executive offices)
|
89120
(Zip
Code)
|
Registrant’s telephone number:
(866)
694-2803
Securities registered under Section 12(b) of the Exchange
Act: None
Securities registered under Section 12(g) of the Exchange
Act: Common Stock
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes [ ] No [X]
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 preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.
Yes [X] No [
]
Indicate by check mark if disclosure of delinquent filers
pursuant to item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company:
|
|
|
|
Large accelerated filer [
]
Non-accelerated filer
[ ]
|
Accelerated filed [
]
Smaller reporting company
[X]
|
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).
Yes [ ] No [X]
The aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold as of the last business day of the registrant’s
most recently completed second fiscal quarter was approximately $25,753,027.
The number of shares outstanding of the registrant’s
common stock as March 24, 2008 was 47,157,560.
Documents incorporated by reference: None
EXPLANATORY NOTE
Pursuant to a limited review of our reports by the
Securities and Exchange Commission (“SEC”), the SEC has requested that we amend
this annual report for the year ended December 31, 2007 to include the financial
data for the year ended December 31, 2006 on the balance sheet. In
addition the SEC requested that we include a revised report from our former
independent registered public accounting firm. Other than these changes,
the disclosures in this amended report are as of the initial filing date of
April 2, 2008 and this report does not include subsequent events.
TABLE OF CONTENTS
PART II
Item 8.
Financial Statements and Supplementary
Data.........................................................................................................
3
PART IV
Item 15. Exhibits,
Financial Statement
Schedules....................................................................................................................
31
Signatures.......................................................................................................................................................................................
31
2
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
RIVAL TECHNOLOGIES, INC.
AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
December 31, 2007 and 2006
C O N T E N T S
Reports of Independent
Registered Public Accounting Firms
4
Consolidated Balance Sheet
7
Consolidated
Statements of Operations
8
Consolidated
Statements of Other Comprehensive Loss
9
Consolidated
Statements of Stockholders’ Equity (Deficiency in Assets)
10
Consolidated Statements of Cash
Flows
16
Notes to the Consolidated
Financial Statements
18
3
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|
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C
hisholm
B
ierwolf &
N
ilson, LLC
Certified Public
Accountants
|
Todd
D. Chisholm, Audit Partner
Nephi
J. Bierwolf, Tax Partner
Troy
F. Nilson, Audit Partner
|
533 West
2600 South, Suite 25
$
Bountiful, Utah 84010
$
Phone:
(801) 292-8756
$
Fax: (801) 292-8809
$
www.cbncpa.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders
of Rival Technologies, Inc.
Las Vegas, Nevada
We have audited the
accompanying consolidated balance sheet of
Rival Technologies, Inc.
as of December 31, 2007, and the related consolidated statements of
operations, stockholders
=
equity, and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company
=
s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits
in accordance with the standards of the P.C.A.O.B. (United States). Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
Our audit 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 that our audit provide a reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects,
the financial position of Rival Technologies, Inc. as of December 31,
2007, and the results of its operations and cash flows for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.
The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in Note 2 to the consolidated financial
statements, the Company has incurred substantial losses from operations,
recurring negative cash flows from operations, and has limited sales of its
products which raises substantial doubt about its ability to continue as a going
concern. Management
=
s plans in regard to these
matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Chisholm, Bierwolf &
Nilson
Chisholm, Bierwolf & Nilson
Bountiful, Utah
March 27, 2008
__________________________________________________________________
Member of AICPA, UACPA & Registered with PCAOB
4
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Dohan
and Company
Certified
Public Accountants
a
professional Association
[logo]
|
7700 North Kendall Drive, 200
Miami, Florida 33156-7578
Telephone
(305)274-1366
Facsimile (305)
274-1368
E-mail
info@uscpa.com
Internet
www.uscpa.com
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To
the Stockholders and Board of Directors
Rival
Technologies, Inc. and Subsidiaries (A Development Stage Company)
Las
Vegas, Nevada
We have audited the accompanying consolidated balance sheet of
Rival Technologies, Inc. and Subsidiaries (A Development Stage Company), (the
“Company”) as of December 31, 2006, and the related consolidated statement of
operations and cash flows for the year then ended December 31, 2006, and
cumulative amounts from beginning of development stage (April 1, 2003) to
December 31, 2006 and statements of stockholders’ equity (deficiency in assets)
for the year 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 audit.
We conducted our audit in accordance with the 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 consolidated financial statements are
free of material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audit 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 also 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 audit provides a reasonable basis for our opinion.
[CPS
logo]
[agi
logo]
5
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of the
Company as of December 31, 2006, and the results of their operations and
their cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the financial statements, the Company has experienced
recurring losses from operations. In addition, the Company has an
accumulated deficit of approximately $14,907,764 as of December 31, 2006, which
raises substantial doubt about its ability to continue as a going concern.
