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EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CHARLES THOMPSON SLAY - Gurata Gold, Inc.exhibit31-1.htm
EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 OF CHARLES THOMPSON SLAY - Gurata Gold, Inc.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2011

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________to _________________________

Commission File Number 000-52796

FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

Nevada 71-1046926
(State or other jurisdiction of incorporation or (IRS Employer Identification No.)
organization)  
   
5927 Balfour Court, Suite 112, Carlsbad, CA 92008
(Address of principal executive offices) (Zip Code)

760.585.1900
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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.
[X] YES [ ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act

Large accelerated filer [ ]   Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller Smaller reporting company [X]
  reporting company)  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
[ ] YES [X] NO


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 42,985,000 common shares issued and outstanding as of April 19, 2011.


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Our unaudited interim financial statements for the nine month period ended February 28, 2011, form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.



FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.
(FORMERLY GURATA GOLD, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS

    (UNAUDITED)        
    February 28,     May 31,  
    2011     2010  
ASSETS  
Current assets:            
         Cash $  68   $  50,890  
         Accounts receivable   -     109  
             
         Total current assets   68     50,999  
             
         Construction in progress   32,613     -  
             
Total assets $  32,681   $  50,999  
             
LIABILITIES AND STOCKHOLDERS' DEFICIT  
Current liabilities:            
         Accounts payable $  80,039   $  46,829  
         Accrued liabilities   15,576     5,000  
         Advances payable   35,107     33,183  
         Due to related parties   24,390     813  
             
         Total current liabilities   155,112     85,825  
             
             
Total liabilities   155,112     85,825  
Commitments and contingencies   -     -  
Stockholders' deficit:            
Common stock; authorized 75,000,000; $0.001 par value;
     42,550,000 and 39,000,000 shares issued and outstanding at
     February 28, 2011 and May 31, 2010
 

42,550
   

39,000
 
Additional paid in capital   912,700     76,250  
Common stock subscribed   225,000     205,000  
Deficit accumulated during the exploration stage   (327,027 )   (327,027 )
Deficit accumulated during the development stage   (975,654 )   (28,049 )
             
             
Total stockholders' deficit   (122,431 )   (34,826 )
             
Total liabilities and stockholders' deficit $  32,681   $  50,999  

The accompanying notes are an integral part of these interim financial statements



FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.  
(FORMERLY GURATA GOLD, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)

                            From May 18,  
                            2010 (Inception of
    Three Months     Nine Months     development  
    Ended February 28,     Ended February 28,     stage) to  
    2011     2010     2011     2010     February 28,  
                               
Revenue:                              
   Sales $  41,073   $  -   $  41,073   $  -   $  41,073  
   Cost of Goods Sold   (36,375 )   -     (36,375 )   -     (36,375 )
   Gross Profit   4,698     -     4,698     -     4,698  
                               
Operating Expenses:                              
   Administrative fees   13,500     -     33,500     -     37,000  
   Bank charges and interest   671     -     1,830     -     1,925  
   Consulting   23,042     -     118,958     -     126,271  
   Entertainment   224     -     1,383     -     1,383  
   Office   3,859     -     19,623     -     24,208  
   Professional fees   4,685     -     32,914     -     36,155  
   Regulatory   1,709     -     5,401     -     5,401  
   Rent   5,100     -     15,300     -     17,000  
   Repairs and maintenance   -     -     855     -     855  
   Travel   1,410     -     10,575     -     10,575  
   Wages and salaries   563,084     -     711,964     -     719,579  
                               
   Total operating expenses   617,284     -     952,303     -     980,352  
                               
Net loss before discontinued operations   612,586     -     947,605     -     975,654  
                               
   Discontinued operations   -     5,446     -     22,614     -  
                               
Net loss for the period $  (612,586 ) $  (5,446 ) $ (947,605 ) $  (22,614 ) $  (975,654 )
                               
                               
Net loss per share from continuing operations: Basic and diluted $  (0.01 ) $  (0.00 ) $  (0.02 ) $  (0.00 )    
                               
Net loss per share from discontinued operations: Basic and diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )    
                               
Weighted average number of shares outstanding: Basic and diluted   41,350,000     39,000,000     40,482,637     39,000,000      

The accompanying notes are an integral part of these interim financial statements



FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.
(FORMERLY GURATA GOLD, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)

                From May 18, 2010  
                (Inception of  
                Development Stage)  
    Nine Months Ended     to  
    February 28, 2011     February 28, 2010     February 28, 2011  
                   
Cash flow from operating activities:                  
Net loss $  (947,605 ) $  (22,614 ) $  (975,654 )
                   
