UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the quarterly period ended June 30, 2008 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from , 20 , to , 20 . | |
Commission File Number |
American Fiber Green Products, Inc.
(Exact Name of Registrant as Specified in its Charter)
NEVADA | 91-1705387 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
1618 51st South, Tampa, FL 33619
(Address of Principal Executive Offices)
(813) 247-2770
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(g) of the Act:
$.001 par value preferred stock | Over the Counter Bulletin Board | ||
$.001 par value common stock | Over the Counter Bulletin Board |
Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ¨
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
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 NO
Transitional Small Business Disclosure Format (check one): Yes ¨ No x
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
There were 10,694,053 shares of the Registrant’s $.001 par value common stock outstanding as of June 30, 2008.
Table of Contents
FORM 10-Q - - INDEX
Part I FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Consolidated Condensed Balance Sheets | 2 | |
Consolidated Condensed Statements of Operations | 3 | |
Consolidated Condensed Statement of Changes in Stockholders’ Deficit | 4 | |
Consolidated Condensed Statements of Cash Flows | 5 | |
Notes to Consolidated Condensed Financial Statements | 6 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Plan of Operation | 13 |
Item 3. | Quantitative and Qualitative Disclosures about Market | 16 |
Item 4(T). | Controls and Procedures | 16 |
Part II OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 18 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 18 |
Item 3. | Defaults Upon Senior Securities | 18 |
Item 4. | Submission of Matters to a Vote of Security Holders | 18 |
Item 5. | Other Information | 18 |
Item 6. | Exhibits and Reports on Form 8K | 18 |
Signatures | 19 | |
Certifications |
American Fiber Green Products, Inc.
PART I—FINANCIAL INFORMATION
Statements in this Form 10Q Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10Q Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission.
In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10Q Quarterly Report, except as required by law.
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ITEM 1. | FINANCIAL STATEMENTS |
American Fiber Green Products, Inc.
Consolidated Condensed Balance Sheets
June 30, 2008 | December 31, 2007 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | — | $ | 72 | ||||
Other receivables, net | 31,213 | 24,343 | ||||||
Total current assets | 31,213 | 24,415 | ||||||
Notes receivable, net | 98,405 | 98,405 | ||||||
Machinery, Equipment and Tooling, net of Accumulated Depreciation of $15,000 and $17,500 | 30,000 | 32,500 | ||||||
Total Assets | $ | 159,618 | $ | 155,320 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 378,966 | $ | 347,788 | ||||
Accrued expenses | 2,450 | — | ||||||
Subscription payable | 10,000 | 10,000 | ||||||
Total current liabilities | 391,416 | 357,788 | ||||||
Notes payable to shareholders | 308,035 | 334,035 | ||||||
Deferred wages | 645,547 | 608,397 | ||||||
Accrued interest payable | 578,218 | 566,456 | ||||||
Other payables, related parties | 224,191 | 221,542 | ||||||
Total Liabilities | 2,147,407 | 2,088,218 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common stock, $.001 par value; 350,000,000 shares authorized; 10,694,053 (June 30, 2008) and 9,249,628 (December 31, 2007) shares issued and outstanding | 10,694 | 9,250 | ||||||
Additional paid in capital | 2,390,287 | 2,318,510 | ||||||
Accumulated deficit | (4,388,770 | ) | (4,260,658 | ) | ||||
Total stockholder’s deficit | (1,987,789 | ) | (1,932,898 | ) | ||||
Total Liabilities and Stockholders’ Deficit | $ | 159,618 | $ | 155,320 | ||||
The accompanying notes are an integral part of the financial statements.
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American Fiber Green Products, Inc.
Consolidated Condensed Statements of Operations
Unaudited
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Other income (expense): | ||||||||||||||||
Marketing, general and administrative expenses | $ | 39,923 | $ | 44,596 | $ | 74,445 | $ | 85,180 | ||||||||
Interest expense | 29,602 | 27,954 | 60,673 | 55,255 | ||||||||||||
Interest income | (3,041 | ) | (2,404 | ) | (7,006 | ) | (5,021 | ) | ||||||||
Total other income (expense) | (66,484 | ) | (70,146 | ) | (128,112 | ) | (135,414 | ) | ||||||||
Income (loss) before income taxes | (66,484 | ) | (70,146 | ) | (128,112 | ) | (135,414 | ) | ||||||||
Income taxes | — | — | — | — | ||||||||||||
Net income (loss) | $ | (66,484 | ) | $ | (70,146 | ) | $ | (128,112 | ) | $ | (135,414 | ) | ||||
Basic and diluted income (loss) per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Basic and diluted weighted average number of common shares outstanding | 10,474,423 | 9,219,628 | 9,862,025 | 9,210,724 | ||||||||||||
The accompanying notes are an integral part of the financial statements.
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American Fiber Green Products, Inc.