Management’s plans in regard to these matters are also described in Note
2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
As described in Note 14 to the financial statements, the 2006 and
2005 financial statements have been restated for an error in recording of
proportionate share of the net losses of the majority-owned subsidiary, TRU
Oiltech, as minority interest.
/s/ Dohan and Company, CPAs, P.A.
Miami, Florida
June 14, 2007 except as to Note 14, which is August 27, 2008
6
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RIVAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
(A Development
Stage Company)
|
|
Consolidated
Balance Sheet
|
|
Expressed in
Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
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|
December 31,
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|
|
December 31, 2007
|
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2006
(Restated-Note14)
|
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ASSETS
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CURRENT
ASSETS
|
|
|
|
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Cash
and cash equivalents (Note 1)
|
$
|
344,836
|
$
|
405,676
|
|
|
Other
current assets
|
|
1,773
|
|
16,581
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
346,609
|
|
422,257
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, net (Note 1 and 3)
|
|
12,876
|
|
3,747
|
|
INTANGIBLE
PROPERTY
|
|
-
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$
|
359,485
|
$
|
430,004
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
$
|
107,271
|
$
|
95,946
|
|
|
Related
party payable (Note 5)
|
|
4,500
|
|
4,500
|
|
|
Convertible
note payable (Note 6)
|
|
491,000
|
|
-
|
|
|
Promissory
note payable (Note 7)
|
|
5,575
|
|
5,575
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
608,346
|
|
106,021
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
608,346
|
|
106,021
|
|
|
|
|
|
|
|
|
|
MINORITY
INTEREST IN SUBSIDIARY
|
|
-
|
|
(79,992)
|
|
|
|
-
|
|
(79,992)
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY AND DEFICIT
|
|
|
|
|
|
|
Common
stock, 100,000,000 shares authorized without
|
|
|
|
|
|
|
par
value, 47,157,560 shares issued and outstanding (Note 8)
|
|
14,847,051
|
|
14,611,620
|
|
|
Additional
paid-in capital
|
|
651,544
|
|
651,544
|
|
|
Accumulated
other comprehensive income
|
|
23,798
|
|
48,575
|
|
|
Deficit
accumulated during the development stage
|
|
(8,385,397)
|
|
(7,675,276)
|
|
|
Accumulated
deficit
|
|
(7,385,857)
|
|
(7,232,488)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity and Deficit
|
|
(248,861)
|
|
403,975
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY AND DEFICIT
|
$
|
359,485
|
$
|
430,004
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these financial
statements
|
7
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|
|
|
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|
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|
|
|
RIVAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
(A Development
Stage Company)
|
|
Consolidated
Statements of Operations
|
|
Expressed in
Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
Amounts From
|
|
|
|
|
|
|
|
|
|
Beginning of
|
|
|
|
|
|
|
|
|
|
Development
|
|
|
|
|
|
|
|
Stage (April 1,
|
|
|
|
|
|
For the Years Ended
|
|
2003) to
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
(Restated -
|
|
(Restated -
|
|
|
|
|
|
|
|
Note 14)
|
|
Note 14)
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of beneficial conversion feature
|
|
-
|
|
-
|
|
82,622
|
|
|
Consulting
|
|
384,561
|
|
175,314
|
|
1,041,906
|
|
|
Depreciation
|
|
3,371
|
|
2,034
|
|
8,832
|
|
|
Finders'
fees
|
|
-
|
|
-
|
|
665,000
|
|
|
Investor
relations
|
|
116,689
|
|
106,687
|
|
710,346
|
|
|
Other
general and administrative
|
|
181,339
|
|
162,484
|
|
753,632
|
|
|
Research
and development
|
|
78,983
|
|
189,589
|
|
561,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
764,943
|
|
636,108
|
|
3,823,367
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
|
(764,943)
|
|
(636,108)
|
|
(3,823,367)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
of intangible property (Note 4)
|
|
(4,000)
|
|
-
|
|
(4,554,000)
|
|
|
Write
off payable
|
|
-
|
|
23,617
|
|
23,617
|
|
|
Interest
expense
|
|
(14,595)
|
|
-
|
|
(36,159)
|
|
|
Interest
income
|
|
40
|
|
303
|
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
(18,555)
|
|
23,920
|
|
(4,566,030)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES AND
|
|
|
|
|
|
|
|
MINORITY
INTEREST
|
|
(783,498)
|
|
(612,188)
|
|
(8,389,397)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS BEFORE MINORITY INTEREST
|
|
(783,498)
|
|
(612,188)
|
|
(8,389,397)
|
|
|
|
|
|
|
|
|
|
|
|
MINORITY
INTEREST
|
|
-
|
|
-
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
$
|
(783,498)
|
$
|
(612,188)
|
$
|
(8,385,397)
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
AND DILUTED NET LOSS PER SHARE
|
$
|
(0.02)
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|
|
|
|
|
|
|
SHARES
OUTSTANDING - BASIC AND DILUTED
|
|
46,768,151
|
|
45,836,582
|
|
|
The accompanying notes
are an integral part of these financial statements.
