lonepineholdings10k041509.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission
File
Number 0-25909
LONE PINE
HOLDINGS, INC.
(f/k/a
Australian Forest Industries, Inc.)
(Name of
small business issuer in its charter)
|
Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
86-0931332
(I.R.S.
Employer
Identification
No.)
|
c/o
Sanders Ortoli Vaughn Flam Rosenstadt LLP
501
Madison Avenue
New York,
NY 10022
(Address
of principal executive offices, zip code)
Issuer's
telephone number: 212-588-0022
Securities
registered under Section 12(b) of the Exchange Act:
|
Title
of Each
Class
NONE
|
Name
of Each Exchange
on
Which Registered
NONE
|
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, $0.001 par value
(Title of
Class)
Indicate
by check mark if the registrant is a well known seasoned issuer as defined in
Rule 405 of the Securities Act:
Yes
[ ] or No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act:
Yes
[ ] or No [X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (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] or 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 [X].
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange
Act:
Large
accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [ ] 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
[X] or No [ ]
State 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, or the average bid and ask price of such common equity as of the last
business day of the registrants most recently completed fiscal quarter:
$1,174
Indicate
the number of shares outstanding of each of the Company’s classes of common
stock, as of April 9, 2009. Common stock, $.001 par value:
2,577,371
PART
I
ITEM
1. DESCRIPTION OF BUSINESS
Lone Pine
Holdings, Inc. (formerly Australian Forest Industries) ("the Company"), through
its wholly owned subsidiary Integrated Forest Products Pty Ltd ("Integrated"),
previously operated a saw mill in Australia which cut pine timber into building
products to supply the commercial and residential industry along the eastern
coast of Australia. In July 2007, Integrated went into receivership in Australia
and, as a result, discontinued its operations. However, the Company has not been
involved in any bankruptcy, receivership or similar proceeding.
On
September 1, 2006, Integrated, owned by the Timbermans Group Pty Ltd
("Timbermans"), entered into a share exchange agreement with the Company and
issued 240,000,000 shares of its common stock to acquire Integrated. In
connection with the share exchange agreement, Integrated became a wholly owned
subsidiary of the Company and Integrated's officers and directors became the
officers and directors of the Company. Prior to the merger, the Company was a
non-operating "shell" corporation.
Pursuant
to Securities and Exchange Commission rules, the merger of a private operating
company (Integrated) into a non-operating public shell corporation with nominal
net assets is considered a capital transaction. Accordingly, for accounting
purposes, the merger has been treated as an acquisition of the Company by
Integrated and a recapitalization of the Company. The historical financial
statements for the year ended December 31, 2007 are those of Integrated. Since
the merger was a recapitalization and not a business combination, pro forma
information is not presented.
As shown
in the accompanying consolidated financial statements, the Company had a net
loss from continuing operations of $87,534 in 2008 and had an accumulated
stockholders' deficit of $4,918,351 at December 31, 2008. Management's has
undertaken the dissolution of the business and the liquidation of all
liabilities. It spun out the bankrupt subsidiary and is looking for a merger
candidate for the public shell. At the time of the spin out, the Company
subsidiary is in bankruptcy under Australian laws. The accompanying consolidated
financial statements have been prepared on a liquidation basis and discontinued
operation.
HISTORY
The
Company was originally organized by the filing of Articles of Incorporation with
the Secretary of State of the State of Nevada on September 21, 1998 under the
name Oleramma, Inc. The Articles of Incorporation authorized the issuance of one
hundred five million (105,000,000) shares, consisting of one hundred million
(100,000,000) shares of Common Stock at par value of $0.001 per share and five
million (5,000,000) shares of Preferred Stock at par value of
$0.001.
On April
28, 1999, the Company changed its name to BuckTV.Com, Inc. on the basis that the
Company would market consumer products through an InteractiveWeb site. The
Company again changed its name in November 2002 to Multi-Tech International,
Corp.
On
September 1, 2004, we entered into a Share Exchange Agreement with Timbermans
Group Pty Ltd, an Australian corporation and its wholly-owned subsidiary at the
time Integrated Forest Products Pty Ltd, an Australian corporation as well
(“Share Exchange Agreement” and “Share Exchange”, respectively). Pursuant to
such Share Exchange Agreement, we:
· completed a 200-1 reverse stock split
of our common stock
· increased our authorized number of
shares from 100,000,000 to 300,000,000
· changed our name from Multi-Tech
International, Inc. to Australian Forest Industries
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·
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appointed
Messrs. Michael Timms, Norman Backman, Colin Baird, Antony Esplin and
Roger Timms to the board of
directors
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· issued 257,000,000 shares of our common
stock as a result of the Share Exchange Agreement
Thus,
upon completion of the Share Exchange, Integrated Forest Products Pty Ltd
(“IFP”) became a wholly-owned subsidiary of the Company and the Company’s symbol
on the OTC-BB was changed from “MLTI” to “AUFI”.
On July
31, 2007, PricewaterhouseCoopers Australia was appointed Receivers and Managers
of both Integrated and Timbermans. On this same date, Deloitte was
appointed Liquidator of Timbermans. Romanis Cant was appointed
Liquidator of Integrated on October 18, 2007.
Business
operations of Integrated were continued until November 30, 2007 when all the
assets of Integrated were offered for sale as a going concern. No
offers capable of acceptance by the Receivers were submitted. As a
result, the Receivers entered into contracts to sell the land, plant and
equipment of IFP as individual assets.
Timbermans
owned two major assets, a rural property and the shares in the
Company. The rural property was sold by auction on March 14,
2008. Timbermans entered into a contract to sell its land and
buildings for $9,556,357 and all of its manufacturing equipment for
$964,403.
Recent
Events
On July
31, 2007, both Timbermans Group and Integrated Forest Products were put into
Administration, the Australian equivalent of receivership, and
PricewaterhouseCoopers Australia was appointed each of their Receiver and
Manager. In connection with the Administration, the Receiver formed a
new Australian wholly owned subsidiary, Australian Forest Industries, LTD., and
exchanged all of the shares of Integrated Forest Products for Australian Forest
Industries, LTD. shares. On October 15, 2008, the Board of Directors
of Australian Forest Industries approved the transfer of all the outstanding
shares of Australian Forest Industries, LTD. to the principal shareholders and
Directors, who are also the shareholders of Timbermans Group. As a
result, the loan to the Timbermans Group was removed from the Company’s books
and there is currently no principal or interest due from the Company to
Timbermans Group or any other related party.
