SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
January 10, 2001
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Date of Report (Date of Earliest Event Reported)
EAGLE BUILDING TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
0-26322 88-0327648
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(Commission File Number) (IRS Employer Identification No.)
2028 State Road 7, Suite 213, Boca Raton, Florida 33498
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(Address of Principal Executive Offices)
(561) 487-3600
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(Registrant's Telephone Number)
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(Former Name or Former Address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Eagle Building Technologies, Inc. f/k/a Eagle Capital International,
Ltd. (the "Company") is filing this Amendment to the Form 8-K filed on
January 10, 2001, to provide the audited financials of Fleming
Manufacturing Company, Inc. ("Fleming"), a wholly owned subsidiary of the
Company, for the fiscal year ended December 31, 2000, and the Company's
unaudited Proforma Financial Statement for the fiscal year ended December
31, 2000, inclusive of Fleming. In the Company's Form 10-KSB filed on
April 18, 2001, the Company's consolidated financials reflected the
appropriate financial inclusion of Fleming's operations.
The financial statements required pursuant to this Item 7 are
appended to this Form 8-K/A as a separate section commencing on page F-1,
and are hereby incorporated by reference into this Item 7.
2
SIGNATURES
----------
Pursuant to the requirements of the securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
EAGLE BUILDING TECHNOLOGIES, INC.
Dated: May 18, 2001 By:___/s/Anthony D'Amato_____________
Anthony D' Amato
Its: Chairman and Chief
Executive Officer
3
FLEMING MANUFACTURING COMPANY, INC.
December 31, 2000
Financial Statements
4
FLEMING MANUFACTURING COMPANY, INC.
Index to Financial Statements
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Page
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Independent Auditors' Report F-2
Balance sheet F-3
Statement of operations F-4
Statement of stockholders' equity F-5
Statement of cash flows F-6
Notes to financial statements F-7
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F-1
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of Fleming Manufacturing Company, Inc.
We have audited the balance sheet of Fleming Manufacturing Company, Inc.
as of December 31, 2000, and the related statements of operations,
stockholders' equity, and cash flows for the year ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Fleming
Manufacturing Company, Inc. as of December 31, 2000, and the results of
its operations and its cash flows for the year ended December 31, 2000
in conformity with generally accepted accounting principles.
/s/ Tanner+ Co.
Salt Lake City, Utah
January 19, 2001
F-2
FLEMING MANUFACTURING COMPANY, INC.
Balance Sheet
December 31, 2000
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Assets
------
Current assets:
Cash and cash equivalents $ 8,828
Accounts receivable, net 559,415
Inventory 1,348,518
Prepaid expenses 22,206
-----------
Total current assets 1,938,967
-----------
Property and equipment, net 354,050
-----------
Total $ 2,293,017
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Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Note payable $ 350,000
Accounts payable 253,728
Accrued liabilities 125,324
Customer deposits 652,692
Current maturities of capital lease obligations 73,893
-----------
Total current liabilities 1,455,637
-----------
Capital lease obligations, less current maturities 23,223
-----------
Total liabilities 1,478,860
-----------
Commitments and contingencies -
Stockholders' equity:
Common stock $10 par value; 5,000 shares
authorized; 3,605 shares issued 36,050
Additional paid-in capital 61,746
Retained earnings 1,029,773
-----------
1,127,569
Less 3,063 treasury shares at cost (313,412)
-----------
Total stockholders' equity 814,157
-----------
Total $ 2,293,017
===========
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See accompanying notes to financial statements F-3
FLEMING MANUFACTURING COMPANY, INC.
Statement of Operations
Year Ended December 31, 2000
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Net sales $ 3,786,322
Cost of sales 2,741,792
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Gross profit 1,044,530
Selling expenses 196,604
General and administrative expenses 859,365
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Loss from operations (11,439)
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Other income (expense)
Interest expense (48,906)
Other (net) 32,495
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Net other expense (16,411)
Loss before income taxes (27,850)
Benefit for income taxes -
-------------
Net loss $ (27,850)
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See accompanying notes to financial statements F-4
FLEMING MANUFACTURING COMPANY, INC.
Statement of Stockholders' Equity
Year Ended December 31, 2000
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Common Stock Addditional
------------------ Paid-In Retained Treasury
Shares Amount Capital Earnings Stock Total
------ ------ ----------- ----------- ----------- ----------
Balance,
January 1, 2000 3,605 $ 36,050 $ 61,746 $ 1,057,623 $ (313,412) $ 842,007
Net loss - - (27,850) - (27,850)
----- -------- --------- ----------- ---------- ----------
Balance,
December 31, 2000 3,605 $ 36,050 $ 61,746 $ 1,029,773 $ (313,412) $ 814,157
===== ======== ========= =========== ========== ==========
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See accompanying notes to financial statements F-5
FLEMING MANUFACTURING COMPANY, INC.