8
|
|
|
|
|
|
|
|
|
|
|
RIVAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
(A Development
Stage Company)
|
|
Consolidated
Statements of Other Comprehensive Loss
|
|
Expressed in
Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
Amounts From
|
|
|
|
|
|
|
|
|
|
Beginning of
|
|
|
|
|
|
|
|
|
|
Development
|
|
|
|
|
|
|
|
Stage (April 1,
|
|
|
|
|
|
For the Years Ended
|
|
2003) to
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
(Restated -
|
|
(Restated -
|
|
|
|
|
|
|
|
Note 14)
|
|
Note 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
$
|
(783,498)
|
$
|
(612,188)
|
$
|
(8,385,397)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
exchange gain (loss)
|
|
(24,777)
|
|
76,513
|
|
14,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE LOSS
|
$
|
(808,275)
|
$
|
(535,675)
|
$
|
(8,370,861)
|
The accompanying notes
are an integral part of these financial statements
9
|
|
|
|
|
|
|
|
|
|
|
|
|
RIVAL TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
(A Development Stage Company)
|
|
Consolidated Statements of Cash Flows
|
|
Expressed in Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
|
Amounts From
|
|
|
|
|
|
|
|
|
|
|
Beginning of
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
|
|
|
|
|
|
|
|
|
Stage (April 1,
|
|
|
|
|
|
|
For the Years Ended
|
|
2003) to
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
|
(Restated -
|
|
(Restated
|
|
|
|
|
|
|
|
|
Note 14)
|
|
Note 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(783,498)
|
$
|
(612,188)
|
$
|
(8,385,397)
|
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
used
by operating activities:
|
|
|
|
|
|
|
|
|
|
Amortization
of beneficial conversion feature
|
|
|
-
|
|
-
|
|
82,622
|
|
|
Depreciation
|
|
|
3,371
|
|
2,034
|
|
8,832
|
|
|
Shares
issued for services
|
|
|
220,078
|
|
18,550
|
|
1,615,775
|
|
|
Impairment
of intangible property
|
|
|
4,000
|
|
-
|
|
4,554,000
|
|
|
Minority
interest
|
|
|
-
|
|
-
|
|
(4,000)
|
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Receivables
and prepayments
|
|
|
15,241
|
|
(12,146)
|
|
-
|
|
|
|
Other
current assets
|
|
|
(433)
|
|
38,730
|
|
61,547
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
26,678
|
|
(3,780)
|
|
68,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used by Operating Activities
|
|
|
(514,563)
|
|
(568,800)
|
|
(1,998,539)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of equipment
|
|
|
(12,500)
|
|
-
|
|
(21,708)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used by Investing Activities
|
|
|
(12,500)
|
|
-
|
|
(21,708)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
debenture
|
|
|
-
|
|
-
|
|
24,967
|
|
|
Promissory
note payable
|
|
|
-
|
|
-
|
|
5,575
|
|
|
Proceeds
from issuance of convertible notes payable
|
491,000
|
|
-
|
|
491,000
|
|
|
Proceeds
from issuance of common stock, net of
|
|
|
|
|
|
|
|
|
issue
costs
|
|
|
-
|
|
248,566
|
|
1,970,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
491,000
|
|
248,566
|
|
2,492,167
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT
OF EXCHANGE RATE CHANGES ON CASH
|
|
(24,777)
|
|
12,851
|
|
(129,571)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH
|
|
|
(60,840)
|
|
(307,383)
|
|
342,349
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT BEGINNING OF PERIOD
|
|
|
405,676
|
|
713,059
|
|
2,487
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT END OF PERIOD
|
|
$
|
344,836
|
$
|
405,676
|
$
|
344,836
|
The accompanying notes
are an integral part of these financial statements
16
|
|
|
|
|
|
|
|
|
|
|
|
|
RIVAL TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
(A Development Stage Company)
|
|
Consolidated Statements of Cash Flows (Continued)
|
|
Expressed in Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
|
Amounts
|
|
|
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
|
|
|
|
|
Beginning of
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
|
|
|
|
|
|
|
|
|
Stage (April 1,
|
|
|
|
|
|
|
For the Years Ended
|
|
2003) to
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
|
|
|
|
|
|
|
(Restated -
|
|
(Restated -
|
|
SUPPLEMENTAL
DISCLOSURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid For:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
Income
taxes
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash
Transactions:
|
|
|
|
|
|
|
|
|
|
Settlement
of accounts payable to an officer of the
|
|
|
|
|
|
|
|
|
Company
|
|
$
|
-
|
$
|
-
|
$
|
54,744
|
|
|
Shares
issued to acquire intangible property
|
|
$
|
-
|
$
|
-
|
$
|
4,550,000
|
|
|
Shares
issued for services
|
|
$
|
220,078
|
$
|
18,550
|
$
|
1,615,775
|
|
|
Shares
issued to settle convertible debenture and
|
|
|
|
|
|
|
|
|
accrued
interest payable
|
|
$
|
-
|