Adjustments to reconcile net loss to net cash used in operating activities:                  
Stock based compensation   540,000     -     540,000  
                   
Changes in operating assets and liabilities:                  
Accounts receivable   109     -     109  
Accounts payable   33,210     -     41,090  
Accrued liabilities   10,576     -     (75 )
Advances payable   1,924     -     1,924  
Due to related parties   23,577     -     24,065  
Accounts receivable related to discontinued operations   -     (4 )   -  
Accounts payable related to discontinued operations   -     4,804     -  
Accrued liabilities related to discontinued operations   -     (475 )   -  
Advances payable related to discontinued operations   -     18,075     -  
Net cash used in operating activities   (338,209 )   (214 )   (368,541 )
                   
Cash flows from investing activities:                  
Payments for construction in progress   (32,613 )   -     (32,613 )
Net cash used in investing activities   (32,613 )   -     (32,613 )
                   
Cash flows from financing activities:                  
Cash from issuance of common stock   200,000     -     250,000  
Cash from subscription to common stock   120,000     -     120,000  
Net cash provided by financing activities   320,000     -     370,000  
                   
Net decrease in cash during the period   (50,822 )   (214 )   (31,154 )
                   
Cash, beginning of period   50,890     1,339     31,222  
                   
Cash, end of period $  68   $  1,125   $  68  
                   
Supplemental disclosure of cash flow information:                  
Cash paid during the period                  
Taxes $  -   $  -   $  -  
Interest $  -   $  -   $  -  
                   
Non cash items:                  
       Common shares issued for services $  540,000         $  540,000  
       Common shares subscribed $  (100,000 )   -   $  (100,000 )
       Common shares issued $  100,000     -   $  100,000  

The accompanying notes are an integral part of these interim financial statements



FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.
(FORMERLY GURATA GOLD, INC. )
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
FEBRUARY 28, 2011

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Nature of Operations

Forza Environmental Building Products, Inc. (“Forza”) was incorporated on May 26, 2006, under the laws of the State of Nevada. Until May 17, 2010, Forza’s principal business was the acquisition and exploration of mineral resources in northwestern British Columbia, Canada. On May 18, 2010, Forza announced a change in its direction to manufacture, market and distribute the Artzer Z-Panel building product. Accordingly, the Company exited the Exploration Stage and entered the Development Stage on that date. On July 19, 2010, the company changed its name to Forza Environmental Building Products, Inc. In these notes, the terms “Company”, “we”, “us” or “our” mean Forza.

Development Stage

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America. The Company has produced minimal revenues from its principal business and is a development stage company, and follows Accounting Standard 915 Development Stage Entities (AS 915), where applicable.

The Company is in the early development stage. In a development stage company, management devotes most of its time to conducting set up work and developing its business. These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The Company’s continuation as a going concern and its ability to emerge from the development stage with any planned principal business activity is dependent upon the continued financial support of its shareholders and its ability to obtain the necessary equity financing and attain profitable operations.

Since the acquisition of the Artzer Z-Panel the Company has determined it will not continue to proceed with its exploration activities.

Basis of Presentation

The accompanying unaudited financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements included on Form 10-K of Forza Environmental Building Products, Inc. for the year ended May 31, 2010. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and are of a normal recurring nature. Operating results for the three and nine months ended February 28, 2011, are not necessarily indicative of the results that may be expected for any other interim period or the entire year. For further information, these unaudited financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended May 31, 2010, included in the Company’s annual report on Form 10-K.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

For purposes of the balance sheet and statement of cash flows, the Company considers all amounts on deposit with financial institutions and highly liquid investments with maturities of 90 days or less to be cash equivalents. At February 28, 2011 and May 31, 2010, the Company did not have any cash equivalents.

Financial Instruments

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. At February 28, 2011 and May 31, 2010 the Company had $20 and $500 respectively, in cash that was not insured. The Company has not experienced any losses in cash balances and does not believe it is exposed to any significant credit risk on its cash.

Foreign Exchange Risk

The Company is subject to foreign exchange risk for transactions denominated in foreign currencies. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar. The Company does not believe that it has any material risk due to foreign currency exchange.

Fair Value of Financial Instruments

On June 1, 2007, the Company adopted Accounting Standard 820 Fair Value Measurement and Disclosure (AS 820). AS 820 relates to financial assets and financial liabilities. AS 820 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. The adoption of AS 820, as it relates to financial assets and financial liabilities, had no impact on the Company’s financial statements.