Consolidated Condensed Statements of Changes in Stockholders’ Deficit
For the year ended December 31, 2007 and for the Six Months Ended June 30, 2008
Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Total | ||||||||||||||||
Balance, December 31, 2006 | 9,199,228 | $ | 9,200 | $ | 2,279,800 | $ | (3,983,796 | ) | $ | (1,694,796 | ) | |||||||||
Issuance of common stock for cash | 20,400 | 20 | 13,240 | 13,260 | ||||||||||||||||
Issuance of common stock for services | 30,000 | 30 | 25,470 | 25,500 | ||||||||||||||||
Net loss | (276,862 | ) | (276,862 | ) | ||||||||||||||||
Balance, December 31, 2007 | 9,249,628 | 9,250 | 2,318,510 | (4,260,658 | ) | (1,932,898 | ) | |||||||||||||
Issuance of common stock for payment of a note payable and accrued interest (unaudited) | 1,444,425 | 1,444 | 71,777 | 73,221 | ||||||||||||||||
Net loss for the six months ended June 30, 2008 (unaudited) | (128,112 | ) | (128,112 | ) | ||||||||||||||||
Balance, June 30, 2008 (unaudited) | 10,694,053 | $ | 10,694 | $ | 2,390,287 | $ | (4,388,770 | ) | $ | (1,987,789 | ) | |||||||||
The accompanying notes are an integral part of the financial statements.
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American Fiber Green Products, Inc.
Consolidated Condensed Statements of Cash Flows
For the Six Months Ended June 30, 2008 and 2007
2008 | 2007 | |||||||
Operating activities | ||||||||
Net loss | $ | (128,112 | ) | $ | (135,414 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Depreciation | 2,500 | 2,500 | ||||||
Increase (decrease) in: | ||||||||
Prepaid expenses | — | 14,000 | ||||||
Interest receivable, related parties | ( 6,871 | ) | (4,681 | ) | ||||
Accounts payable and accrued expenses | 33,629 | 27,949 | ||||||
Increase in interest payable to shareholders | — | 54,000 | ||||||
Deferred compensation | 37,150 | 33,255 | ||||||
Net cash used by operating activities | (61,704 | ) | (8,391 | ) | ||||
Investing activities | ||||||||
Increase in notes receivable | 11,761 | (14,950 | ) | |||||
Net cash used by investing activities | 11,761 | (14,950) | ||||||
Financing activities | ||||||||
Issuance of common stock | 73,221 | 13,260 | ||||||
Proceeds from issuance of notes payable | 2,650 | — | ||||||
Payments from issuance of notes payable | (26,000 | ) | 10,000 | |||||
Net cash provided by financing activities | 49,871 | 23,260 | ||||||
Net decrease in cash | (72 | ) | (81 | ) | ||||
Cash at beginning of year | 72 | 81 | ||||||
Cash at end of year | $ | — | $ | — | ||||
The accompanying notes are an integral part of the financial statements.
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Notes to Consolidated Condensed Financial Statements
As of June 30, 2008 and for the
Three and Six Month Periods Ended June 30, 2008 and 2007
NOTE 1 - ORGANIZATION AND BUSINESS
American Fiber Green Products, Inc. (AFGP) came into existence as a result of the following transactions:
In March of 1993, William Amour founded Amour Hydro Press, Inc. (AHP) to conduct research and development to commercialize proprietary technology that would allow the Company to process waste fiberglass and resins into new commercially viable products.
In January of 1996 the Board of Directors authorized the merger of AHP with Amour Fiber Core, Inc. a Washington corporation. Each common share of Amour Hydro Press, Inc. was exchanged for 280 common shares of Amour Fiber Core, Inc. The authorized shares of Amour Fiber Core, Inc. were 5,000,000 shares. The company operated under this configuration until June 1998 when the Board of Directors approved a three for one forward split (3:1) increasing the authorized shares from 5,000,000 to 15,000,000 common shares. Amendments to the Articles of Incorporation were filed with the State of Washington. Although approved and recorded, the 3:1 forward split was not reported to the transfer agent of the Company. The resulting change in common stock was from 3,675,996 to 11,027,988 common shares issued and outstanding.
Within months of these actions, William Amour, founder and driving force behind the business was diagnosed with cancer and died in 1999. Attempts by the board to continue the operation of Amour Fiber Core, Inc. resulted in substantially more debt and ultimately the cessation of operations. The value of the company was in the exclusive rights to the proprietary technology, as well as the resources developed to source raw material and vendors and the ability to create viable products from waste material. There were 884 shareholders of record at the time of William Amour’s passing and they remained committed to the success of the Company. The Company ceased operations in January 2000, however, management continued to search for investors to be able to restart production.