$
|
-
|
$
|
13,729
|
|
|
Beneficial
conversion feature recorded as
|
|
|
|
|
|
|
|
|
|
additional
paid in capital
|
|
$
|
-
|
$
|
-
|
$
|
94,300
|
|
|
Contributed
capital on settlement of accounts
|
|
|
|
|
|
|
|
|
|
Payable
|
|
$
|
-
|
$
|
-
|
$
|
7,500
|
|
|
Common
stock issued in lieu of debt
|
|
$
|
15,353
|
$
|
-
|
$
|
15,353
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these financial statements
17
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business
Rival Technologies, Inc. is incorporated under the laws of the
State of Nevada as a result of its amalgamation and merger between Rival
Technologies, Inc., a British Columbia Company (“Rival BC”), and Rival
Technologies, Inc. (the “Company”), a Nevada Company. Tru Oiltech, Inc.
was organized on September 20, 2005, under the laws of the State of Nevada.
The Company currently has limited operations and, in accordance with
Statement of Financial Accounting Standard (SFAS) No. 7, “
Accounting and
Reporting by Development Stage Enterprises,
” is considered a Development
Stage Enterprise.
The Company was the exclusive licensed manufacturer and
distributor worldwide of a brand of fire extinguishants and fire retardant
products. The license agreement was terminated December 1999. During the
three years ended December 31, 2002, all sales were made to customers in North
America. The Company does not expect any further sales of these products
and has abandoned this business effective the three-month period beginning April
1, 2003.
During the period beginning April 1, 2003, the Company acquired a
new technology for reducing diesel emissions and will now focus on developing
and marketing this technology.
On October 31, 2005, the Company incorporated TRU Oiltech, Inc. a
Nevada corporation (“TRU Oiltech”) for the purpose of acquiring, developing and
marketing the TRU Oitech technology. On October 31, 2005, the Company
received 6,000,000 shares of TRU Oiltech common stock and the owners of the
technology received 4,000,000 shares of TRU Oiltech. As a result TRU
Oiltech is a majority-owned subsidiary of the Company.
On October 31, 2005, the Company incorporated CWI Technology, Inc.
a Nevada corporation, as a wholly-owned subsidiary for the purpose to develop
and market the CWI Technology.
Significant Accounting Polices
These consolidated financial statements have been prepared in
conformity with generally accepted accounting principles in the United States of
America. The significant accounting policies adopted by the Company are as
follows:
18
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Significant Accounting Polices (Continued)
a. Basis of Presentation
These consolidated financial statements are presented in Canadian
dollars and there are no exchange restrictions. The Company’s functional
currency is the Canadian dollar. In accordance with the Statement of Financial
Accounting Standard (SFAS) No. 52, “
Foreign Currency Translation
,” which
stipulates that if the US-incorporated registrant had little or no assets and
operations in the U.S., substantially all the operations were conducted in a
functional currency other that the U.S. dollar, and the reporting currency
selected was the same as the functional currency, then reporting in the foreign
currency would produce little or no foreign currency translation effects.
The assets and liabilities denominated in foreign currency are
translated into Canadian dollars at the current rate of exchange existing at
period end and revenues and expenses are translated at daily exchange rates.
Related translation adjustments are reported as a separate component of
stockholders’ equity, whereas, gains or losses relating from foreign currency
transactions are included in the results of operations.
These consolidated financial statements are also prepared in
conformity with accounting principles generally accepted in the United States of
America and include the accounts of the Company and its wholly-owned subsidiary,
Rival Technologies (Delaware) Inc., its former subsidiary Tracker Capital Corp.
which merged with Rival Technologies (Delaware) Inc. during 2002, its
wholly-owned subsidiary, CWI Technology, (Nevada) Inc., and its 60% owned
subsidiary, Tru Oiltech, (Nevada) Inc. All significant intercompany
accounts and transactions have been eliminated.
b. Use of Estimates
The preparation of these consolidated financial statements in
conformity with accounting principles generally accepted in the United State of
America requires management to make estimates and assumptions that could affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenue and expenses during the period. Actual
results could differ from those reported.
