CFRI Conforce International Inc (GM)

Conforce International, Inc. (“Conforce” or “Company”) (OTCBB: CFRI), developers of EKO-FLOR™, a composite flooring system for the transportation industry, announced today financial results for its first quarter ended June 30, 2011.

Marino Kulas, CEO of Conforce, observed that, “The first quarter was highlighted by the transfer of technology from our development centre in Concord, Ontario to our new manufacturing facility in Peru, Indiana. The financial results during the quarter reflect the various costs associated with the establishment of a new facility which included hiring and training of production supervisors and staff. A significant portion of the revenue relating to the recent initial order will be recognized in our second quarter.”

First Quarter 2011 Financial Review

• General and administrative expenses for the three months ended June 30, 2011 were $461,218, and includes salaries and wages, professional fees and consultants, office supplies, travel and utilities, compared to $202,008 for the first quarter in 2010. The increase is attributable to the additional expense incurred in the establishment of the Peru facility which included marketing expenditures.
• The Company reported net losses for the first quarter of $661,547, or $0.00 per diluted share based on 160.1 million weighted average diluted shares.
• Amortization of property, plant and equipment for the period ended June 30, 2011 was $38,708 compared to $22,915 for the same period in the previous year. The increase is due to the purchase of additional equipment for the facility. It is expected that the depreciation expenses will also increase significantly in the upcoming quarters as the equipment is used and consequently depreciates.

Cash Flow and Balance Sheet Highlights

• The Company has approximately $5.1 million of available cash for the purposes of ramping up production in the Peru facility and the ongoing business development cost associated with its commercialization strategy. The Company’s net cash outflow from operations for the three month period ended June 30, 2011 was $716,992. The Company considers itself to have sufficient funding to continue operations beyond the next 12 months.
• As of June 30, 2011, the Company had cash and cash equivalents of $5.1 million; working capital of $5.4 million; long term debt of $2.4 million; and shareholder’s equity of $6.0 million.
• The Company received $500,000 in incentive financing for the quarter for the selection of Peru, Indiana as the location of its new manufacturing facility. This incentive payment is in the form of a forgivable loan.

Outlook for Fiscal 2012

In commenting on the Company’s outlook going forward, Mr. Kulas concluded that, “We believe that the Company is on the cusp of redefining advanced flooring systems throughout the shipping container and truck/trailer industries. Our ultimate goal on both fronts is nothing less than complete standardization.”

Conference Call Information

The Company will discuss these results in a conference call at 11:00 a.m. EST on August 16, 2011.

Participant Dial-In Numbers:(In the United States): (877) 407-8031(International): (201) 689-8031

Webcast:The call will also be simultaneously broadcast over the Internet. To listen to the live webcast, please go to and click on the conference call link, http://www.investorcalendar.com/IC/CEPage.asp?ID=165144. For those unable to listen to the live webcast, a replay will be available shortly after the call.

About Conforce International

Since its inception in 2004, Conforce has dedicated its research and development efforts to an innovative composite flooring system known as EKO-FLOR™. EKO-FLOR™ has been engineered to replace the outmoded hardwood flooring currently employed by the transportation industry. EKO-FLOR™ is significantly lighter, stronger and more durable than wood. The product possesses superior, environmentally friendly, performance characteristics including complete resistance to stains, odors, absorption of oil or liquid chemicals, microbial and insect attack. EKO-FLOR™ has successfully completed several customer trials with leading highway trailer manufacturers and is currently in trials with the largest shipping lines in the world. For more information, please visit www.conforceintl.com.

Safe Harbor Act Disclaimer

Forward-looking statements in this release are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Certain statements in this press release may contain words such as “anticipates”, “believes”, “could”, “estimates”, "expects", "intends", “may”, “projects”, “plans”, “targets” and other similar language and are considered forward-looking statements. These statements are based on management’s current expectations, estimates, forecasts and projections about the success of its newly developed container and trailer flooring products, as well as certain other composite based flooring products in various stages of development. These forward-looking statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and therefore the actual results may be materially different from those discussed.