On September 15, 2001, after several months of discussion and negotiations, Kenneth McCleave incorporated American Leisure Products, Inc. a Florida corporation, of which he was the sole shareholder of the 100,000 issued and outstanding shares for the purpose of merger with Amour Fiber Core, Inc. The terms and conditions of said merger included Mr. McCleave’s assistance in resolution of a number of problems restricting Amour. Litigation with the landlord and disgruntled note holders threatened the collapse of the Company unless amicable resolution was achieved. The terms of the merger were established and the concerns were resolved over the subsequent 24 months.
In May of 2004, following appropriate shareholder consent and board action, Amour Fiber Core, Inc. (Washington) merged with a newly formed Nevada corporation of the same name and with the same issued and outstanding shares 11,027,988. Amour Fiber Core, Inc. (Nevada) has authorized 350,000,000 common and 5,000,000 preferred shares.
On May 24, 2004, Amour Fiber Core, Inc. (Nevada) then entered into an Agreement and Plan of Merger with American Leisure Products, Inc., a Florida corporation with a total issued and outstanding 100,000 common shares. A 1:6 reverse split of the Amour Fiber Core, Inc. shares held by the AFC shareholders reduced the issued and outstanding common shares of AFC (Nevada) from 11,027,988 to 1,837,998. The merger called for each share of ALP to convert to 73.52 shares of Amour Fiber Core, Inc. (Nevada). The sole shareholder of ALP received 7,352,000 shares of Amour Fiber Core, Inc. (Nevada) in the merger (i.e. a conversion ratio of 73.52:1). Following this transaction, Amour Fiber Core, Inc. (Nevada) had 9,189,998 shares outstanding.
- 6 - -
Following this merger and in keeping with the Shareholder Consent and subsequent board action, the name of Amour Fiber Core, Inc. (Nevada) was changed to American Fiber Green Products, Inc. American Leisure Products, Inc. (a Florida corporation) became a wholly owned subsidiary of American Fiber Green Products, Inc. The assets and opportunities of American Fiber Green Products, Inc. (f/k/a Amour Nevada and Amour Washington) were moved to a newly formed, Amour Fiber Core, Inc., (a Florida Corporation) as a wholly owned subsidiary. The resulting structure is American Fiber Green Products, Inc. (Nevada) holding 100% of the stock of American Leisure Products, Inc. (Florida) and Amour Fiber Core, Inc. (Florida).
NOTE 2 - GOING CONCERN
The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue as a going concern. The Company’s continued existence is dependent upon the Company’s ability to obtain additional debt and/or equity financing. The Company has incurred losses since inception and, the Company has not generated any revenues from its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company will begin construction of a plant upon funding and expects to complete the project and to begin production within the next 18 months. Although the cost of construction has not been quantified, the Company estimates the cost to be approximately $250,000 per plant unit. Management plans to raise additional funds through the sale of sub-licensing agreements, project financings or through future sales of their common stock, until such time as the Company’s revenues are sufficient to meet its cost structure, and ultimately achieve profitable operations. There is no assurance that the Company will be successful in raising additional capital or achieving profitable operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the activity of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
The preparation of consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates.
For purpose of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Inventory is valued at the lower of cost or market. All inventory will be evaluated periodically for excess amounts on hand and obsolescence. If necessary, appropriate reserves will be established.
Property and equipment are stated at cost and are depreciated over their estimated useful lives. Depreciation is currently recorded as Marketing, General and Administrative expense. At such time as assets are transferred to revenue generating production, their associated depreciation will be recorded as Cost of Sales. Property and equipment consist of mold tooling with estimated useful lives of 3 - 10 years.
The Company recognizes revenues from 1) tipping fees in the acquisition of scrap fiberglass, 2) sale of products produced with reclaimed fiberglass, 3) fees charged for licensing and installation of the proprietary reclamation and manufacturing processes, 4) royalties charged to licensees for revenues generated by using our licensed processes, and 5) sales of other fiberglass products (reproduction cars, boats). Revenue is recorded when products and services are provided to the customer.
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Project development costs are expensed as incurred. The cost of equipment that will be acquired or constructed for project development activities, and that have alternative future uses, both in project development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives. To date, project development costs include the development, engineering, and marketing expenses related to the Company’s fiberglass reclamation process and associated product development.
The Company accounts for income taxes in accordance with FASB Statement No. 109 “Accounting for Income Taxes.” SFAS No. 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carry forwards.
In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48), effective for fiscal years beginning after December 15, 2006. FIN 48 requires a two-step approach to determine how to recognize tax benefits in the financial statements where recognition and measurement of a tax benefit must be evaluated separately. A tax benefit will be recognized only if it meets a “more-likely-than-not” recognition threshold. For tax positions that meet this threshold, the tax benefit recognized is based on the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the taxing authority. We are currently evaluating the impact of adopting FIN 48, and have not yet determined the significance of this new rule to our overall results of operations, cash flows or financial position.
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that included the enactment date.