19
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Significant Accounting Polices (Continued)
c. Foreign Currency Translation
Transaction amounts denominated in foreign currencies are
translated at exchange rates prevailing at transaction dates. Carrying
values of monetary assets and liabilities are adjusted at each balance sheet
date to reflect the exchange rate at that date. Non-monetary assets and
liabilities are translated at the exchange rate on the original transaction
date. Gains and losses from restatement of foreign currency monetary
assets and liabilities are included in the statement of operations.
Revenues and expenses are translated at the rates of exchange prevailing
on the dates such items are recognized in the statements of operations.
d. Cash and Cash Equivalents
The Company considers cash held at banks and all highly liquid
investments with original maturities of three months or less to be cash and cash
equivalents.
e. Concentrations
Financial instruments that potentially subject the Company to
concentrations of credit risks consist of cash and cash equivalents. The
Company places its cash and cash equivalents at well known quality financial
institutions. At times, such cash and investments may be in excess of
government insurance limits. Credit Suisse insures CHF 30,000 of funds for
the bank accounts that the Company has with Credit Suisse. At December 31,
2007, the Company had funds totaling $258,350 in excess of the insured
limit
.
f
.
Property and Equipment
Property and equipment is recorded at cost. Major additions
and improvement are capitalized. The cost and related accumulated
depreciation of property and equipment retired or sold are removed from the
accounts and any differences between the undepreciated amount and the proceeds
from the sale are recorded as gain or loss on sale. Depreciation is
computed using the straight-line method over the estimated useful life of the
assets as follows:
Description
Estimated Useful Life
Furniture
and equipment
5 years
Computer
equipment
3 years
20
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Significant Accounting Polices (Continued)
g. Intangible Property
Intangible property is recorded at cost.
The carrying value of intangible property is evaluated for
potential permanent impairment on an ongoing basis at the reporting unit level.
In order to determine whether permanent impairments exists, management
considers the Company’s and its subsidiaries’ financial condition as well as
expected pre-tax earnings, undiscounted cash flows or market related values.
If the carrying value of intangible property of a reporting unit exceeds
the fair value of the reporting unit, the carrying value of the intangible
property must be written down to fair value in the year the impairment is
recognized.
h. Research and Development
Research and development costs are expensed as incurred.
Research and development costs charged to expenses were $78,983 and
$189,589 for the years ended December 31, 2007 and 2006, respectively.
There are no significant agreements relating to research and development
expenditures.
i. Income Taxes
Income taxes are computed in accordance with Statement of
Financial Accounting Standard (SFAS) No. 109 “
Accounting for Income
Taxes
.” A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net operating loss
carry forwards. Deferred tax expenses (benefit) result from the net change
during the period of deferred tax assets and liabilities.
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 all
of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.
21
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Significant Accounting Polices (Continued)
j. Net Loss per Share
Basic net loss per share is computed by dividing net loss
attributable to common stockholders by the weighted average number of shares of
common stock outstanding during the period. Diluted net loss per share
takes into consideration shares of common stock outstanding (computed under
basic loss per share) and potentially dilutive shares of common stock. In
periods where losses are reported the weighted average number of common shares
outstanding excludes common stock equivalents because their inclusion would be
anti-dilutive. For the years ended December 31, 2007 and 2006, there were
no common stock equivalents.
k. Newly Adopted Pronouncements
The Company does not expect the adoption of recently issued
accounting pronouncements to have a significant impact on the Company’s results
of operations, financial position or cash flow.
l. Comparative Figures
Certain comparative figures have been reclassified in the prior
year consolidated financial statements to conform with the presentation adopted
in the current year.
m. Segment Information
The Company operates in one reportable segment for Rival
Technologies, Tru Oiltech and CWI Technology, being the diesel technology
industry, in Canada and the United States of America.
n. Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities approximate
the carrying value based on their effective interest rates compared to current
market prices.
22
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE
1 -
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Significant Accounting Polices (Continued)
o. Convertible Debt
The Company has adopted Emerging Issues Task Force (EITF) Issue
No. 98-5, “
Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios
”, and EITF Issue No.
00-27, “
Application of EITF Issue No. 98-5 to Certain Convertible
Instruments
.” The Company incurred debt whereby the
convertible feature of the debt provides for a rate of conversion based upon the
closing market value of the common stock on the last trading day prior to the
date upon which the note holder provides written notice. Therefore, the
Company has not recorded a beneficial conversion feature on this note pursuant
to EITF Issue No. 98-5 and 00-27.
NOTE 2 -
GOING CONCERN
As shown in the accompanying consolidated financial statements,
the Company incurred net losses of $783,498 and $612,188 during the years ended
December 31, 2007 and 2006, respectively. The Company has historically
incurred significant net losses which have resulted in an accumulated deficit of
$15,771,254 at December 31, 2007. In addition, the Company’s current
liabilities exceeded its current assets by $261,737 at December 31, 2007.