The
Company’s management is looking for a merger candidate for the public
shell. To make the Company a more attractive merger candidate,
effective January 29, 2009, the Company:
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· amended
its Articles of Incorporation to change its name from “Australian Forest
Industries” to “Lone Pine Holdings, Inc.” The Company’s
management believes that the name change will disassociate the Company
with its former business of operating a saw mill in
Australia.
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·
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amended its Articles
of Incorporation to decrease the number of authorized shares of
capital stock from 305,000,000 to 150,000,000. Prior to the
amendment, the Articles of Incorporation authorized 300,000,000 shares of
common stock, and after the amendment, the Articles of Incorporation
authorize 145,000,000 shares of common stock. The Articles of
Incorporation prior to the amendment and after the amendment both
authorize 5,000,000 shares of preferred
stock.
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·
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enacted
a reverse-stock split so that for every one hundred shares of its common
stock outstanding on the record date, shareholders received one share of
common stock (the "Reverse Stock Split").
Any fractional share of our common stock that would have existed as a
result of the Reverse Stock Split was rounded up to a whole
share. Every one hundred shares of common stock issued and
outstanding immediately prior to the record date were reclassified as, and
changed into, one share of common stock. Coupled with the decrease in our
authorized share capital, the Reverse Stock Split increased the number of
authorized and unissued shares of common stock from 14.1% prior to the
amendment to 98.2% after the
amendment.
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·
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appointed
William S. Rosenstadt as the sole director, Chief Executive Officer and
Chief Financial Officer of the Company upon the simultaneous resignation
of the then existing directors and
officers.
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ITEM
1A. RISK FACTORS
As a
smaller reporting company, the Company is not required to provide this
information.
ITEM
1B. UNRESOLVED STAFF COMMENTS
Not
applicable.
ITEM
2. PROPERTIES
We do not
have any real property or lease any real property. To the extent that
we have any office space, it has been provided to us free of charge by our Chief
Executive Officer, but there is no agreement for its continued use.
ITEM
3. LEGAL PROCEEDINGS
None.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
As
described in the Company’s Information Statement mailed to its record
shareholders and filed with the U.S. Securities and Exchange Commission on
December 12, 2008 and as described in a current report filed with the U.S.
Securities and Exchange Commission on February 11, 2009, holders of 2,385,000 of
the Company’s outstanding common stock (representing approximately 91.2% of the
Company’s outstanding stock) executed a written consent in lieu of Annual
Meeting (the "Written Consent"), effecting the following actions:
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a
reverse stock split whereby every 100 shares of common stock held by a
stockholder shall be exchanged for one share of our common
stock,
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an
amendment to our articles of incorporation to change our name from
“Australian Forest Industries” to “Lone Pine Holdings,
Inc.”,
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an
amendment to our articles of incorporation to reduce our authorized share
capital from 305 million authorized shares, consisting of 300 million
shares of common stock and 5 million shares of preferred stock, to 150
million authorized shares, consisting of 145 million shares of
common stock and 5 million shares of preferred stock and
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●
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the
appointment of William S. Rosenstadt as a director of the
Company.
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PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
The
Company's Common Stock is traded on the OTC-Bulletin Board under the symbol
AUFI. The following sets forth the range of the closing bid prices for the
Company's Common Stock for the period January 1, 2007 through March 31, 2009.
Such prices represent inter-dealer quotations, do not represent actual
transactions, and do not include retail mark-ups, mark-downs or commissions.
Such prices were determined from information provided by a majority of the
market makers for the Company's Common Stock.
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High
Close
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Low
Close
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2007
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First
Quarter
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$42.00
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$20.00
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Second
Quarter
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$22.00
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$10.00
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Third
Quarter
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$11.00
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$7.00
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Fourth
Quarter
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$15.00
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$7.00
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2008
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First
Quarter
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$10.00
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$5.00
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Second
Quarter
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$5.00
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$5.00
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Third
Quarter
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$9.50
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$5.00
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Fourth
Quarter
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$5.00
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$5.00
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2009
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First
Quarter
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$5.00
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$0.0051
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The
approximate number of holders of the Common Stock of the Company as of April 14,
2008 was 1,350.
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No
cash dividends were declared by the Company during the fiscal year ended
December 31, 2008.
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ITEM
6. SELECTED FINANCIAL DATA
As a
smaller reporting company, the Company is not required to provide this
information.
ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING STATEMENTS
It should
be noted that this Management's Discussion and Analysis of Financial Condition
and Results of Operations may contain "forward-looking statements." The terms
"believe," "anticipate," "intend," "goal," "expect," and similar expressions may
identify forward-looking statements. These forward-looking statements represent
the Company's current expectations or beliefs concerning future events. The
matters covered by these statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
set forth in the forward-looking statements, including the Company's dependence
on weather-related factors, introduction and customer acceptance of new
products, the impact of competition and price erosion, as well as supply and
manufacturing restraints and other risks and uncertainties. The foregoing list
should not be construed as exhaustive, and the Company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements, or to reflect the occurrence of
anticipated or unanticipated events. In light of the significant uncertainties
inherent in the forward-looking information included herein, the inclusion of
such information should not be regarded as a representation that the strategy,
objectives or other plans of the Company will be achieved. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made.
Our
former subsidiaries Integrated and Timbermans went into administration in
Australia (in the U.S. this is tantamount to a Chapter 11 Bankruptcy). On
July 31, 2007, Price Waterhouse Coopers LLP was appointed Receivers and Managers
of both Integrated and Timbermans. Also on this same date, Deloitte
was appointed Liquidator of Timbermans. Romanis Cant was appointed
Liquidator of Integrated on October 18, 2007. The business operations
of Integrated were continued until November 30, 2007 when all of the assets of
Integrated were offered for sale as a going concern.
In
connection with the receivership, the receiver formed a new Australian wholly
owned subsidiary, Australian Forest Industries, LTD., and exchanged all of the
shares of Integrated for Australian Forest Industries, LTD.
shares. On October 15, 2008, the board of Directors of the Company
approved the transfer of all the outstanding shares of Australian Forest
Industries, LTD. to the principal shareholders and Directors, personally.