AS 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in ASC 840. AS 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under AS 820 are described below:

Level 1 -

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

Level 2 -

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 -

Inputs that are both significant to the fair value measurement and unobservable.

The Company’s financial instruments include cash, accounts payable, accrued administrative fees, professional fees and advances payable. The fair value of these financial instruments approximates their carrying values due to their short maturities.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with Accounting Standard 830 Foreign Currency Matters (AS 830), using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Reclassifications
Certain prior period amounts in the accompanying financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the results of operations or financial position for any period presented.

Accounting Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


The Company’s financial statements are based on a number of estimates, including accruals for estimated professional fees.

Inventory

Inventory consists of finished goods and is valued at the lower of cost determined by a first-in, fist-out basis and net realizable value.

Revenue Recognition

The Company recognizes revenue from product sales when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. During the nine months ended February 28, 2011, the Company generated $41,073 in revenue from the sales of Artzer Z-Panels. The Company did not generate any revenue during the nine months ended February 28, 2010.

Comprehensive Income (Loss)

Comprehensive Income (loss) reflects changes in equity that result from transactions and economic events from non-owner sources. At February 28, 2011 and May 31, 2010, the Company has no items that represent a comprehensive income (loss) and, therefore, has not included a schedule of comprehensive income (loss) in the financial statements.

Basic and Diluted Net Loss Per Common Share (“EPS”)

Basic net loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted net income per common share includes the potential dilution that could occur upon exercise of the options and warrants to acquire common stock computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares which could have been repurchased by the Company with the proceeds from the exercise of the options and warrants (which were assumed to have been made at the average market price of the common shares during the reporting period).

Potential common shares are excluded from the diluted loss per share computation in net loss periods as their inclusion would be anti-dilutive.

At February 28, 2011, the Company had issued 42,550,000 common shares and had no outstanding options or warrants.

Stock-Based Compensation

In December 2004 Accounting Standard 718, Compensation – Stock Compensation (AS 718) was brought into effect. AS 718 eliminates the option to use the intrinsic value method of accounting and requires recording expense for stock compensation based on a fair value based method.


At February 28, 2011 the Company had issued 2,250,000 shares as stock compensation to its CFO, at a market value of $0.24 per share.

Recent Accounting Pronouncements

We do not expect the adoption of any new accounting pronouncements to have a material impact on our financial statements.

NOTE 3 – GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated approximately $41,000 in revenues since inception and has never paid any dividends and is unlikely to pay dividends in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. The Company’s ability to achieve and maintain profitability and positive cash flows is dependent upon its ability to generate revenues from its manufacturing and distribution business and control production costs. Based upon current plans, the Company expects to incur operating losses in future periods. At February 28, 2011, the Company had an accumulated deficit of $1,302,681 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There is no assurance that the Company will be able to generate sufficient revenues to cover operating costs in the future. These financial statements do not give any effect to any adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

NOTE 4 – CONSTRUCTION IN PROGRESS

The Company has made payments of $32,613 for welding process machinery, which has not been placed in service as of February 28, 2011. The payments are related to an asset purchase agreement the Company has executed with a related party (the related party is a Company controlled by an officer of the Company) (Note 5).

NOTE 5 - RELATED PARTY TRANSACTIONS

The following amounts were due to related parties:

    February 28,     May 31,  
    2011     2010  
             
Due to the President of the Company (b) $  325   $  325  
             
Due to the CFO of the Company (c), (f)   11,042     488  
             
Due to the VP of R&D (d)   10,734     -  
             
Due to a relative of a major shareholder (e)   2,289     -  
             
Total due to related parties (a) $  24,390   $  813  


(a) Amounts due to related parties are unsecured, bear no interest and are due on demand.
(b) During the nine months ended February 28, 2011, the Company paid the President $27,000 for consulting services he provided.
(c) During the nine months ended February 28, 2011, the Company paid the CFO $23,745 for consulting services he provided.
(d) During the nine months ended February 28, 2011, the Company paid the VP of Research & Development $20,000 pursuant to an asset purchase agreement. (Note 4)
(e) During the nine months ended February 28, 2011, the Company paid the relative of a major shareholder of the Company $13,000 for consulting services he provided.
(f) On January 18, 2011, 2,250,000 common shares were issued to the CFO at a deemed price of $0.24 per share as per an executive employment agreement. $540,000 was recorded as wages expense. (Note 6)

NOTE 6 - COMMON STOCK

On July 8, 2010, 500,000 common shares at $0.20 per share were issued for deposits received in May, 2010.

On July 8, 2010, 120,000 common shares were issued at $0.25 per share for cash of $30,000.