The fair value of financial instruments approximated their carrying values at June 30, 2008. The financial instruments consist of cash, interest receivable, notes receivable, accounts payable and notes payable.
The Company presents basic loss per share (“EPS”) and diluted EPS on the face of the consolidated statement of operations. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. As of June 30, 2008, there were no dilutive instruments outstanding. Restricted shares are considered outstanding and included in the computation of both the basic and fully diluted earnings per share computations. Common stock that is restricted until certain conditions have been met are only included in the per share computation once the condition has been satisfied. At June 30, 2008 and 2007, there were no shares that were considered restricted.
The Company’s operations are subject to production of a new processing technology. Significant technical and regulatory changes can have a dramatic effect on product opportunities. Design and development of new processes are critical elements to achieve and maintain profitability in the Company’s new industry segment.
The Company may be subject to federal, state and local environmental laws and regulations. The Company does not anticipate expenditures to comply with such laws and does not believe that regulations will have a material impact on the Company’s financial position, results of operations, or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state, and local environmental laws and regulations.
In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of SFAS No. 157 to materially impact its financial statements.
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Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
NOTE 4 - NOTES RECEIVABLE
The Company has made loans to several companies, both owned by officers and stockholders of the Company and to unrelated parties. The purpose of these loans was to invest in other fiberglass manufacturing businesses in order to facilitate the development and production of fiberglass products. The Company expects repayment of these amounts to occur during the next 12 months.
Notes receivable are made up of the following:
Note receivable, related party, 10% interest, due May 12, 2004 (past maturity) | $ | 6,000 | |||
Note receivable, related party, 10% interest, due April 30, 2005 (past maturity) | 52,452 | ||||
Note receivable, related party, 10% interest, due April 22, 2005 (past maturity) | 20,253 | ||||
Note receivable, related party, 8% interest, due April 20, 2008 (past maturity) | 14,700 | ||||
Note receivable, unrelated party, 8% interest, due August 8, 2008 | 5,000 | ||||
$ | 98,405 | ||||
The above related party transactions are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company entered into an employment agreement with a key employee. The employment agreement is for a period of three years, with prescribed percentage increases beginning in 2007 and can be cancelled upon a written notice by either employee or employer (if certain employee acts of misconduct are committed). The total annual payment under the employment agreement is $60,000.
The Company anticipates that it will enter into employment contracts with two other key employees in 2008 under similar terms and conditions. Specifics will be determined by the Compensation Committee and approved by the Board of Directors.
The Company entered into an agreement with three individuals to join the Company’s board of directors. Directors will be reimbursed for actual expenses incurred while performing their duties. Under the terms of the agreement the individuals will receive no other compensation, although this may change in the future.
NOTE 6 - STOCKHOLDERS’ EQUITY
Founder Shares
In May 2004, the Board of Amour Fiber Core, Inc., a Washington corporation, approved to reincorporate Amour in Nevada and reduce the number of shares outstanding. It merged into a newly organized Nevada corporation (also named “Amour Fiber Core, Inc.”), and each share of Amour Fiber Core, Inc. (Washington) was converted into 1/6 of a share of Amour Fiber Core, Inc. (Nevada). As a result, the surviving corporation, Amour Fiber Core, Inc. (Nevada) has a total of 1,837,998 shares outstanding. Amour Fiber Core Inc. (Nevada) has 350 million shares of Common Stock authorized and 5 million shares of “blank check” preferred authorized.
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On May 24, 2004, Amour Fiber Core, Inc. (Nevada) then entered into an Agreement and Plan of Merger with American Leisure Products, Inc., a Florida corporation with a total issued and outstanding 100,000 common shares. The 1:6 reverse split of the Amour Fiber Core, Inc. shares held by the AFC shareholders reduced the issued and outstanding common shares of AFC (Nevada) from 11,027,988 to 1,837,998. The merger called for each share of ALP to convert to 73.52 shares of Amour Fiber Core, Inc. (Nevada). The sole shareholder of ALP received 7,352,000 shares of Amour Fiber Core, Inc. (Nevada) in this reverse merger. Following the transaction, Amour Fiber Core, Inc. (Nevada) had 9,189,998 shares outstanding. The assets of ALP (Tooling) were added to the assets of AFC in a purchase transaction with a corresponding capital contribution amount of $50,000 recorded as Additional Paid-In Capital.
At the time of this reverse merger, in accordance with SFAS 141 ¶17, the smaller combining entity (ALP), a) holds a majority of the voting rights, (80.0%) of the combined company (AFC) common shares outstanding; and b) comprises the senior management of the combined company.
Merger Costs
In connection with the merger of Amour and American Leisure Products, the Company incurred legal costs of $30,818. The costs have been treated as administrative expense in the period incurred.