Subsequent to the spin out, the Company became a non-operating shell
company.
As shown
in the accompanying consolidated financial statements, the Company has incurred
a net loss from continuing operations of $87,534 in 2008 and had an accumulated
deficit of $4,918,351 at December 31, 2008. Because of the dissolution of the
business and the liquidation of all liabilities, our current business objective
for the next 12 months is to investigate and, if such investigation warrants,
acquire a target company or business seeking the perceived advantages of being a
publicly held corporation. We will not restrict our potential
candidate target companies to any specific business, industry or geographical
location and, thus, may acquire any type of business.
We do not
currently engage in any business activities that provide us with positive cash
flows. As such, the costs of investigating and analyzing business
combinations for the next approximately 12 months and beyond will be paid
through funds from financing to be obtained.
During
the next 12 months we anticipate incurring costs related to filing of Exchange
Act reports and costs relating to consummating an acquisition.
We
believe we will be able to meet these costs with amounts to be loaned to or
invested in us by our stockholders or other investors.
We may
consider a business which has recently commenced operations, is a developing
company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business
which may be experiencing financial or operating difficulties and is in need of
additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.
Any
target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be
subject to numerous risks inherent in the business and operations of financially
unstable and early stage or potential emerging growth companies. In
addition, we may effect a business combination with an entity in an industry
characterized by a high level of risk, and, although our management will
endeavor to evaluate the risks inherent in a particular target business, there
can be no assurance that we will properly ascertain or assess all significant
risks.
RESULTS
OF OPERATIONS
Losses
associated with continuing operations for the twelve-month period ended
December 31, 2008 aggregated $87,534, primarily professional fees. As
a result, we realized a net operating loss from continuing operations of
$87,534 or $(0.03) per share.
Income associated with discontinued operations for the twelve-month
period ended December 31, 2008 aggregated $32,569,279 or $12.64 per share.
The income consists of a gain of $33,427,092 on the disposal of the Company's
Australian subsidiary offset by a loss of $857,795 on the operations of the
Australian subsidiary in 2008 prior to disposal. The gain on disposal
consists of a gain of $7,130,700 on the sale of land, buildings and equipment in
addition to a gain of $26,296,392 on the transfer of shares of the subsidiary.
There
were no losses associated with continuing operations for the twelve-month period
ended December 31, 2007. Losses from discontinued operations
aggregated $25,432,835, or $(9.87) per share.
The loss from discontinued operations consisted of a loss of
$10,493,071 on the operations of the Australian subsidiary in 2007 in addition
to a loss of $14,439,764 on the impairment of equipment.
LIQUIDITY
AND CAPITAL RESOURCES
On
December 31, 2008 and 2007 we had no assets.
The
Company had total liabilities of $87,534 and $34,412,897 in 2008 and 2007,
respectively.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
The
Company’s discussion and analysis of its financial condition and results of
operations are based upon its financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to bad debts, income taxes and
contingencies and litigation. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
Recent
Accounting Pronouncements Affecting the Company:
In June
2007, the Financial Accounting Standards Board ("FASB") issued Interpretation
48, "Accounting for Income Tax Uncertainties" ("FIN 48"). FIN 48 defines the
threshold for recognizing the benefits of tax return positions in the financial
statements as "more-likely-than-not" to be sustained by the taxing authority.
Recently issued literature also provides guidance on the derecognition,
measurement and classification of income tax uncertainties, along with any
related interest and penalties. FIN 48 also includes guidance concerning
accounting for income tax uncertainties in interim periods and increases the
level of disclosures associated with any recorded income tax uncertainties. FIN
48 is effective for fiscal years beginning after December 15,2007. The Company
expects to adopt the provisions of FIN 48 beginning in the first quarter of
2007. The Company is currently in the process of determining the impact, if any,
of adopting the provisions of FIN 48 on its financial position, results of
operations and liquidity.
In
September 2007, the FASB issued SFAS No. 157, "Fair Value Measurements," which
defines fair value, establishes a framework for measuring fair value under other
accounting pronouncements that permit or require fair value measurements,
changes the methods used to measure fair value and expands disclosures about
fair value measurements. In particular, disclosures are required to provide
information on the extent to which fair value is used to measure assets and
liabilities; the inputs used to develop measurements; and the effect of certain
of the measurements on earnings (or changes in net assets). SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. Early adoption, as of the beginning of an entity's
fiscal year, is also permitted, provided interim financial statements have not
yet been issued. The Company expects to adopt the provisions of FIN 48 beginning
in the first quarter of 2008. The Company is currently evaluating the potential
impact, if any, that the adoption of SFAS No. 157 will have on its consolidated
financial statements.
In
September 2007, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108").
SAB No. 108 provides guidance on how prior year misstatements should be
considered when quantifying misstatements in the current year financial
statements. SAB No. 108 requires registrants to quantify misstatements using
both a balance sheet and an income statement approach and evaluate whether
either approach results in quantifying a misstatement that, when all relevant
quantitative and qualitative factors are considered, is material. SAB No. 108
does not change the guidance in SAB No. 99, "Materiality," when evaluating the
materiality of misstatements.
SAB No.
108 is effective for fiscal years ending after November 15, 2007. Upon initial
application, SAB No. 108 permits a one-time cumulative effect adjustment to
beginning retained earnings. The Company adopted SAB No. 108 for the fiscal year
ended December 31, 2007. Adoption of SAB No. 108 did not have a material impact
on the consolidated financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS
159 allows entities to measure at fair value many financial instruments and
certain other assets and liabilities that are not otherwise required to be
measured at fair value. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. We have not determined what impact, if any, that adoption
will have on our results of operations, cash flows or financial
position.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a
smaller reporting company, the Company is not required to provide this
information.
ITEM
8. FINANCIAL STATEMENTS
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
AUDITED
FINANCIAL STATEMENTS
FOR THE
YEARS ENDED DECEMBER 31, 2008 AND 2007
CONTENTS
_____________________________________________________________________________________________
Report of
Independent Registered Public Accounting
Firm Page 1
Balance
Sheets 2
Statements
of
Operations 3
Statements
of Cash
Flows 4
Statement
of Stockholders’
Deficit
5
Notes to
Financial
Statements 6
MEYLER
& COMPANY, LLC
CERTIFIED
PUBLIC ACCOUNTANTS
ONE ARIN
PARK
1715
HIGHWAY 35
MIDDLETOWN,
NJ 07748
Report of
Independent Registered Public Accounting Firm
To the
Board of Directors
Lone Pine
Holdings, Inc.