Statement of Cash Flows
Year Ended December 31, 2000
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Cash flows from operating activities
Net loss $ (27,850)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 120,913
Gain on sale of assets (32,495)
Bad debt expense 16,683
(Increase) decrease in:
Accounts receivable 10,612
Inventory (73,646)
Prepaid expenses (5,537)
Other assets 96,076
Increase (decrease) in:
Bank overdraft (49,669)
Accounts payable (120,823)
Accrued liabilities 42,686
Customer deposits (169,442)
------------
Net cash used in
operating activities 192,492
Cash flows from investing activities:
Proceeds from sale of assets 61,688
Purchase of property and equipment (71,406)
------------
Net cash used in
investing activities 9,718
Cash flows from financing activities:
Net proceeds from note payable 1,699,000
Payments on note payable (1,349,000)
Principal payments on capital lease obligations (154,656)
------------
Net cash provided by
financing activities 195,344
------------
Decrease in cash and cash equivalents (6,866)
Cash and cash equivalents, beginning of year 15,694
------------
Cash and cash equivalents, end of year $ 8,828
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See accompanying notes to financial statements F-6
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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1. Organization and Signficant Accounting Policies
Organization
------------
The Company manufactures and markets specialty
casting machines and related accessory equipment
for the production of concrete block, paver and
landscape products.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid debt
instruments purchased with a maturity of three
months or less to be cash and cash equivalents.
Inventory
---------
Inventory is valued at the lower of cost or market.
Cost is determined by the first-in, first-out
(FIFO) method.
Property, Equipment, Depreciation and Amortization
--------------------------------------------------
Property and equipment are stated at cost.
Depreciation and amortization is determined using
the straight-line method over the estimated useful
lives of the assets or lease terms.
Income Taxes
------------
The Company accounts for income taxes utilizing the
liability method, which requires recognition of
deferred tax assets and liabilities for the
expected future tax consequences of events that
have been included in the financial statements or
tax returns. Deferred taxes are provided for
temporary differences between the financial
statements and tax basis of an asset or liability
using tax rates expected to be in effect.
Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the
Company to concentration of credit risk consist
primarily of trade receivables. In the normal
course of business, the Company provides credit
terms to its customers. Accordingly, the Company
performs ongoing credit evaluations of its
customers and maintains allowances for possible
losses which, when realized, have bee within the
range of management's expectations.
The Company maintains its cash in bank deposit
accounts which, at times may exceed federally
insured limits. The Company has not experienced
any losses in such accounts and believes it is not
exposed to any significant credit risk on cash and
cash equivalents.
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F-7
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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1. Organization and Significant Accounting Policies
Continued
Concentration of Credit Risk - Continued
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During the year ended December 31, 2000, the
Company had sales to a major customer which
represented approximately $532,000 or 14% of total
net sales.
Accounting Estimates
--------------------
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect the reported amounts or
assets and liabilities and disclosure of
contingents assets and liabilities at the date of
financial statements and the reported amounts of
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
-----------------------------------
The Company's financial instruments consist
primarily of cash, accounts receivable, accounts
payable and debt instruments. The book value of
cash, accounts receivable and accounts payable is
representative of their fair values due to the
short-term maturities of these instruments. the
book value of the Company's debt instruments are
considered to approximate their fair values at
December 31, 2000 based on current market rates and
conditions.
2. Detail of Certain Balance Sheet Accounts
Accounts receivable consisted of the following:
Trade receivables $ 712,415
Allowance for doubtful accounts (153,000)
----------
$ 559,415
==========
Inventory consisted of the following:
Finished goods/purchased parts $ 6,850
Work in progress 568,742
Raw materials 772,926
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$1,348,518
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F-8
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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3. Property and Equipment
Property and equipment consisted of the following:
Leasehold improvements $ 124,507
Machinery and equipment 973,864
Office furniture and fixtures 366,627
Transportation equipment 61,069
----------
1,526,067
Less accumulated depreciation and
amortization 1,172,017
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Net property and equipment $ 354,050
==========
4. Note Payable
The Company has a $1,000,000 line of credit
agreement that expires June 22, 2001 available from
a bank which is secured by all accounts receivable,
inventory, furniture, fixtures and equipment.
There was $350,000 outstanding on the line of
credit at December 31, 2000. Interest is at the
bank's prime rate plus .50% (10.0% at December 31,
2000).
5. Income Taxes
The provision for income taxes differs from the
amounts which would be provided by applying the
statutory federal income tax rate to loss before
provision for income taxes for the following
reasons:
Federal income tax benefit at statutory rate $ 5,000
Meals and entertainment (1,000)
Change in valuation allowance (4,000)
--------
$ -
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F-9
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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5. Income Taxes Continued
Deferred tax assets (liabilities) at December 31,
2000 are comprised of the following:
Depreciation $ (23,000)
Allowance for doubtful accounts 27,000
---------
4,000
Less valuation allowance (4,000)
---------
$ -
=========
6. Leases
The Company leased certain equipment under
noncancelable capital leases during 2000. Assets
held under capital leases were included in and
equipment are as follows:
Machinery and equipment $ 371,785
Accumulated amortization (187,115)
----------
$ 184,670
==========
Amortization expense on capital leases for the year
ended December 31, 2000 was $59,334.