Acquisition Share Distribution
In April, 2008, the sole shareholder of ALP (PAC – Public Acquisition Corporation) distributed 100% of its holdings (7,352,000 shares) as follows:
Ken McCleave – Chairman of AFBG | 3,449,520 shares | ||
Dan Hefner – President of AFBG | 1,601,240 shares | ||
Robert Maxwell – Chairman AACS | 1,601,240 shares | ||
All others as a whole (7) | 700,000 shares | ||
Total shares distributed | 7,352,000 shares |
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company is currently operating in a facility leased and operated by Affordable Fiberglass Group (AFG). AFG is owned by Ken McCleave, Chairman of AFGP. No occupancy cost has been charged to AFGP by AFG as of June 30, 2008. There is no assurance that this favorable treatment will continue in the future if AFGP begins to facilitate operations at that site.
The above related party transactions are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties.
NOTE 8 - DEFERRED WAGES
The Company has accrued salaries owed to four individuals. Two of the individuals’ employment contracts are expired. All balances due are fixed without any interest or other escalating cost. The Company does not expect to make any payments on these deferred wages during the next twelve months, and therefore the balances are classified as non-current.
• | Barb Amour |
• | Accrued Salary: $ 110,575 |
• | Les Amour |
• | Accrued Salary $ 49,500 |
Salaries have been accrued for Ken McCleave (Chmn.) and Kristal McCleave (office manager). Mr. McCleave’s salary continues to accrue at a rate of $5,000 per month. Ms. McCleave’s salary continues to accrue at $275 per week. The Company does not expect to make any payments on these deferred wages during the next twelve months, and therefore the balances are classified as non-current. Following are accrued salary balances as of June 30, 2008:
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• | Kenneth McCleave |
• | Accrued Salary $ 392,655 |
• | Kristal McCleave |
• | Accrued Salary $ 92,817 |
NOTE 9 - NOTES PAYABLE
The Company carries notes payable to the following individuals:
Robert Chlipala | $ | 133,000 | |||
Gerald Rau | $ | 101,500 | |||
Les Smyth | $ | 60,000 | |||
Ken McCleave | $ | 1,535 |
Note payable to: | Note amount: | Note date: | Interest rate: | |||||
Rau | $ | 101,500 | 4/1/2000 | 8.75 | % | |||
Rau - $6,000 note converted to stock in Apr. 2008 | $ | 0 | 7/30/2003 | 0.00 | % | |||
Smyth | $ | 30,000 | 9/15/1998 | 14.00 | % | |||
Smyth | $ | 10,000 | 6/8/1999 | 14.00 | % | |||
Smyth | $ | 10,000 | 6/14/1999 | 14.00 | % | |||
Smyth | $ | 10,000 | 7/1/1999 | 14.00 | % | |||
Smyth - $10,000 note converted to stock in Apr. 2008 | $ | 0 | 8/2/1999 | 14.00 | % | |||
Smyth - $10,000 note converted to stock in Apr. 2008 | $ | 0 | 9/15/1999 | 14.00 | % | |||
Chlipala | $ | 100,000 | 6/4/1998 | 10.50 | % | |||
Chlipala | $ | 18,000 | 7/10/1999 | 10.50 | % | |||
Chlipala | $ | 15,000 | 12/11/1999 | 0.00 | % | |||
McCleave | $ | 1,535 | 4/8/2005 | 10.00 | % |
In June, 2005, by unanimous approval of the Board of Directors, all notes were recognized as payable and due with interest to be calculated on a compounded basis. The full accumulation of interest payable was recorded as accrued interest expense in June, 2005. Interest expense has been accrued monthly since that date.
Interest accrued on the above notes per individual is as follows
6/30/2008 | 6/30/2007 | ||||||||
Rau | $ | 95,304 | $ | 79,937 | |||||
Smyth | $ | 161,725 | $ | 173,442 | |||||
Chlipala | $ | 214,607 | $ | 181,591 | |||||
McCleave | $ | 1,515 | $ | 1404 |
In April, 2008, three notes were converted to 1,444,425 shares of AFGP common stock; a non-interest bearing note for Rau (face amount of $6,000) and two interest bearing notes for Smyth (face value of $10,000 each bearing 14% interest with total accumulated interest at conversion of $47,221). These transactions reduced notes payable by $26,000 and interest payable by $47,221.
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NOTE 10 - OTHER PAYABLES, RELATED PARTIES
Long-term payables are due to PAC (Public Acquisition Company – a wholly owned business of Kenneth McCleave), Nimble Boat Works (a wholly owned business of Kenneth McCleave), Daniel L. Hefner (President and Chief Operating Officer of AFGP) for cash advances made to AFGP.
Due to PAC | $ | 221,148 | |||
Due to Nimble Boat Works | $ | 2,094 | |||
Due to Dan Hefner | $ | 950 |
Company loans payable to PAC in the amount of $214,670, included above, bear interest as follows. This portion of the loans is associated primarily with the acquisition of Amour Fiber Core.