    Conforce International Inc. Unaudited Consolidated Interim Statements of Operations and Comprehensive Loss For the three month periods ended June 30, 2011 and June 30, 2010 (US Dollars)     2011   2010   Expenses General and administrative 461,218 202,008 Research and development 111,150 5,253 Stock based compensation 6,304 43,533 Amortization of property, plant and equipment 38,708 22,915 Amortization of intangible assets 864 1,019     618,244 274,728     Loss before non-operating items (618,244 ) (274,728 )     Interest on related party loans payable 19,557 12,827 Interest on term loan 3,124 2,873 Interest and bank charges 1,034 119 Foreign exchange loss 19,588 827     Loss before discontinued operations and non-controlling interest in subsidiary (661,547 ) (291,374 )   Net loss from discontinued operations - 1,641     Net loss (661,547 ) (293,015 )   Noncontrolling interest - (13,026 )     Net loss attributable to Conforce International Inc. (661,547 ) (279,989 )   Other Comprehensive income: Translation adjustment on foreign exchange - 40,513     Total comprehensive loss   (661,547 ) $ (239,476 )   Loss per share - basic and diluted

From continuing operations

$ (0.00 ) $ (0.00 ) From discontinued operations $ - $ (0.00 )     Weighted average number of shares outstanding 160,120,049 120,001,000       Conforce International Inc. Unaudited Consolidated Interim Balance Sheets As at June 30, 2011 and March 31, 2011 (US Dollars)     June 30, 2011   March 31, 2011   Assets Current Assets Cash and cash equivalents $ 5,096,560 $ 6,121,074 Accounts receivable 431,402 611,375 Inventory 418,358 85,284 Prepaid expenses   48,661     -   5,994,981 6,817,733   Property, plant and equipment 2,313,281 1,509,537 Intangible assets 16,425 17,289 Other non-current assets   20,612     60,336   $ 8,345,299   $ 8,404,895     Liabilities Current Liabilities Accounts payable and accrued liabilities $ 543,270 $ 468,322 Current portion of term loan   24,582     24,092   567,852 492,414   Related party loan payable 1,136,247 1,110,754 Term loan 178,656 183,940 Forgivable loan   500,000     -   2,382,755 1,787,108 Shareholders equity (deficiency) Share capital 7,722,816 7,722,816 Contributed surplus 2,335,335 2,329,031 Accumulated other comprehensive income 73,739 73,739 Accumulated deficit   (4,169,346 )   (3,507,799 ) 5,962,544 6,617,787     $ 8,345,299   $ 8,404,895     Common shares issued and outstanding 160,120,049 160,120,049       Conforce International Inc. Unaudited Consolidated Interim Statements of Cash Flow For the three month periods ended June 30, 2011 and June 30, 2010 (US Dollars) 2011 2010   Operating activities Net loss $ (661,547 ) $ (279,989 ) Items not affecting cash Amortization of plant and equipment 38,708 22,915 Amortization of intangible assets 864 1,019 Imputed interest on related party loan payable 19,557 12,827 Foreign Exchange gain on related party loan payable 5,936 - Deferred rent - (2,263 ) Stock based compensation   6,304     43,533   (590,178 ) (201,958 )

Changes in non-cash working capital

(126,814 ) (99,732 )     Net cash used in operating activities   (716,992 )   (301,690 )   Net cash provided by discontinued operations   -     46,269     Investing activities Purchase of plant and equipment (842,452 ) - Increase in non-current assets 39,724 -     Net cash used in investing activities   (802,728 )   -       Financing activities Repayment of term loans (4,794 ) (5,595 ) Forgivable loan 500,000 Advances from related parties - 221,725     Net cash provided by financing activities   495,206     216,130     Effect of foreign exchange on cash   -     (5,328 )   Increase in cash and cash equivalents during the period (1,024,514 ) (44,619 )   Cash and cash equivalents, beginning of the period 6,121,074 146,304       Cash and cash equivalents, end of the period $ 5,096,560   $ 101,685     Supplemental cash flow information   Cash paid for interest 3,124 2,873