These factors, as well as the uncertain conditions that the Company faces
relative to capital raising activities, create substantial doubt as to the
Company’s ability to continue as a going concern. The Company is seeking
to raise additional capital through public and/or private placement offerings,
targeting strategic partners in an effort to increase revenues, and expanding
revenues through strategic acquisitions. The ability of the Company to
continue as a going concern is dependent upon the success of capital offerings
or alternative financing arrangements and expansion of its operations. The
consolidated financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern. As
of December 31, 2007, the Company had cash and cash equivalents of $344,836.
The Company will require additional funding during the next twelve
months to finance the growth of its current operations and achieve its strategic
objectives. Management is actively pursuing additional sources of
financing sufficient to generate enough cash flow to fund its operations through
2008 and 2009. However, management cannot make any assurances that such
financing will be secured.
23
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 3 -
PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December 31,
2007:
Furniture and equipment
$
16,311
Computer equipment
5,397
Accumulated depreciation
(8,832)
Total property and equipment
$
12,876
Depreciation expense was $3,371 and $2,034 for the years ended
December 31, 2007 and 2006, respectively.
NOTE 4 -
INTANGIBLE PROPERTY
On September 20, 2005, the Company executed an agreement with the
now director and president of Tru Oiltech and two other businessmen (see Note
11). Under the terms of the agreement, the director and president along
with the two other businessmen agreed to sell the TRU Technology to the Company
in exchange for 4,000,000 shares of Tru Oiltech valued at 0.001 per share.
Fair value of the shares was determined to be par value as no shares or
assets exist prior to this date. Tru Oiltech issued 4,000,000 shares.
Fair value of the TRU Technology was negotiated in an arms-length
transaction by the parties to be $4,000. As of December 31, 2007, the
Company determined that the intangible property was fully impaired, and recorded
an impairment expense of $4,000 for the year ended December 31, 2007.
NOTE 5 -
RELATED PARTY PAYABLE
As of December 31, 2007, there was an outstanding amount of $4,500
that was owed to an officer of the Company. The amount is unsecured,
non-interest bearing and payable on demand.
NOTE 6 -
CONVERTIBLE NOTE PAYABLE
During August 2007, the Company received $491,000 ($500,000 USD)
from a company pursuant to a convertible note payable. The note bears
interest at 7% per annum, and is due on July 30, 2008. As of December 31,
2007, accrued interest on the note totaled $14,333. Until July 30, 2008, the
note holder has the right, at the holder’s option, to convert the principal and
accrued interest on the note, in whole or in part, into shares of the Company’s
common stock at the closing market value of the common stock on the last trading
day prior to the date upon which the note holder provides written notice (see
also Note 1).
24
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 7 -
PROMISSORY NOTE PAYABLE
On April 17, 2003, the Company issued a promissory note of $5,575
to a former director of the Company. The note is unsecured, non-interest
bearing and payable on demand. The Company intends to redeem the
promissory note in the near future. Consequently, it is classified as a
current liability in the balance sheet.
NOTE 8 -
COMMON STOCK
On September 9, 2005, the Company’s board of director’s resolved
to issue and transfer 5,000,000 shares of common stock to a trustee for the sole
purpose of selling the shares of common stock. The trustee will receive a
trustee fee equal to 3% of the selling value of the shares of common stock.
There is no time limit as to when the trustee has to sell the shares of
common stock. Any shares of common stock not sold by the trustee will be
returned to the Company at its request. Accordingly, those shares of
common stock have not been recorded as issued and outstanding on the
consolidated balance sheet at December 31, 2007. Effective August 1, 2005,
the trustee fee was increased to 5% of the selling value of the shares of common
stock.
In conjunction with the above, the Company entered into an
agreement with a third party for investor relations services whereby the third
party is entitled to receive a fee equal to 47% of the selling value of the
shares of common stock. Additionally, the third party is entitled to
receive, on a one-time basis only, 250,000 shares of common stock which was
delivered upon execution of this agreement dated November 15, 2004. These
shares were value at $1.24 per share for a total value of $308,945. The
shares were issued on February 9, 2005. Further, during March and August
of 2005, the third party received a total of 505,000 shares of common stock for
investor relations services. 5,000 shares were value at $1.88 per share
for a total value of $9,418, and 500,000 shares were valued at $1.33 per share
for a total value of $665,000. All issues approximated the trading price
when the shares were issued. This agreement was terminated at the end of
July 2005.
Subsequently, the Company engaged a third party for investor
relations services whereby the third party receives a fee equal to 43% of the
selling value of the shares of common stock. Through December 31, 2007,
6,717,326 shares of common stock had been issued by the trustee for proceeds of
$2,805,782 (net of issue costs), and for investor relations and other services
rendered.