On July 29, 2010, 280,000 common shares were issued at $0.25 per share for cash of $70,000.

On August 2, 2010, 400,000 common shares were issued at $0.25 per share for cash of $100,000.

On January 18, 2011, 2,250,000 common shares were issued at a deemed price of $0.24 per share as per an executive employment agreement. $540,000 was recorded as wages expense (Note 5).

Common Stock Subscribed

On May 1, 2010, the Company agreed to issue 500,000 common shares valued at $105,000 or $0.21 per share as part of an employment agreement. The Company recorded the $105,000 as wages expense in the May 31, 2010 financial statements. As of the date of these financials statements, these shares have not been issued.


On October 10, 2010, the Company received a deposit of $49,000 for 245,000 shares at $0.20. As of the date of these financial statements, these shares have not been issued. (Note 8)

On November 9, 2010, the Company received a deposit of $38,000 for 190,000 shares at $0.20. As of the date of these financial statements, these shares have not been issued. (Note 8)

On December 9, 2010, the Company received a deposit of $5,000 for 25,000 shares at $0.20. As of the date of these financial statements, these shares have not been issued.

On December 22, 2010, the Company received a deposit of $18,000 for 90,000 shares at $0.20. As of the date of these financial statements, these shares have not been issued.

On January 13, 2011, the Company received a deposit of $10,000 for 50,000 shares at $0.20. As of the date of these financial statements, these shares have not been issued.

NOTE 7 - DISCONTINUED OPERATIONS

On May 17, 2010 the Company changed its focus from exploration of mineral properties, to manufacturing, marketing and distributing building products. The Company had the following losses from discontinued operations for the three and nine months ended February 28, 2010 and 2011.

Discontinued Operations:

    Three months ended     Nine months ended  
    February 28,     February 28,     February     February 28,  
    2011     2010     28, 2011     2010  
Administrative fees $  -   $  1,500   $  -   $  6,125  
Bank charges and interest   -     103     -     254  
Professional fees   -     2,655     -     14,542  
Regulatory   -     1,188     -     1,693  
Discontinued operations $  -   $  5,446   $  -   $  22,614  

NOTE 8 – SUBSEQUENT EVENTS

Subsequent to February 28, 2011, 245,000 common shares at $0.20 per share were issued for deposit received on October 10, 2010. (Note 6)

Subsequent to February 28, 2011, 190,000 common shares at $0.20 per share were issued for deposit received on November 9, 2010. (Note 6)


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking statements

This quarterly report contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. Some, but not all, of these risks include, among other things:

  • general economic conditions, because they may affect our ability to raise money,
  • our ability to raise enough money to continue our operations,
  • changes in regulatory requirements that adversely affect our business,
  • other uncertainties, all of which are difficult to predict and many of which are beyond our control.

We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this report. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common stock" refer to the common shares in our capital stock.

This discussion and analysis should be read in conjunction with our interim unaudited financial statements and related notes included in this Form 10-Q and the audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2010. The inclusion of supplementary analytical and related information herein may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Forza Environmental Building Products, Inc., unless otherwise indicated.

General Overview and Business Development over the Last Three Years

We were incorporated in the state of Nevada on May 26, 2006. On January 17, 2007, we acquired the Gate 1 Claim, a mineral claim in the Province of British Columbia. Until May 17, 2010 we were in the business of mineral exploration. Significant amounts of mineralization were not found and we decided to change our business focus.


The cost of the Gate 1 Claim charged to operations by Forza was $1,000, which represented the cost to acquire the Gate 1 Claim via a property agreement with Kenneth Ralfs.

On May 18, 2010, we announced that we had acquired the worldwide exclusive rights to manufacture, market and distribute the Artzer Z-Panel building product. The panels will be used for housing projects around the world. Our company intends to provide environmentally sound, energy-efficient materials for safe, sustainable shelter to disaster replacement building projects.

We have not been involved in any bankruptcy, receivership or similar proceedings. There have been no material reclassifications, mergers, consolidations or purchases or sales of a significant amount of assets not in the ordinary course of our business.