Note payable to: | Note amount: | Note date: | Interest rate: | |||||
Loan From PAC | $ | 74,518 | 5/14/2004 | 10.00 | % | |||
Loan From PAC | $ | 49,550 | 7/29/2004 | 10.00 | % | |||
Loan From PAC | $ | 20,300 | 8/20/2004 | 10.00 | % | |||
Loan From PAC | $ | 60,610 | 12/28/2004 | 10.00 | % | |||
Loan From PAC | $ | 9,692 | 11/6/2003 | 10.00 | % |
In June, 2005, by unanimous approval of the Board of Directors, these were recognized as payable and due with interest to be calculated on a compounded basis. The full accumulation of interest payable was recorded as accrued interest expense in June, 2005. Interest expense has been accrued monthly since that date.
Interest accrued on the above loans is as follows:
6/30/2008 | 6/30/2007 | ||||||||
PAC | $ | 101,896 | $ | 72,007 |
NOTE 11 - INCOME TAXES
The Company has incurred significant operating losses since its inception and, therefore, no tax liabilities have been incurred for the periods presented. The amount of unused tax losses available to carry forward and apply against taxable income in future years totaled approximately $2,805,894. The loss carry forwards begin to expire in 2013, 20 years after inception. Due to the Company’s continued losses, management has established a valuation allowance equal to the amount of deferred tax asset because it is more likely than not that the Company will not realize this benefit.
In addition, the Company expects that Amour is not current in their federal and state income tax filings. The Company has not determined how delinquent the tax filings are. However, the effect of non-filing is not expected to be significant as Amour has not had active operations or income for a significant period of time.
Temporary differences affecting the deferred tax asset are as follows:
Accumulated deficit | $ | 4,388,770 | |||
Difference between tax and book value for accrued interest and deferred wages | (1,223,765) | ||||
Other | (359,111 | ||||
2,805,894 | |||||
Valuation allowance | (2,805,894) | ||||
$ | 0 | ||||
The valuation allowance increased by $54 during the quarter ended June 30, 2008.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION |
THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.
The following discussion and analysis should be read in conjunction with “Selected Financial Data” and our financial statements and related notes thereto included elsewhere in this registration statement. Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this registration statement should be read as applying to all related forward-looking statements wherever they appear in this registration statement. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause our actual results to differ materially from those anticipated include those discussed in “Risk Factors,” “Business” and “Forward-Looking Statements.”
General Overview
American Fiber Green Products, Inc.
From its inception, American Fiber Green Products, Inc. (f/k/a Amour Hydro Press, Inc; Amour Fiber Core, Inc. [Washington]; Amour Fiber Core, Inc. [Nevada]) has had a focus on the production of Fiberglass Reinforced Plastic (FRP) products to take to market, beginning with the patented recycling technology developed by William Amour, the Company’s founder. After spending millions of dollars on research and development and proving that the technology could, in fact, recycle fiberglass waste and produce superior fiberglass products, the Company was forced to suspend operations due to the death of Mr. Amour in 1999. Several years of stagnation and distress left the Company, its creditors and its nearly 850 shareholders on the verge of total loss. In 2001 Kenneth McCleave started dialogue with the Management and shareholders of the Company about merging with American Leisure Products, Inc., a company that would use virgin materials to produce vintage cars, boats and other FRP products. These discussions resulted in a concerted effort by McCleave and his team, as well as the Officers and Directors of the Company, to establish support for and confidence in the proposed plan of merger. In May of 2004 after much creditor negotiation, resolution of legal matters and personal visits with hundreds of shareholders representing over 70% of the issued and outstanding shares of the Company’s common stock, the merger was completed between Amour Fiber Core, Inc. (Nevada) and American Leisure Products, Inc. (Florida). Simultaneously, the combined companies effected a name change to American Fiber Green Products, Inc. (AFGP). The Company established that the future operations of the two merged companies would represent two divisions of AFGP. Amour Fiber Core, Inc. (Florida) had been formed to be a subsidiary of American Fiber Green Products, Inc. specifically fiberglass waste recycling. American Leisure Products, Inc. (Florida) will produce fiberglass components from new materials.
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Amour Fiber Core
We plan to generate revenues from several areas; a technology and proprietary process for the recycling of fiberglass. Revenues can be produced from the following areas:
Amour Fiber Core’s primary focus will be to recycle fiberglass, produce products from recycled material and sell license agreements for its process. The Company has developed, tested and previously placed into limited commercial production, a new technology for fiberglass reclamation manufacturing. It has adapted this technology to establish a manufacturing business. From the research and development in Amour’s early stages many different products have been prototyped and tested. Building on this foundation, management has determined that the pilot plant to be constructed in Florida and will produce general planking or boards for marine decking and seawalls. Marketing the planking will help to “brand” our name through park benches and picnic tables as part of our first line of finished goods.
