PDFs are created on our servers, the client library on your machine just calls our online API and passes it an URL to create PDF. The URL must be publicly accessible so that our service can load it. Since your web page is served by "
localhost", which is not accessible outside of your machine, the service returns an error.
Another thing is that you should use the convertURI() method:
$pdf = $client->convertURI('http://app.domain.com/myfolder/report.php?begin=1/1/12&end=1/31/12');
convertFile() converts a local file on your machine, not an URL.