Results of Operations

Three months ended February 28, 2011 and 2010

Our operating results for the three months ended February 28, 2011 and 2010 and the changes between those periods are summarized as follows:

    Three months ended        
                Changes between  
                three months ended  
                February 28, 2011  
    February 28, 2011     February 28, 2010     and 2010  
Revenue                  
Sales $ 41,073   $  -   $ 41,073  
Cost of Goods Sold   (36,375 )   -     (36,375 )
Gross Profit   4,698     -     4,698  
                   
Operating Expenses                  
Administrative fees   13,500     -     13,500  
Bank charges and interest   671     -     671  
Consulting   23,042     -     23,042  
Entertainment   224     -     224  
Office   3,859     -     3,859  
Professional fees   4,685     -     4,685  
Regulatory   1,709     -     1,709  
Rent   5,100     -     5,100  
Travel   1,410     -     1,410  
Wages and salaries   563,084     -     563,084  
Discontinued operations   -     5,446     (5,446 )
Total operating expenses   617,284     5,446     611,838  
Net loss for the period $  (612,586 ) $  (5,446 ) $  (607,140 )


Revenues: During the three months ended February 28, 2011 we generated $4,698 in gross profits from the sales of Artzer Z-Panels.

A portion of this revenue was a result of the Agreement to Purchase contract which we entered into with an unrelated company on November 27, 2010. This contract is for the sale of up to 40,000 Artzer Z-Panels which we agreed to sell on an as needed basis at $50 per panel for a total of $2,000,000; it is in effect for two years.

We did not generate any revenue during the three months ended February 28, 2010.

Operating expenses: During the three months ended February 28, 2011, we have incurred $617,284 in operating expenses. These expenses were primarily caused by the change in direction of our business. There were increases in consulting expenses, office expenses, professional fees, regulatory fees, rent, administrative fees, travel and wages and salaries. Part of increase in wages and salaries was represented by $540,000 in stock based compensation to our former CFO, who we agreed to issue 2,250,000 restricted shares of common stock at $0.24 per share. All of these expenses increased in conjunction with setting up our new project of manufacturing, marketing and distributing the Artzer Z-Panel.

During the three months ended February 28, 2010 we have incurred $5,446 in operating expenses. These expenses are listed under discontinued operations and refer to expenses incurred while our focus was on the development of our Gate 1 mineral claim in Northern British Columbia.

Net Loss: During the three months ended February 28, 2011, our net loss increased from $5,446 for the three months ended February 28, 2010 to $612,586 for the three months ended February 28, 2011. The $607,140 or 11,148% increase was due to the change in direction of our business.

Nine months ended February 28, 2011 and 2010

Our operating results for the nine months ended February 28, 2011 and 2010 and the changes between those periods are summarized as follows:

    Nine months ended     Changes between  
                nine months ended  
                February 28,2011  
    February 28,2011     February 28,2010     and 2010  
Revenue:                  
Sales $ 41,073   $  -   $ 41,073  
Cost of Goods Sold   (36,375 )   -     (36,375 )
Gross Profit   4,698     -     4,698  
                   
Operating Expenses                  
Administrative fees   33,500     -     33,500  
Bank charges and interest   1,830     -     1,830  
Consulting   118,958     -     118,958  
Entertainment   1,383     -     1,383  
Office   19,623     -     19,623  
Professional fees   32,914     -     32,914  
Regulatory   5,401     -     5,401  
Rent   15,300     -     15,300  
Repairs and maintenance   855     -     855  
Travel   10,575     -     10,575  
Wages and salaries   711,964     -     711,964  
Discontinued operations   -     22,614     (22,614 )
Total operating expenses   952,303     22,614     929,689  
Net loss for the period $ (947,605 ) $ (22,614 ) $ (924,991 )


Revenues: During the nine months ended February 28, 2011, we generated $4,698 in gross profits from the sales of Artzer Z-Panels.

A portion of this revenue was a result of the Agreement to Purchase contract which we entered into with an unrelated company on November 27, 2010. This contract is for the sale of up to 40,000 Artzer Z-Panels which we agreed to sell on an as needed basis at $50 per panel for a total of $2,000,000; it is in effect for two years.

We did not generate any revenue during the nine months ended February 28, 2010.

Operating Expenses: During the nine months ended February 28, 2011, we have incurred $952,303 in operating expenses. These expenses were primarily caused by the change in direction of our business. There were increases in consulting expenses, office expenses, professional fees, regulatory fees, rent, administrative fees, travel and wages and salaries. Part of increase in wages and salaries was represented by $540,000 in stock based compensation to our former CFO, who we agreed to issue 2,250,000 restricted shares of common stock at $0.24 per share. All of these expenses increased in conjunction with setting up our new project of manufacturing, marketing and distributing the Artzer Z-Panel.

During the nine months ended February 28, 2010 we have incurred $22,614 in operating expenses. These expenses are listed under discontinued operations and refer to expenses incurred while our focus was on the development of our Gate 1 mineral claim in Northern British Columbia.