As of December 31, 2000, future minimum payments
under capital leases are as follows:
Years Ended December 31, Amount
------------------------ ----------
2001 $ 79,455
2002 23,652
----------
Total minimum lease payments 103,107
Less amounts representing interest 5,991
----------
Present value of net minimum lease
payments 97,116
Less current maturities 73,893
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$ 23,223
==========
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F-10
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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6. Leases Continued
The Company also leases office equipment which is
accounted for as an operating lease. Monthly lease
payments extend though 2002.
Rental expense, for operating leases, charged to
operations was $2,148 in 2000.
7. Profit Sharing Plan
The Company had a qualified non-contributory plan
covering substantially all full-time employees.
The Company's contribution to the plan, as
determined by the Board of Directors, is
discretionary but may not exceed the maximum amount
deductible under the provisions of the Internal
Revenue Code. During the year ended 2000, the
Company terminated the plan according to the
provisions of the plan document. Contributions
charged against operations amounted to $1,928 for
the year ended December 31, 2000.
8. Related Party Transactions
The Company rents its office and manufacturing
space from the president's mother on a month-by-
month basis. Under this rental agreement, the
Company recognized annual rent expense of $19,500
in 2000.
9. Acquisition
On December 28, 2000 the Company was acquired by
Eagle Capital International through a definitive
stock purchase agreement, in which the outstanding
shares of the Company were acquired for cash and
stock of the acquiring company for $3,875,000.
10. Supplemental Cash Flow Information
Interest and income taxes paid are as follows:
Interest $ 47,451
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Income taxes $ -
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F-11
FLEMING MANUFACTURING COMPANY, INC.
Notes to Financial Statements
December 31, 2000
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11. Recent Accounting Pronouncements
SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, was issued in June 1998 and
amended by SFAS No. 138, issued in June 2000. The
requirements of SFAS No. 133, as amended, will be
effective for the Company in the first quarter of
the fiscal year beginning January 1, 2001. The
standard establishes accounting and reporting
standards for derivative instruments embedded in
other contracts and for hedging activities. Under
the standard, certain contracts that were not
formerly considered derivatives may now meet the
definition of a derivative. The Company has
determined SFAS 133 to have no impact on the
Company's financial position and results of
operations because the Company has no derivative
activity.
SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments
of Liabilities, was issued in September 2000. SFAS
No. 140 is a replacement of SFAS No. 125,
Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities. Most of
the provisions of SFAS No. 125 were carried forward
to SFAS No. 140 without reconsideration by the
Financial Accounting Standards Board (FASB), and
some were changed only in minor ways. In issuing
SFAS No. 140, the FASB included issues and
decisions that had been addressed and determined
since the original publication of SFAS No. 125.
SFAS No. 140 is effective for transfers after
March 31, 2001. Management does not expect the
adoption of SFAS No. 140 to have a significant
impact on the financial position or results of
operations of the Company.
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F-12
Eagle Capital International, Ltd.
Unaudited Proforma Financial Statements
For the Year Ended December 31, 2000
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Eagle Capital Fleming Mfg. Combined
12/31/2000 12/31/2000 Adjustments 12/31/2000
------------- ------------ ----------- ------------
Sales $ 3,354,847 $ 3,786,322 $ (855,180) A $ 6,285,989
Cost of Sales (1,736,434) (2,741,792) 559,167 A (3,919,059)
Gross profit 1,618,413 1,044,530 (296,013) 2,366,930
Selling, general and
administrative expenses (4,953,680) (1,055,969) 315,377 A,B (5,694,272)
Impairment of goodwill (1,714,387) - - (1,714,387)
Impairment of investment (201,363) - - (201,363)
Equity in loss of joint venture (104,453) - - (104,453)
------------- ------------ ----------- ------------
Loss from operations (5,355,470) (11,439) 19,364 (5,347,545)
Other expense:
Interest expense (325,607) (48,906) 20,054 A (354,459)
Loss on sale of securities (52,282) - (52,282)
Other (5,275) 32,495 (36,498) A (9,278)
------------- ------------ ----------- ------------
Net loss before income taxes (5,738,634) (27,850) 2,920 (5,763,564)
Provision for income taxes - - -
Net loss $ (5,738,634) $ (27,850) $ 2,920 $ (5,763,564)
============= ============ =========== ============
Weighted average number of
common shares outstanding
Basic and diluted 1,693,070 3,605 1,693,070
============= ============ ============
Loss per common share
Basic and diluted (3.39) (7.73) (3.40)
============= ============ ============
Note A - The effective date of the acquisition was October 1, 2000, therefore
the financial results of Fleming Manufacturing for the period from
October 1, 2000 through December 31, 2000 are included in Eagle
Capital's historical financial statements. This adjustment removes
the three months ended December 31, 2000 income and expenses already
included in Eagle Capital.
Note B - Amortization expense for the goodwill in Fleming based on a 20 year
life.