New York,
NY
We have
audited the accompanying balance sheets of Lone Pine Holdings, Inc. as of
December 31, 2008 and 2007 and the related statements of operations,
stockholders’ deficit, and cash flows for each of the years in the two-year
period ended December 31, 2008. These 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 Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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, 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 financial statements referred to above present fairly, in all
material respects, the financial position of Lone Pine Holdings, Inc. as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for each of the years in the two-year period ended December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Meyler & Company,
LLC
Middletown,
NJ
April 10,
2009
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LONE
PINE HOLDINGS, INC.
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(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC AND SUBSIDIARY)
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BALANCE
SHEETS
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December
31,
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2008
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2007
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ASSETS
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TOTAL
ASSETS
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$ -
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$ -
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
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CURRENT
LIABILITIES
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Accrued
expenses
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$ 87,534
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$ -
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Net
liabilities of discontinued operations
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-
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34,412,897
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Total
current liabilities
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87,534
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34,412,897
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STOCKHOLDERS'
DEFICIT
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Preferred
stock, par value $0.001, 5,000,000 shares
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|
|
|
|
|
authorized,
none issued and outstanding
|
|
-
|
|
-
|
|
|
Common
stock, par value $0.001, 145,000,000 shares
|
|
|
|
|
|
|
authorized,
2,574,068 issued and outstanding and
|
|
|
|
|
|
|
outstanding
in 2008 and 2007, respectively
|
|
2,576
|
|
2,576
|
|
|
Additional
paid-in capital
|
|
4,828,241
|
|
4,828,241
|
|
|
Accumulated
other comprehensive loss
|
|
-
|
|
(1,843,600)
|
|
|
Accumulated
deficit
|
|
(4,918,351)
|
|
(37,400,114)
|
|
|
|
Total
Stockholders' Deficit
|
|
(87,534)
|
|
(34,412,897)
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$ -
|
|
$ -
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
LONE
PINE HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC AND SUBSIDIARY)
|
|
|
|
|
|
|
|
|
|
STATEMENTS
OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Year December 31,
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES-
|
|
|
|
|
|
|
General
and administrative
|
|
$ 87,534
|
|
$ -
|
|
|
|
|
|
87,534
|
|
-
|
|
PROVISION
FOR INCOME TAXES
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
LOSS
FROM CONTINUING OPERATIONS
|
|
(87,534)
|
|
-
|
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS (NET OF TAXES)
|
|
|
|
|
|
|
Loss
on operations of discontinued operations
|
|
|
|
|
|
|
(net
of tax of $0)
|
|
(857,795)
|
|
(9,792,485)
|
|
|
Gain
(loss) on disposal of discontinued operations
|
|
|
|
|
|
|
(net
of tax of $0)
|
|
33,427,092
|
|
(15,640,350)
|
|
|
|
Income
(loss) from discontinued operations
|
|
32,569,297
|
|
(25,432,835)
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$ 32,481,763
|
|
$ (25,432,835)
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS) PER SHARE (BASIC AND DILUTED)
|
|
|
|
|
|
|
Continuing
operations
|
|
$ (0.03)
|
|
$ -
|
|
|
Discontinued
operations
|
|
12.64
|
|
(9.87)
|
|
|
|
Total
|
|
$ 12.61
|
|
$ (9.87)
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING
|
|
2,576,068
|
|
2,576,068
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
|
LONE
PINE HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC AND SUBSIDIARY)
|
|
|
|
|
|
|
|
|
|
STATEMENTS
OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Year December 31,
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net
income (loss)
|
|
$ 32,481,763
|
|
$ (25,432,835)
|
|
|
Income
(loss) from discontinued operations
|
|
(32,569,297)
|
|
25,432,835
|
|
|
Adjustments
to reconcile net income (loss) to cash provided
|
|
|
|
|
|
|
by
(used in) operating activities
|
|
|
|
|
|
|
|
Increase
(decrease) in accrued expenses
|
|
87,534
|
|
-
|
|
|
Cash
used in operating activities- continuing operations
|
|
-
|
|
-
|
|
|
Cash
used in operating activities- discontinued operations
|
|
(7,985,893)
|
|
-
|
|
|
Cash
used in operating activities
|
|
(7,985,893)
|
|
-
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
Cash
provided by investing activities- continuing operations
|
|
-
|
|
-
|
|
|
Cash
provided by investing activities- discontinued operations
|
|
7,985,893
|
|
-
|
|
|
Cash
provided by investing activities
|
|
7,985,893
|
|
-
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
Cash
provided by financing activities- continuing operations
|
|
-
|
|
-
|
|
|
Cash
provided by financing activities- discontinued operations
|
|
-
|
|
-
|
|
|
Cash
provided by financing activities
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
INCREASE
IN CASH
|
|
-
|
|
-
|
|
CASH,
BEGINNING OF YEAR
|
|
-
|
|
-
|
|
CASH,
END OF YEAR
|
|
$ -
|
|
$ -
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
Net
liabilities spun out to former management and shareholders
|
|
26,296,392
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
|
LONE
PINE HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT
OF STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
Total
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Paid-in
|
|
Accumulated
|
|
Comprehensive
|
|
Stockholders'
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income
(Loss)
|
|
Deficit
|
|
Balance,
December 31, 2006
|
|
-
|
|
-
|
|
2,576,068
|
|
$ 2,576
|
|
$
4,828,241
|
|
$ (11,967,279)
|
|
$ 302,278
|
|
$ (6,834,184)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(2,145,878)
|
|
(2,145,878)
|
|
Net
loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(25,432,835)
|
|
|
|
(25,432,835)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2007
|
|
-
|
|
-
|
|
2,576,068
|
|
2,576
|
|
4,828,241
|
|
(37,400,114)
|
|
(1,843,600)
|
|
(34,412,897)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,843,600
|
|
1,843,600
|
|
Net
loss for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2008
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
32,481,763
|
|
-
|
|
32,481,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2008
|
|
-
|
|
-
|
|
2,576,068
|
|
$ 2,576
|
|
$
4,828,241
|
|
$ (4,918,351)
|
|
$ -
|
|
$ (87,534)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
December
31, 2008
NOTE A
- NATURE OF BUSINESS AND GOING
CONCERN
Nature of
Business
Australian
Forest Industries (“the Company”), through its wholly owned subsidiary
Integrated Forest Products Pty Ltd (“Integrated”), previously operated a saw
mill in Australia which cut pine timber into building products to supply the
commercial and residential industry along the eastern coast of Australia. In
July 2007, its wholly owned subsidiary in Australia was put into receivership
and has formerly discontinued its operations. In connection with the
receivership, the receiver formed a new Australian wholly owned subsidiary,
Australian Forest Industries, LTD., and exchanged all of the shares of
Integrated for Australian Forest Industries, LTD. shares. On October
15, 2008, the board of Directors of the Company approved the transfer of all the
outstanding shares of Australian Forest Industries, LTD. to the principal
shareholders and Directors, personally. Subsequent to the spin out, the
Company became a non-operating shell company.