Net Loss: During the nine months ended February 28, 2011, our net loss increased from $22,614 for the nine months ended February 28, 2010 to $947,605 for the nine months ended February 28, 2011. The $924,991 or 4,090% increase was mainly due to the change in direction of our business.


Liquidity and Financial Condition

At February 28, 2011, we had a cash balance of $68 and negative cash flows from operations of $338,209. During the nine months ended February 28, 2011, we funded our operations with cash that we received from the sale of common stock.

Cash Flows

    As at  
    February 28,  
    2011     2010  
Net Cash Used In Operating Activities $  (338,209 ) $  (214 )
Net Cash Used In Investing Activities   (32,613 )   -  
Net Cash Provided by Financing Activities   320,000     -  
Decrease in Cash During the Period $  (50,822 ) $  (214 )

Net Cash Used in Operating Activities

Net cash used in operating activities during the nine months ended February 28, 2011, was $338,209. We used cash primarily to cover our net loss of $947,605. This use of cash was offset by a decrease in accounts receivable of $109 and increases in accounts payable and accrued liabilities of $33,210 and $10,576, respectively. Our advances payable and due to related parties also increased by $1,924 and $23,577, respectively. We have also recorded $540,000 in stock-based compensation to our former CFO, who resigned on March 18, 2011.

Net cash used in operating activities during the nine months ended February 28, 2010, was $214. We used cash primarily to fund our net loss related to discontinued operations of $22,614. Cash was also used to reduce accrued liabilities related to discontinued operations of $475. These uses were primarily offset by increases in accounts payable and advances payable to related parties related to discontinued operations of $4,804 and 18,075, respectively.

Net Cash Used in Investing Activities

During the nine months ended February 28, 2011, we spent $32,613 on construction in progress with respect to the installation of a panel welding machine.

We did not have any investing activities during the nine months ended February 28, 2010.

Net Cash Provided By Financing Activities

During the nine months ended February 28, 2011, $200,000 cash was provided through the sale of 800,000 shares at $0.25 per share; $120,000 cash was provided through subscription to purchase 600,000 shares at $0.20 per share.

During the nine months ended February 28, 2010 we did not have any financing activities.


Working Capital

    At     At  
    February 28,     May 31,  
    2011     2010  
Current assets $  68   $  50,999  
Current liabilities   (155,112 )   (85,825 )
Working capital $  (155,044 ) $  (34,826 )

Unproved Mineral Property

Gate 1 Claim

On December 15, 2006 we purchased the Gate 1 Claim near Atlin, British Columbia, Canada, comprising an area of 376.488 hectares for $1,000. The Gate 1 Claim is registered in the name of a former director and pursuant to a trust agreement is held in trust on our behalf.

At May 31, 2010, we had spent $21,058 on exploration work including a helicopter-supported magnetic survey on the Gate 1 Claim. On December 15, 2008, our company registered exploration work performed on its unproved mineral property with the Government of British Columbia, which allows our company to retain title to the claim until February 10, 2012.

Exploration of the property did not find significant mineralization and the claim was abandoned.

Challenges and Risks

On February 28, 2011, we had cash of $68. If we are to proceed with the manufacturing and marketing of the Artzer Z-Panel, we will have to raise additional funds to cover the costs associated with manufacturing and marketing of the panel.

Over the next 12 months, aside from the Agreement to Purchase contract, we do not anticipate generating any significant revenue and we expect our operating losses to be approximately $700,000. We anticipate that the additional funding required for operating activities will come from equity financing from the sale of our common stock, private loans or advances. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest. We do not have any financing arranged and cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or obtain private loans or advances to fund our manufacturing and marketing program. In the absence of such financing, our business will fail.

The start-up costs associated with manufacturing the Artzer Z-Panels will initially outpace the revenues received. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include, but are not limited to:


  • our ability to raise additional funding;
  • our ability to find markets for the Artzer Z-Panel;
  • our ability to control the costs in production of the Artzer Z-Panel.

Foreign Exchange

We are subject to foreign exchange risk for transactions denominated in foreign currencies. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar. We do not believe that we have any material risk due to foreign currency exchange.