On July 6, 2005, the Company issued 45,000 shares of common stock
to various directors and consultants at $1.25 per share for a total value of
$56,250 which approximated the trading price when the shares were issued.
These shares were issued pursuant to an equity incentive plan that the
Company has in place.
25
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 8 -
COMMON STOCK (Continued)
On October 24, 2005, the Company issued 20,000 shares of common
stock to a director of Tru Oiltech in consideration of engineering services
provided to the Company. The weighted average of the share price of the
Company was $1.2592 for the 5 trading days prior to the issuance of the shares.
Consulting expense of $25,184 was recognized as the fair market value of
the shares. These shares were issued pursuant to an equity incentive plan
that the Company has in place.
Only July 12, 2006, the Company issued 10,000 shares at $0.75 per
share to a director in lieu of services. Shares are issued as per S-8 and
Director and Form 4 Insider Filing was filed.
On August 3, 2006, the Company issued 12,500 shares at $0.56 per
share to a consultant in lieu of services. Shares are issued as per S-8.
On October 26, 2006, the Company issued 5,000 shares at $0.81 per
share to a consultant in lieu of services. Shares are issued as per S-8.
On April 6, 2007, the Company issued 26,862 shares at $0.57 per
share to an individual in lieu of investor relations debt incurred during 2006,
as described above.
On August 17, 2007, the Company issued 375,000 shares at $0.43 per
share to various related parties for services rendered. These shares were
issued pursuant to an equity incentive plan that the Company has in place.
On December 31, 2007, the Company issued 147,070 shares at $0.40
per share to a consultant in lieu of services
Reg S shareholders have the same voting and dividend rights as
common shareholders, being one vote per share present at any shareholder meeting
of the Company. The Company does not intend to issue dividends at this
time.
As of December 31, 2007, there were no stock options outstanding.
NOTE 9 -
INCOME TAXES
Income taxes are computed in accordance with Statement of
Financial Accounting Standard (SFAS) No. 109 (SFAS 109) “
Accounting for
Income Taxes”
. A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net operating loss
carry forwards. Deferred tax expenses (benefits) result from the net
change during the period of deferred tax assets and liabilities.
26
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 9 -
INCOME TAXES (Continued)
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 all
of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.
The Company has approximately $6,190,000 of operating loss
carry-forwards, which expire in various periods through 2027. The
availability of certain operating loss carry-forwards for income tax purposes is
subject to certain restrictions due to Internal Revenue Code Section 382 because
there was a change in control of the Company in 2001.
The Company has provided a valuation allowance against its
deferred tax assets given that it is in the development stage and it is more
likely than not that these benefits will not be realized.
The income tax benefit differs from the amount computed at federal
statutory rates of approximately 48% as follows:
|
|
|
|
|
|
For the Years Ended
|
|
|
December 31,
|
|
|
2007
|
2006
|
|
Income tax benefit of operating
|
|
|
|
loss carry
forwards
|
$
376,100
|
$ 293,800
|
|
Change in valuation
|
(376,100)
|
(293,800)
|
|
|
$
-
|
$
-
|
The deferred tax asset consisted of the following at December 31,
2007.
|
|
|
|
Deferred tax asset:
|
|
|
|
|
|
Income tax benefit of
operating loss carry forwards
|
$ 2,970,000
|
|
Valuation allowance
|
(2,970,000)
|
|
Net deferred tax asset
|
$
-
|
27
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 10 -
LOSS PER SHARE
Following is a reconciliation of the loss per share for the years
ended December 31, 2007 and 2006
:
|
|
|
|
|
|
|
December 31,
|
|
|
2007
|
2006
|
2006
|
|
|
|
Restated
|
As Reported
|
|
Net (loss) attributable to
|
|
|
|
|
common shareholders
|
$ (783,498)
|
$ (612,188)
|
$ (543,748)
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
basic and diluted
|
46,768,151
|
45,836,582
|
45,836,582
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
|
|
|
(based
on weighted average shares)
|
$
(0.02)
|
$
(0.01)
|
$
(0.01)
|
NOTE 11 - BUSINESS COMBINATION
On September 20, 2005, the Company executed an agreement with the
now director and president of Tru Oiltech (See Note 4). The purpose of the
business combination was to acquire a majority interest in the new technology
for reducing diesel emissions (See Note 1). The agreement provides that
the Company be issued 6,000,000 shares of Tru Oiltech common stock valued at
$0.001 per share. Fair value of the shares was determined to be par value
as no shares or assets exist prior to this date. Tru Oiltech accordingly
issued 6,000,000 shares to the Company making it a 60% majority shareholder.
The agreement also provides that the Company will provide additional
financing of $150,000. As of December 31, 2007, the Company had advanced
$268,577 toward that financing, which amount is eliminated in the consolidation.