Going
Concern
As shown
in the accompanying financial statements, the Company incurred a loss from
continuing operations of $87,534 in 2008 and had an accumulated deficit of
$4,918,351 at December 31, 2008. Management dissolved the business,
spun out the bankrupt subsidiary and is currently looking for a merger candidate
for the public shell. The Company’s former wholly owned subsidiary is
in bankruptcy under Australian laws. The accompanying financial statements have
been prepared assuming that the Company will continue as a going
concern.
|
|
NOTE
B – REVERSE STOCK SPLIT/ CHANGE OF
NAME
|
Effective
January 29, 2009, the Company amended its Articles of Incorporation to decrease
the number of authorized shares of capital stock from 305,000,000 to
150,000,000. Prior to the amendment, the Company’s Articles of
Incorporation authorized 5,000,000 shares of preferred stock and 300,000,000
shares of common stock, and after the amendment, the Company’s Articles of
Incorporation authorize 5,000,000 shares of preferred stock and 145,000,000
shares of common stock.
On
January 29, 2009 the Company also changed its name from “Australian Forest
Industries” to “Lone Pine Holdings, Inc.” The Company’s management
believes that the name change will disassociate the Company with its former
business of operating a saw mill in Australia.
On
January 29, 2009, the Company enacted a reverse-stock split so that for every
one hundred shares of our common stock outstanding on the record date, the
Company’s shareholders received one share of our common stock (the "Reverse Stock
Split"). Any fractional share of the Company’s common stock
that would have existed as a result of the Reverse Stock Split was rounded up to
a whole share. Every one hundred shares of common stock issued and
outstanding immediately prior to the record date will be reclassified as, and
changed into, one share of common stock.
The
principal effect of the Reverse Stock Split was to decrease the number of
outstanding shares of common stock. At the time of the record date, the Company
had 257,600,680 shares outstanding, which number was reduced to 2,576,068 as a
result of the Reverse Stock Split. All share and per share amounts
have been retrospectively restated to give effect to the Reverse Stock Split in
the accompanying financial statements.
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
|
|
NOTE
C –CHANGE OF CONTROL
|
Baytree
Capital Associates LLC (“Baytree”) has obtained a controlling interest in the
Company’s common shares pursuant to a Stock Purchase Agreement that it entered
into with each of the Company’s recent directors (Michael Timms, Roger Timms,
Colin Baird and Tony Esplin), their affiliate and their immediate family
members. One of the selling shareholders under the Stock Purchase
Agreement is Timbermans Group, which owned approximately 54.3% of the Company’s
share capital and is affiliated with each of the Company’s aforementioned
directors. Although Timbermans Group is owned by these directors, it
has been placed into a form of receivership under Australian law, and the
contractual decision to enter into the contract for the sale of shares was made
by its Receiver, PricewaterhouseCoopers, rather than the
shareholders.
Under the
Stock Purchase Agreement, Baytree purchased 2,385,000 shares of the Company’s
common stock (238,500,000 million shares of common stock prior to the reverse
stock-split described above) in exchange for $448,125. As a condition to
the sale under the Stock Purchase Agreement, the Company’s directors and
officers needed to resign, and Baytree arranged with those directors and
officers to have William S. Rosenstadt appointed as sole director and executive
officer.
|
|
NOTE
D – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Use of
Estimates
The
preparation of the financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Foreign Currency
Translation
For 2007
and 2008 prior to the spin out of its wholly owned subsidiary, the Company
considered the Australian dollar to be its functional
currency. Assets and liabilities were translated into US dollars at
year-end exchange rates. Statement of operations amounts were
translated using the average rate during the year. Gains and losses
resulting from translating foreign currency financial statements were included
in accumulated other comprehensive loss, a separate component of stockholders’
deficit. Upon spin out of its wholly owned subsidiary, the Company
recognized the accumulated other comprehensive loss as part of the Gain on
disposal of discontinued operations within the Statement of
Operations. Subsequent to the spin out of its wholly subsidiary, the
Company considered the US dollar to be its functional currency.
Cash
Equivalents
For
purposes of reporting cash flows, cash equivalents include investment
instruments purchased with an original maturity of three months or
less. There were no cash equivalents in 2008 or 2007.
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
|
|
NOTE
D – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
Equipment and
Depreciation
Equipment
is stated at cost and is depreciated using the straight line method over the
estimated useful lives of the respective assets. Routine maintenance,
repairs and replacement costs are expensed as incurred and improvements that
extend the useful life of the assets are capitalized. When equipment
is sold or otherwise disposed of, the cost and related accumulated depreciation
are eliminated from the accounts and any resulting gain or loss is recognized in
operations. The Company disposed of all of its equipment during
2008.
Consolidated Financial
Statements
The
financial statements previously included its wholly owned subsidiary where all
significant intercompany transactions and balances were eliminated in
consolidation. As mentioned in Note A, in 2008 the Company approved the transfer
of all the outstanding shares of its’ subsidiary to the principal shareholders
and Directors, personally. Subsequent to this transfer, the Company
did not have any subsidiaries.
Net Loss Per Common
Share
The
Company computes per share amounts in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS No.
128 requires presentation of basic and diluted EPS. Basic EPS is
computed by dividing the income (loss) available to Common Stockholders by the
weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares
of Common Stock and Common Stock equivalents outstanding during the
periods. A fully diluted calculation was not presented since the
results would be anti-dilutive.