Other Trends, Events or Uncertainties that may Impact Results of Operations or Liquidity Trends, Events, and Uncertainties

The economic crisis in the United States and the resulting economic uncertainty and market instability may make it harder for us to raise capital as and when we need it and have made it difficult for us to assess the impact of the crisis on our operations or liquidity. If we are unable to raise cash, we may be required to cease our operations. Other than as discussed in this annual report, we know of no other trends, events or uncertainties that have or are reasonably likely to have a material impact on our short-term or long-term liquidity.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

These financial statements have been prepared on a going concern basis, which implies our company will continue to realize its assets and discharge its liabilities in the normal course of business. Our company has generated only minimal revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from its shareholders, the ability of our company to obtain necessary equity financing to continue operations, confirmation of our company’s interests in the underlying properties, and the attainment of profitable operations. Our company’s ability to achieve and maintain profitability and positive cash flows is dependent upon its ability to manufacture and market the Artzer Z-Panels. Based upon current plans, our company expects to incur operating losses in future periods. At February 28, 2011, our company had an accumulated deficit of $1,302,681 since inception. These factors raise substantial doubt regarding our company’s ability to continue as a going concern. There is no assurance that our company will be able to generate revenues in the future. These financial statements do not give any effect to any adjustments that would be necessary should our company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.


Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Contingencies and Commitments

We had no commitments or contingencies at February 28, 2011.

Internal and External Sources of Liquidity

To date, we have funded our operations from the sale of our common stock and from advances from an unrelated party.

Recently Adopted and Recently Issued Accounting Standards

We do not expect the adoption of any new accounting pronouncements to have a material impact on our financial statements.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.

Cash and Cash Equivalents

For purposes of the balance sheet and statement of cash flows, our company considers all amounts on deposit with financial institutions and highly liquid investments with maturities of 90 days or less to be cash equivalents. At February 28, 2011 and May 31, 2010, our company did not have any cash equivalents.

Financial Instruments

Concentration of Credit Risk

Financial instruments that potentially subject our company to significant concentrations of credit risk consist principally of cash. At February 28, 2011 and May 31, 2010 our company had $20 and $500, respectively, in cash that was not insured. This cash was held by our former CFO. Our company has not experienced any losses in cash balances and does not believe it is exposed to any significant credit risk on its cash.


Foreign Exchange Risk

Our company is subject to foreign exchange risk for transactions denominated in foreign currencies. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar. Our company does not believe that it has any material risk due to foreign currency exchange.

Fair Value of Financial Instruments

On June 1, 2007, our company adopted Accounting Standard 820 Fair Value Measurement and Disclosure (AS 820). AS 820 relates to financial assets and financial liabilities. AS 820 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. The adoption of AS 820, as it relates to financial assets and financial liabilities, had no impact on our company’s financial statements.

AS 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in ASC 840. AS 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under AS 820 are described below:

Level 1 -

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 -

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 -

Inputs that are both significant to the fair value measurement and unobservable.

Our company’s financial instruments include cash, deposit receivable, accounts payable, accrued administrative fees, professional fees and advances payable. The fair values of these financial instruments approximate their carrying values due to their short maturities.


Foreign Currency Translation

Our company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with Accounting Standard 830 Foreign Currency Matters (AS 830), using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. Our company has not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Inventory

Inventory consists of finished goods and is valued at the lower of cost determined by a first-in, fist-out basis, and net realizable value.

Revenue Recognition

The Company recognizes revenue from product sales or services rendered when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured.

Accounting Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Our company’s financial statements are based on a number of estimates, including accruals for estimated administrative and professional fees.

Comprehensive Income (Loss)

Comprehensive Income (loss) reflects changes in equity that result from transactions and economic events from non-owner sources. At February 31, 2011 and May 31, 2010, our company had no items that represented a comprehensive income (loss) and, therefore, did not include a schedule of comprehensive income (loss) in the financial statements.

Basic and Diluted Net Loss Per Common Share (“EPS”)

Basic net loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted net income per common share includes the potential dilution that could occur upon exercise of the options and warrants to acquire common stock computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares which could have been repurchased by our company with the proceeds from the exercise of the options and warrants (which were assumed to have been made at the average market price of the common shares during the reporting period).


Potential common shares are excluded from the diluted loss per share computation in net loss periods as their inclusion would be anti-dilutive.

At February 28, 2011, our company had issued 42,550,000 common shares and had no outstanding options or warrants.

Common Stock

On July 8, 2010 our company issued 250,000 shares for the $50,000 deposit that was received on May 13, 2010.

On July 8, 2010 our company issued 250,000 shares for the $50,000 deposit that was received on May 27, 2010.

On July 8, 2010 our company issued 120,000 shares at $0.25 per share for proceeds of $30,000.

On July 29, 2010 our company issued 280,000 shares at $0.25 per share for proceeds of $70,000.

On August 2, 2010 our company issued 400,000 shares at $0.25 per share for proceeds of $100,000.

On October 10, 2010, a deposit of $49,000 was received for 245,000 common shares subscribed, at $0.20 per share. These shares were issued subsequent to February 28, 2011.