We intend to offer contracts for licensing of our patented technology. The Company believes that licensing its technology to businesses in foreign countries and the North American market can be an effective method to maximize the return on its investment in the continued development of its fiberglass recycling technology, without significant additional capital outlays. Additionally, such licensing agreements will increase the Company’s public visibility and general awareness of its technology. The licensee will be required to pay an upfront fee for the sub-license, equipment and training prior to delivery and a royalty fee to the Company for each item produced by the licensee. If the wholesale price of the licensee’s produced products are significantly below the production costs of products produced by the Company, the Company may also offer to purchase product from the licensees. The Company believes the establishment of licensees in various foreign countries is an effective means of introducing the Company’s technology into new markets without major capital outlays.
American Leisure Products
American Leisure Products (ALP) will produce FRP parts within the fiberglass industry. In addition, the Company will produce parts from the company owned molds for the after market hot rod industry and the marine industry. ALP will produce and sell vintage car bodies, boats, and other fiberglass components in the leisure products line. The leisure market has been defined in recent years as one of the fastest growing market segments because of ‘baby boomers’ who have reached a point of financial affluence and increasing leisure time. Their desire to enjoy the ‘fruits of their labor’ has created a massive market that our products will feed. The Company currently owns molds for several products, but will also be acquiring additional molds and tooling as funding is achieved through debt or equity or the combination.
Results of Operations
Revenues
The Company had no revenue for the three and six months ended June 30, 2008. The Company has suspended all operations for the past several years while management effected the changes in corporate structure, built a management team, studied the market trends, and generated investment interest in the Company’s business model and opportunity. The Company plans to build a pilot plant in 2008-2009. The Company has begun the process of establishing a network of sub-licensees to collect and process waste fiberglass and to produce finished goods from that process. These sub-licenses will provide income to the Company in initial fees for acquiring the license as well as ongoing revenue from production royalties.
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Expenses
The Company incurred interest expense for the three and six months ended June 30, 2008 of $29,602 and $60,673, respectively, compared to interest expense of $27,954 and $55,255 for the three and six months ended June 30, 2007. Interest was charged based on the stated interest rates set forth in the notes.
Marketing, general and administrative expenses for the three and six months ended June 30, 2008 were $39,923 and $74,445, respectively, compared to $44,596 and $85,180, respectively, for the three and six months ended June 30, 2007.
General Trends and Outlook
We believe that our immediate outlook is extremely favorable, as we believe there is no other company competing with us on a nationwide basis in our market niche for recycling fiberglass and only a limited number of companies competing with us in of our products within American Leisure Products. However, there is no assurance that such national competitor will not arise in the future. We do not anticipate any major changes in the Recycling industry. We believe that 2008 will be a significant growth year, and besides the operational business strategies discussed above, we intend to implement the following plans in 2008 in order to maintain and expand our opportunity.
We plan to staff our facility in Tampa, Florida, with customer service representatives and logistical support personnel to build our Pilot Plant and complete our tooling requirements. Currently this facility is limited in staff. The Tampa plant will serve as the selling platform for the sub-licensing of Amour Fiber Core’s patented technology. Additionally, we will utilize this facility to directly distribute American Leisure’s products to the market.
As we gain strength and stability in the U.S. domestic market, we intend to expand our influence and market in other areas of the world through our license agreements. Inquiries about acquiring use of the Amour recycling technology have been received from Japan, Australia, England, France, Turkey, Egypt, the African continent, Indonesia, Ireland, the Caribbean basin and Canada.
Liquidity and Capital Resources
The Company’s financial statements have been prepared assuming that the Company will continue as a going concern. For the six months ended June 30, 2008, the Company has had a net loss of $128,112 and cash used by operations of $61,704, and negative working capital of $360,203 at June 30, 2008. In view of these matters, recoverability of recorded asset amounts shown in the accompanying consolidated financial statements is dependent upon the Company’s ability to expand operations and to achieve a level of profitability. The Company has financed its activities principally from private funding. The Company intends to finance its future development activities and its working capital needs largely from the sale of equity securities until such time that funds provided by operations are sufficient to fund working capital requirements.
Unpredictability of future revenues; Potential fluctuations in quarterly operating results; Seasonality
As a result of the Company’s limited operating history, the Company is unable to accurately forecast its revenues. The Company’s current and future expense levels are based largely on its investment plans and estimates of future revenues and are to a large extent fixed and expected to increase.
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Sales and operating results generally depend on the volume of, timing of and ability to fulfill the number of orders received and the ability to obtain raw materials at a reasonable price. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company’s planned expenditures would have an immediate adverse effect on the Company’s business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions which could have a material adverse effect on its business, prospects, financial condition and results of operations.