Stock Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with the Emergency Issues Task Force (“EITF”)
96-18, the measurement date of shares issued for service is the date at which
the counterpart’s performance is complete. No shares were issued for
services in 2007 or 2008.
Fair Values of Financial
Instruments
The
Company uses financial instruments in the normal course of
business. The carrying values of accrued expenses approximate their
fair value due to the short-term maturities of these liabilities.
Revenue
Recognition
The
Company was in the business of producing lumber for the building
industry. In this connection, it received orders from distributors
and lumber yards throughout Australia. The Company shipped its
finished products FOB shipping point and title passed at that
point. The Company also assured itself that there are valid sales
arrangements, sales prices are fixed and determinable, and that collectibility
was reasonably assured. The Company did not have any significant
revenues in 2008.
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
|
|
NOTE
D – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes” (“SFAS 109”). SFAS 109 requires the determination of
deferred tax assets and liabilities based on the differences between the
financial statement and income tax bases of assets and liabilities, and using
estimated tax rates in effect for the year in which the differences are expected
to reverse. The measurement of a deferred tax asset is adjusted by a
valuation allowance, if necessary, to recognize tax benefits only to the extent
that, based on available evidence, it is more likely than not that they will be
realized. In determining the valuation allowance, the Company considers
factors such as the reversal of deferred income tax liabilities, projected
taxable income and the character of income tax assets and tax planning
strategies. A change to these factors could impact the estimated valuation
allowance and income tax expense.
Effective
January 1, 2007, the Company adopted the provisions of FIN 48, which clarifies
the accounting for income tax positions by prescribing a minimum recognition
threshold that a tax position is required to meet before being recognized in the
financial statements. FIN 48 also provides guidance on the derecognition
of previously recognized deferred tax items, measurement, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. Under FIN 48, the Company recognizes the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position
will be sustained upon examination by the taxing authorities, based on the
technical merits of the tax position. The tax benefits recognized in the
consolidated financial statements from such a position are measured based on the
largest benefit that has a greater than 50% likelihood of being realized upon
ultimate resolution. Adoption of FIN 48 did not have a material impact on
the Company’s operations or financial condition.
Recent Accounting
Pronouncements
In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 establishes a common definition for
fair value to be applied to US GAAP guidance requiring the use of fair
value, establishes a framework for measuring fair value, and expands the
disclosure about such fair value measurements. The application of
SFAS No. 157 as it relates to financial assets and financial liabilities is
effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. On February 12, 2008, the
FASB issued FSP FAS 157-2, "Effective Date of FASB Statement No. 157,"
which delays the effective date of SFAS No. 157 for all nonfinancial assets
and nonfinancial liabilities, except those that are recognized or disclosed at
fair value in the financial statements on at least an annual basis, to fiscal
years beginning after November 15, 2008, and interim periods within those
fiscal years. The Company's adoption of SFAS No. 157 on
February 3, 2008 for all financial assets and liabilities and any other
assets and liabilities that are recognized or disclosed at fair value on a
recurring basis did not impact the Company's consolidated financial
statements. The provisions of SFAS No. 157 are to be applied
prospectively as of the beginning of the fiscal year in which it is applied,
with any transition adjustment recognized as a cumulative effect adjustment to
the opening balance of retained earnings. The Company does not
anticipate that the adoption of SFAS No. 157 for nonfinancial assets and
liabilities measured at fair value on a non-recurring basis will have a material
impact on its financial position and results of operations.
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
|
|
NOTE
D – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
Recent Accounting
Pronouncements
In
February, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”). SFAS 159 allows
entities to measure at fair value many financial instruments and certain other
assets and liabilities that are not otherwise required to be measured at fair
value. SFAS 159 is effective for fiscal years beginning after November 15,
2007. The Company adopted SFAS 159 on January 1, 2008. Adoption of
SFAS 157 did not have a material impact on the Company results of operations,
cash flows or financial position.
In
December 2007, the FASB issued SFAS No. 141R, Business Combinations.
This standard establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and non-controlling interest in the acquiree
and the goodwill acquired. This statement also establishes disclosure
requirements which will enable users to evaluate the nature and financial
effects of the business combination. SFAS No. 141R is effective for
acquisitions made after November 30, 2009. The Company is currently
evaluating the potential impact, if any, that the adoption of SFAS No. 141R will
have on its consolidated financial statements.
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements. This standard outlines the
accounting and reporting for ownership interest in a subsidiary held by parties
other than the parent. SFAS No. 160 is effective for the first quarter of
2010. The Company is currently evaluating the potential impact, if any,
the adoption of SFAS No. 160 will have on its consolidated financial
statements.
In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles." SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles. SFAS No.
162 became effective in November 2008. Its adoption is not expected to have a
material impact on the Company's consolidated financial statements.
NOTE E - VARIABLE INTEREST
ENTITIES
The
Company accounts for variable interest entities (“VIE’s”) under FIN
46R. FIN 46R provides general guidance as to the definition of a
variable interest entity and requires it to be consolidated if a party with an
ownership, contractual or other financial interest, absorbs the majority of the
VIE’s expected losses, or is entitled to receive a majority of the residual
returns, or both. A variable interest holder that consolidates the
VIE is the primary beneficiary and is required to consolidate the VIE’s assets,
liabilities and noncontrolling interests at fair value at the date the interest
holder first becomes the primary beneficiary of the VIE.
The
Company previously concluded that Timbermans Group Pty. Ltd. was deemed to be a
VIE under FIN 46R and accordingly was consolidated. Timbermans Group,
a holding company which acquired the Company through an exchange agreement,
became the majority shareholder of Australian Forest Industries by investing
$5,307,400 in the Company which was borrowed from National Australia Bank.
Timbermans Group Pty. Ltd. is also in bankruptcy under Australian
laws. As part of the transfer of the
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
|
|
NOTE
E - VARIABLE INTEREST ENTITIES
(CONTINUED)
|
shares of
Australian Forest Industries, LTD (See Note A), Timbermans Group Pty. Ltd ceased
to be deemed a VIE and was deconsolidated.