On November 9, 2010, a deposit of $38,000 was received for 190,000 common shares subscribed, at $0.20 per share. These shares were issued subsequent to February 28, 2011.

On December 3, 2010, the Company agreed to issue 2,250,000 common shares valued at $540,000 or $0.24 per share as part of an employment agreement. These shares were issued on January 18, 2011.

On December 9, 2010, the Company received a deposit of $5,000 for 25,000 shares at $0.20. As of the date of the filing of these financials statements, these shares have not been issued.

On December 22, 2010, the Company received a deposit of $18,000 for 90,000 shares at $0.20. As of the date of the filing of these financials statements, these shares have not been issued.

On January 13, 2011, the Company received a deposit of $10,000 for 50,000 shares at $0.20. As of the date of the filing of these financials statements, these shares have not been issued.


Stock-Based Compensation

In December 2004 Accounting Standard 718, Compensation – Stock Compensation (AS 718) was brought into effect. AS 718 eliminates the option to use the intrinsic value method of accounting and requires recording expense for stock compensation based on a fair value based method.

On December 3, 2010, the Company agreed to issue 2,250,000 common shares valued at $540,000 or $0.24 per share as stock-based compensation pursuant to an employment agreement. These shares were issued on January 18, 2011.

Item 3. Quantitative Disclosures About Market Risks

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our chief financial officer (also our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of February 28, 2011, the end of our third quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer) of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (also our principal executive officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

Our common shares are considered speculative as our business is still in an early growth stage of its development. Prospective investors should consider carefully the risk factors set out below.

Because our auditors have issued a going concern opinion, there is substantial uncertainty we will continue activities in which case you could lose your investment.

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. As such we may have to cease activities and you could lose your investment.

We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease activities.

We were incorporated on May 26, 2006 and have realized only minimal revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our net loss from inception of development stage to February 28, 2011 is $975,654. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:


  • our ability to market the Artzer Z-PanelTM

  • our ability to generate revenues

  • our ability to control production costs of the Artzer Z-PanelTM

Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the startup of manufacturing and marketing programs. As a result, we may not generate revenues in the future. Failure to generate revenues will cause us to suspend or cease activities.

Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Our common shares are currently listed for public trading on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management’s attention and resources.

Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.


The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.

FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.


Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

Exhibit Description
(3)

Articles of Incorporation and Bylaws

3.1

Articles of Incorporation (incorporated by reference to our registration statement on Form SB-2 filed on August 16, 2007).

3.2

By-Laws (incorporated by reference to our registration statement on Form SB-2 filed on August 16, 2007).

3.3

Articles of Merger (incorporated by reference from our Current Report on Form 8-K filed on August 3, 2010).

(10)

Material Contracts

10.1

Property agreement dated December 15, 2006 between Kenneth Ralfs and Feliberto Gurat as Trustee for Forza (incorporated by reference to our registration statement on Form SB-2 filed on August 16, 2007).

10.2

Trust agreement dated January 17, 2007 (incorporated by reference to our registration statement on Form SB-2 filed on August 16, 2007).

10.3

Executive Employment Agreement dated May 1, 2010 between Paul J. Artzer (incorporated by reference from our Current Report on Form 8-K filed on June 24, 2010).

10.4

Agreement and Plan of Merger dated July 12, 2010. (incorporated by reference from our Annual Report on Form 10-K filed on September 14, 2010)

10.5

Letter of Intent with MALAMA Composites, LLC, dated September 15, 2010 (incorporated by reference from our Current Report on Form 8-K filed on September 17, 2010)

10.6

Agreement to Purchase dated November 27, 2010. (incorporated by reference from our Current Report on Form 8-K filed on December 1, 2010).

10.7

Executive Employment Agreement dated December 3, 2010 between Michael Lee and the Company.

(14)

Code of Ethics

14

Financial Code of Ethics (incorporated by reference to our registration statement on Form SB-2 filed on August 16, 2007).

(31)

Section 302 Certifications

31.1*

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Charles Thompson Slay.

(32)

Section 906 Certification

32.1*

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Charles Thompson Slay.

* Filed herewith


SIGNATURES

Pursuant to the requirements of 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, thereunto duly authorized.

  FORZA ENVIRONMENTAL BUILDING PRODUCTS, INC.
                                                                                               (Registrant)
   
Dated: April 19, 2011 /s/ Charles Thompson Slay
  Charles Thompson Slay
  President, Secretary and director
  (Principal Executive Officer, Principal Financial Officer
  and Principal Accounting Officer)