The Company expects to experience significant fluctuations in its future quarterly operating results due to a variety of factors, many of which are outside the Company’s control. Factors that may adversely affect the Company’s quarterly operating results include (i) the Company’s ability to retain customers, attract new customers at a steady rate and maintain customer satisfaction, we cannot be sure that we will be able to attract sufficient customers to maintain or grow revenue and consequently our long term growth and success may be negatively impacted; (ii) the announcement or introduction of new technology by the Company and its competitors, we cannot be sure that our competition will not significantly impact our customer base, and thereby negatively impact our revenues, with new and improved technology; (iii) price competition or higher prices in the industry, we cannot be sure that we will be able to maintain our current pricing structure and gross margins to be able to compete with new competitors at reasonable prices; (iv) the Company’s ability to upgrade and develop its systems and infrastructure and attract new personnel in a timely and effective manner, the Company cannot be sure that it will be able to raise sufficient capital in order for it to grow its infrastructure; (v) governmental regulation, the Company must comply with regulations from several governmental agencies to ensure compliance of products, recycling processes and manufacturing facilities, but there is no assurance that the regulations will not change or become more restrictive in the future, thereby limiting the ability of the Company to produce cost effective products.
Capital Stock
Preferred Stock
Although the board has authorized 5,000,000 shares of preferred stock, par value $.001, none have been issued.
Capital Expenditures
We expect in the future to incur capital expenditures. Since our inception, the research and development has been completed. For each division in 2008-2009, we expect to have total capital expenditures of $525,000.00 — Amour Fiber Core $250,000 for the pilot plant, American Leisure Products $275,000.
Item 3. | Quantitative and Qualitative Disclosures about Market |
Not Applicable
Controls and Procedures |
Evaluation of disclosure controls and procedures. |
The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the six month period ending June 30, 2008 covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after June 30, 2008.
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Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2008 under the criteria set forth in the Internal Control—Integrated Framework.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that material weaknesses exist due to the lack of segregation of duties, resulting from the Company’s limited resources.
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 our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Quarterly Report on Form 10-Q.
Changes in Internal Control over Financial Reporting
No change in the Company’s internal control over financial reporting occurred during the quarter ended June 30, 2008, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
CHANGE IN INTERNAL CONTROLS
There have been no changes in internal controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II—OTHER INFORMATION
Legal Proceedings |
The Company is not involved in any legal proceedings and is not aware of any pending or threatened claims.
The Company expects to be subject to legal proceedings and claims from time to time in the ordinary course of its business, including, but not limited to, claims of alleged infringement of the trademarks and other intellectual property rights of third parties by the Company and its licensees. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.
Unregistered Sales of Equity Securities and Use of Proceeds |
During the six month period ended June 30, 2008, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.
During the period covered by this filing, the Company did not sell any securities that were not registered under the Securities Act.
Defaults Upon Senior Securities |
There have been no defaults in any material payments during the covered period.
Submission of Matters to a Vote of Security Holders |
During the six month period ended June 30, 2008, the Company did not submit any matters to a vote of its security holders.
Other Information |
The Company does not have any other material information to report with respect to the six month period ended June 30, 2008.
Exhibits and Reports on Form 8-K |
Exhibit # | Description | |||
2 | 2.1 | Merger between Hydro Press and Amour, dated 3/12/93* | ||
2.2 | Agreement and Plan of Merger between Amour Fiber Core [Nevada] and American Leisure Products, dated 5/24/2004* | |||
2.3 | Agreement and Plan of Merger between Amour Fiber Core [Washington] and Amour Fiber Core [Nevada], dated 5/25/2004* | |||
3 | 3.1 | Article of Incorporation of Amour Fiber Core, Inc. [Washington], dated 12/22/95* | ||
3.2 | Article of Amendment for 3 to 1 forward split dated 6/9/98* | |||
3.3 | Articles of Incorporation of American Leisure Products, Inc., dated 9/2/2001* | |||
3.4 | Articles of Incorporation of Amour Fiber Core, Inc. [Florida], dated 9/15/2001* | |||
3.5 | Articles of Incorporation of Amour Fiber Core, Inc. [Nevada], dated March 2004* | |||
3.6 | Bylaws* | |||
10 | Employment Agreement with Kenneth W. McCleave, dated 10/1/2001* | |||
10.2 | Exclusive license agreement with the Amour Family Trust * | |||
31.1 | ||||
31.2 | ||||
32 |
* | These exhibits are filed as part of Form 10SB registration statement filed with the SEC on February 22, 2007 and incorporated by reference. |
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized:
Date: August 18, 2008 | American Fiber Green Products, Inc. | ||
By: | /s/ Daniel L. Hefner | ||
Daniel L. Hefner, | |||
President and Director | |||
(Principal Executive Officer) | |||
By: | /s/ Michael A. Freid | ||
Michael A. Freid, | |||
Chief Financial Officer and Principal Accounting Officer |
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