NOTE F - DISCONTINUED
OPERATIONS
In July
2007, the Company’s wholly owned subsidiary in Australia was put into
receivership and has formerly discontinued its operations. In 2007,
the Company entered into a contract to sell its land, buildings and equipment
for $10,564,886 ($12,386,000 Australian dollars). The sales price of
the equipment was less than the carrying amount, therefore the equipment was
written down to the net contract price in 2007 when the contract was
signed. This resulted in an impairment loss of $15,640,350 in
2007. The contract price for the land and buildings was substantially
greater than their carrying values, thus no impairment was
recorded.
The sale
of land, buildings and equipment was completed in 2008. The Company
recognized a gain of $7,130,700 on the disposal. The proceeds were
used to pay for administrative expenses and creditors of the
Company.
On
October 15, 2008, the board of Directors of the Company approved the transfer of
all the outstanding shares of Australian Forest Industries, LTD. to the former
principal shareholders and Directors, personally. As a result of this
transfer, the Company transferred net liabilities of $26,296,392 to its former
principal shareholders and Directors. This transfer completed the
discontinuance of the Company’s operations in Australia. Summarized
financial information for the discontinued operations is shown
below.
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Revenues
|
|
$ -
|
|
$ 6,614,918
|
|
|
|
|
|
|
|
Loss
from discontinued operations
|
|
(857,795)
|
|
(10,493,071)
|
|
Gain
(loss) on disposal
|
|
33,427,092
|
|
(14,939,764)
|
|
Income
tax expense
|
|
-
|
|
-
|
|
Gain
(loss) from discontinued operations
|
|
$
32,569,297
|
|
$
(25,432,835)
|
The
following represents the net liabilities of entities discontinued at December
31, 2008 and 2007:
|
|
|
2008
|
|
2007
|
|
Cash
|
|
$ -
|
|
$ 1,922,008
|
|
Property
and equipment
|
|
-
|
|
3,547,356
|
|
Bank
overdrafts
|
|
-
|
|
(4,400,360)
|
|
National
Bank of Australia- commercial loan
|
|
-
|
|
(6,273,931)
|
|
National
Bank of Australia- capitalized lease loan
|
|
-
|
|
(9,867,459)
|
|
Accounts
payable
|
|
-
|
|
(7,531,841)
|
|
Accrued
goods and service tax
|
|
-
|
|
(1,041,966)
|
|
Related
party loan
|
|
-
|
|
(8,508,300)
|
|
Accrued
taxes and benefits
|
|
-
|
|
(2,258,404)
|
|
|
|
-
|
|
$(34,412,897)
|
LONE PINE
HOLDINGS, INC.
(FORMERLY
AUSTRALIAN FOREST INDUSTRIES, INC. AND SUBSIDIARY)
NOTES TO
FINANCIAL STATEMENTS
NOTE G -
INCOME TAXES
At
December 31, 2008, the Company had a deferred tax asset of approximately
$140,000. The deferred tax asset consists principally of net
operating loss carry forwards. SFAS No. 109 requires the
establishment of a valuation allowance to reflect the likelihood of realization
of deferred tax assets. Since realization is not assured,
the Company has recorded a valuation allowance for the entire deferred tax asset, and the accompanying financial
statements do not reflect any net asset for deferred taxes at December 31, 2008
or 2007.
The
Company’s net operating loss carry forwards amounted to approximately $467,000
at December 31, 2008, which have expirations beginning in 2025.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not
applicable.
ITEM
9A(T). DISCLOSURE CONTROLS AND PROCEDURES
Responsibility
For Financial Information — Management is responsible for the
preparation, accuracy, integrity and objectivity of the Consolidated Financial
Statements and the other financial information included in this report.
Such information has been prepared in conformity with accounting principles
generally accepted in the United States of America and accordingly, includes
certain amounts that represent management’s best estimates and judgments. Actual
amounts could differ from those estimates.
Responsibility
for Internal Controls — Management is also responsible for
establishing and maintaining adequate internal controls over financial
reporting. These internal controls consist of policies and procedures that are
designed to assess and monitor the effectiveness of the control environment
including: risk identification, governance structure, delegations of authority,
information flow, communications and control activities. While no
system of internal controls can ensure elimination of all errors and
irregularities, OP-TECH’s internal controls, which are reviewed and modified in
response to changing conditions, have been designed to provide reasonable
assurance that assets are safeguarded, policies and procedures are followed,
transactions are properly executed and reported, and appropriate disclosures are
made. The concept of reasonable assurance is based on the recognition that there
are limitations in all systems of internal control and that the costs of such
systems should be balanced with their benefits.
Report On
Internal Control Over Financial Reporting — Management has evaluated the Company’
internal control over financial reporting as of December 31, 2008. This
evaluation was based on criteria for effective internal control over financial
reporting set forth in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management has concluded that the
Company’s internal control over financial reporting is effective as of
December 31, 2008. This annual report does not include an
attestation report of the company's registered public accounting firm regarding
internal control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit the
company to provide only management's report in this annual report.
Report On
Disclosure Controls And Procedures — As of December 31, 2008,
management carried out an evaluation of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures pursuant to
Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Based upon that evaluation, it concluded that the Company’s
disclosure controls and procedures are effective in ensuring that information
required to be disclosed in its periodic filings under the Exchange Act is
accumulated and communicated to us to allow timely decisions regarding required
disclosures, and such information is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms.
Prior to
such evaluation and as reported in the second amendment to the Company’s annual
report filed with the U.S. Securities and Exchange Commission on Form 10-KSB/A
on October 3, 2008, management concluded, that the disclosure controls and
procedures for the year ended December 31, 2007 were ineffective in timely
alerting them to material information relating to our business required to be
included in our periodic SEC filings. This ineffectiveness in the
disclosure controls and procedures was revealed by the failure to include the
proper assessment on internal controls over financial reporting as of December
31, 2007 contained in the original version of the annual report filed with the
U.S. Securities and Exchange Commission and by the failure to note the
ineffectiveness of the disclosure controls and procedures in the first amendment
to such report. The Company took steps to cure the ineffectiveness of
its disclosure controls and procedures by redoubling its efforts and instructing
its outside counsel to do the same to ensure that such deficiencies do not occur
in the future.