NOTE 12 – AMALGAMATION AGREEMENT
The Company and Rival Technologies, Inc. (“Rival Nevada”) have
agreed to amalgamate and merge pursuant to an agreement dated September 6, 2005.
Rival Nevada was incorporated in the State of Nevada on September 2, 2005,
and was inactive and a wholly-owned subsidiary of the Company at the time of the
amalgamation and merger. The provisions of the agreement provide for the
Company to have its jurisdiction in the State of Nevada. All issued and
outstanding shares of the Company shall remain outstanding. The
amalgamation agreement took effect on October 14, 2005.
28
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 13 -
JOINT VENTURE AGREEMENT
On February 23, 2007, the Company and its subsidiary, TRU Oiltech,
entered into a joint venture agreement that entitled the joint venture partner a
25% interest and exclusive right to exploit the TRU Oiltech technology in
Venezuela until March 2008. The joint venture partner has the
responsibility, out of its share of joint venture participation, to compensate
others that may assist, either directly or indirectly, in facilitating the
commercial exploitation of the Company’s technology in Venezuela.
Additionally, the Company and the joint venture partner are to share in
long-term savings obtained from the use of Rival’s technology in Venezuela on a
ratio of a minimum of 25% of the savings for the account of the Company and
joint venture partner. No significant transactions have occurred with this
joint venture through the date of this report.
NOTE 14 -
CORRECTION OF AN ERROR
Subsequent to the year ended December 31, 2007, management of the
Company discovered an error related to the consolidated financial statements for
the years ended December 31, 2006 and 2005. During the years ended
December 31, 2006 and 2005, the Company’s majority-owned subsidiary, TRU
Oiltech, incurred net losses of $171,101 and $38,880, respectively. The
Company erroneously recorded the proportionate share of the net losses, $68,440
and $15,552, as minority interest on the consolidated balance sheet,
consolidated statements of operations and consolidated statements of other
comprehensive loss, as of and for the years ended December 31, 2006 and 2005,
respectively. Only $4,000 of the $15,552 net loss for the year ended
December 31, 2005 should have been recorded as minority interest, reducing the
minority shareholders basis to zero. No additional amount of the net loss
should have been recorded to minority interest for the year ended December 31,
2006 since the minority shareholder’s initial investment had already been
reduced to $-0- during the year ended December 31, 2005.
Accordingly, the Company has restated the consolidated financial
statements to reflect this error. The effect to the financial statements
is as follows:
29
RIVAL TECHNOLGIES, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in Canadian Dollars)
December 31, 2007
NOTE 14 -
CORRECTION OF AN ERROR (Continued)
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
|
|
|
|
|
For
the Year Ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
As
|
|
As Previously
|
|
Net
|
|
|
|
|
Restated
|
|
Recorded
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
Minority
interest (share of net loss)
|
$
-
|
|
$
68,440
|
|
$ (68,440)
|
|
Net
loss
|
$
612,188
|
|
$
543,748
|
|
$
68,440
|
|
Basic
and diluted net loss per share
|
$
(0.01)
|
|
$
(0.01)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Other
|
|
|
|
|
|
|
Comprehensive
Loss
|
|
|
|
|
|
|
For
the Year Ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
As
|
|
As Previously
|
|
Net
|
|
|
|
|
Restated
|
|
Recorded
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
Foreign
exchange gain (loss)
|
$
76,513
|
|
$ (63,662)
|
|
$
140,175
|
|
Other
comprehensive loss
|
$
535,675
|
|
$ 607,410
|
|
$
(71,735)
|
30
PART
IV
ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES
Exhibits
No.
Description
3.1
Articles of Incorporation of Rival
Technologies, Inc. (Incorporated by reference to exhibit 3.1 to Form 8-K, filed
October 31, 2005)
3.2
Articles of Merger, dated September
6, 2005 (Incorporated by reference to exhibit 3.2 to Form 8-K, filed October 31,
2005)
3.3
Bylaws of Rival Technologies, Inc.
(Incorporated by reference to exhibit 3.3 to Form 8-K, filed October 31,
2005)
4.1
The 2005 Stock Equity Incentive Plan
of Rival Technologies Inc. (Incorporated by reference to exhibit 4.1 to Form
S-8, filed June 30, 2005)
21.1
Subsidiaries of Rival Technologies
(Incorporated by reference to exhibit 21.1 of Form 10-QSB, as amended, filed May
1, 2007)
31.1
Chief Executive Officer Certification
31.2
Principal Financial Officer
Certification
32.1
Section 1350 Certification
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, there unto duly
authorized
RIVAL TECHNOLOGIES, INC.
By:
/s/ Douglas B.
Thomas
Douglas B. Thomas
President, CEO,
Secretary, Treasurer, and Director
Date: August 29, 2008
31