ITEM
9B. OTHER INFORMATION
Baytree Capital Associates LLC (“Baytree”) has obtained a controlling interest
in our common shares pursuant to a Stock Purchase Agreement that it entered into
with each of our recent directors (Michael Timms, Roger Timms, Colin Baird and
Tony Esplin), their affiliate and their immediate family members. One of the
selling shareholders under the Stock Purchase Agreement is Timbermans Group,
which owned approximately 54.3% of our share capital and is an affiliate of each
of our recent directors. Although Timbermans Group is owned by our
recent directors, it has been placed into a form of receivership under
Australian law, and the contractual decision to enter into the contract for the
sale of shares was made by its Receiver, PricewaterhouseCoopers, rather than its
shareholders.
Under the
Stock Purchase Agreement, Baytree purchased 2,385,000 shares of our common
stock, or 91.2% of our outstanding shares of common stock, in exchange for
$448,125. We are not aware of Baytree entering into a loan to obtain the
funds used in the purchase of the control shares. As a condition to the sale
under the Stock Purchase Agreement, our directors and officers needed to resign,
and Baytree arranged with those directors and officers to have William S.
Rosenstadt appointed as our sole director and executive officer.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
OFFICERS
AND DIRECTORS
We have 4
executive officers who also serve as our board of directors. Our directors are
elected at each annual meeting of shareholders. The following individuals are
all of our executive officers and directors:
Name Age
Positions and Offices With The Company
------- ----- ---------------------------------------------------
William
S. Rosenstadt
40 Chief Executive Officer, Chief
Financial Officer, Director
The
following is a biographical summary of the director and officer of the
Company:
William
Rosenstadt
Mr.
William Rosenstadt became our Chief Executive in February of 2009. He
has been a member of Sanders Ortoli Vaughn-Flam Rosenstadt LLP, our outside
special counsel, since June 2007. Prior thereto, Mr. Rosenstadt was a
member of Rubin, Bailin, Ortoli LLP from January 2004 to June 2007 and an
associate at Spitzer Feldman, LLP from 2001 through December 2003. Mr.
Rosenstadt received his B.A. from Syracuse University in 1990 and a J.D. from
the Benjamin N. Cardozo School of Law in 1995.
Director
Positions in Other Public Companies
The
Company’s director holds no directorship in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act. The Company’s director
holds no directorship in a company registered as an investment company under the
Investment Company Act of 1940.
Code
of Conduct
The
Company does not have an Audit or Strategy committee. Neither does the Company
have a standing nominating committee or any committee performing a similar
function. For the above reasons, the Company has not adopted a code of
ethics.
COMPLIANCE
WITH SECTION 16(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Section
16(a) of the Securities Exchange Act of 1934 requires executive officers and
directors who beneficially own more than ten percent (10%) of the Company's
Common Stock to file initial reports of ownership and reports of changes of
ownership with the Securities and Exchange Commission. Executive officers,
directors and greater than ten percent (10%) beneficial owners are required by
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
The
information required to be compliant with Section 16(a) is found herein.
However, at the present time the required individuals have not filed the
appropriate Section 16(a) forms although it has been represented to the Company
that such are being prepared and will be filed shortly after the filing of this
annual report.
ITEM
11. EXECUTIVE COMPENSATION
Except as
set out below, the Company has not paid in either of 2008 or 2007 any annual or
long-term compensation through the latest practicable date to the Chief
Executive Officer of the Company and sole director of the Company or to any
executive officers of the Company or directors of the Company who held such
positions during 2008. During the fiscal year ended December 31,
2007, some of our directors received reimbursements for minimal expenses
incurred for traveling to Canberra for a meeting of the board of
directors.
Employment
Contracts
There are
no employment agreements with the executive officers at this time.
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 information regarding the beneficial ownership of the
shares of the Common Stock (the only class of
shares previously issued by the Company) at April 9, 2008
by (i) each person known by the Company to be the beneficial owner of more than
five percent (5%) of the Company’s outstanding shares of Common
Stock, (ii) each director of the Company, (iii) the
executive officers of the Company, and (iv) by all directors and executive
officers of the Company as a group. Each person named in the table,
has sole voting and investment power with respect to all shares shown as
beneficially owned by such person and can be contacted at the address of the
Company.
|
Title
of Class
|
Name
of Beneficial Owner
|
Shares
of Common Stock
|
|
Percent
of Class
|
|
|
|
|
|
|
|
Common
|
Baytree
Capital Associates LLC
|
2,385,000
|
|
91.2%
|
|
|
|
|
|
|
|
Common
|
William
S. Rosenstadt
|
0
|
|
0%
|
|
Directors
and Officers as a group
|
|
0
|
|
0%
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
William
Rosenstadt, the Company’s sole director and executive officer, is a member of
our Sanders Ortoli Vaughn-Flam Rosenstadt LLP, the Company’s outside special
counsel. Since January 1, 2008, the compensation for legal, filing
and other services provided the Company’s outside special counsel was
approximately $165,000.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
Year
Ended
December
31, 2008
|
Year
Ended
December
31, 2007
|
|
|
|
|
|
Audit
Fees
|
$66,300
|
$46,700
|
|
Audit
Related Fees
|
0
|
$0
|
|
Tax
Fees
|
0
|
$0
|
|
All
Other Fees
|
0
|
$0
|
|
|
$66,300
|
$46,700
|
Audit
Fees
Audit
fees are the aggregate fees billed for professional services rendered by our
independent auditors for the audit of our annual financial statements, the
review of the financial statements included in each of our quarterly reports and
services provided in connection with statutory and regulatory filings or
engagements.
Audit
Related Fees
Audit
related fees are the aggregate fees billed by our independent auditors for
assurance and related services that are reasonably related to the performance of
the audit or review of our financial statements and are not described in the
preceding category.
Tax
Fees
Tax fees
are billed by our independent auditors for tax compliance, tax advice and tax
planning.
All
Other Fees
All other
fees include fees billed by our independent auditors for products or services
other than as described in the immediately preceding three
categories.
PART IV
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number Exhibit Description
|
31.1
|
Certification of Principal
Executive Officer and Acting Principal Accounting Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002
|
|
32.1
|
Certification of Principal
Executive Officer and Acting Principal Accounting Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
|
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AUSTRALIAN
FOREST INDUSTRIES
/s/ William S.
Rosenstadt
Name:
William S. Rosenstadt
Title:
Chief Executive Officer, Acting Principal Accounting Officer and
Director
Date:
April 15, 2008