UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE EXCHANGE ACT
For the transition period ________________ to ______________
Commission file number333-89873
Fibr-Plast Corporation
(Exact name of Small Business Issuer as specified in its charter)
OKLAHOMA 73-1543658
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3225 S. Norwood Ave, #100
Tulsa, Oklahoma 74135
(Address of principal executive offices)
(918) 622-0696
(Issuer's telephone number, including area code)
Check whether the issuer(1) filed all reports required to be
filed by Section13 or 15(d) of the 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.
Yes _x_ No ___
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 11,720,026
shares of $.00002 par value common stock as of May 15, 2002.
Transitional Small Business Issuer Disclosure Format (Check one):
Yes ___ No _x_
Part I - Financial Information Page
Financial Information:
Item 1. Financial Statements
Balance Sheet
March 31, 2002 F-3
Statements of Operations
Three Months Ended March 31, 2002 and 2001 and
Nine Months Ended March 31, 2002 and 2001 and
Inception (April 28, 1998) to March 31, 2002 F-4
Statements of Cash Flows
Nine Months Ended March 31, 2002 and 2001 and
Inception (April 28, 1998) to March 31, 2002 F-5
Statement of Stockholders' Deficiency
For the period from inception (April 2, 1998)
to March 31, 2002 F-6
Notes to Financial Statements F-7 - F-8
Item 2. Management's Discussion and Analysis of the Financial F-9
Condition and Results of Operation
Part II - Other Information F-10
Item 6. Exhibits and Reports on 8-K F-11
Signatures F-12
F-3
FIBR-PLAST CORPORATION
(A Development Stage Company)
BALANCE SHEET
March 31,
2002
---------
Assets
Current assets:
Cash and cash equivalents $ 16,276
Prepaid expense 5,344
---------
Total current assets 21,620
Certificate of deposit 30,000
Investments in joint venture 134,660
Property and equipment, net 655,216
Accounts receivable - related parties 72,367
Fibr-Plast patent, at cost 5,156
Deposits 5,000
Note receivable 5,006
Other assets 14,250
---------
Total assets $ 943,275
=========
Liabilities and Stockholders' Deficiency
Current liabilities:
Accounts payable 26,251
Accrued liabilities 248,009
Current portion of note payable 16,590
Loans payable - related parties 257,907
---------
Total current liabilities 548,757
Notes payable 30,489
---------
Total liabilities 579,246
Common stock issued subject to rescission 1,153,069
Stockholders' deficiency:
Common stock - par value $.00002; 25,000,000 shares authorized;
11,720,026 shares issued including 4,721,526 shares subject
to rescission 134
Additional paid-in capital 909,820
Deficit accumulated during the development stage (1,698,994)
---------
Total stockholders' deficiency (789,040)
---------
Total liabilities and stockholders' deficiency $ 943,275
=========
F-4
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For three months ended March 31, 2002 and 2001
Nine months ended March 31, 2002 and 2001
and for the Period from Inception (April 2, 1998) to March 31, 2002
<table>
<caption>
<s> <c> <c> <c> <c> <c>
Three months ended Nine months ended Inception
----------------------------- ---------------------------- (April 2, 1998) to
March 31, March 31, March 31, March 31, March 31,
2002 2001 2002 2001 2002
----------- ----------- ----------- ----------- ------------
Revenue $ 98 $ - $ 798 $ - $ 1,610
Expenses:
General and
administrative expenses 191,386 156,525 414,598 323,022 1,700,604
----------- ----------- ----------- ----------- ------------
Net loss $ (191,288) $ (156,525) $ (413,800) $ (323,022) $ (1,698,994)
=========== =========== =========== =========== ============
Weighted average shares
outstanding,
including shares
subject to rescission $ 11,375,398 $ 11,833,546 $ 11,655,500 $ 11,830,604 $ 10,314,275
=========== =========== =========== =========== ============
Net loss per share,
basic and diluted $ (.02) $ (.01) $ (.04) $ (.03) $ (.16)
=========== =========== =========== =========== ============
</table>
F-5
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For nine months ended March 31, 2002 and 2001 and
for the Period from Inception (April 2, 1998) to March 31, 2002
<table>
<caption>
<s> <c> <c> <c>
Nine months ended Inception
---------------------------- (April 2, 1998) to
March 31, March 31, March 31,
2002 2001 2002
----------- ----------- ------------
Cash Flows from Operating Activities
Net loss $ (413,800) $ (323,022) $ (1,698,994)
Depreciation and amortization 30,213 5,449 39,095
Contribution of and shares issued
for services 115,000 - 271,584
Changes in:
Accounts receivable (65,200) 12,372 (72,367)
Prepaid expense 7,460 - (19,594)
Accrued liabilities 175,437 16,337 248,009
Accounts payable (10,628) (15,311) 26,251
Other assets (5,006) - (5,006)
----------- ----------- ------------
Net cash used in operating activities (166,524) (304,175) (1,211,022)
Cash Flows from Investing Activities
Purchase of certificate of deposit - - (30,000)
Investment in joint venture (49,660) - (59,660)
Purchase of property and equipment (40,313) (32,549) (59,995)
Fibr-Plast patent cost - - (7,472)
Deposits - (5,000) (5,000)
----------- ----------- ------------
Net cash used in investing activities (89,973) (37,549) (162,127)
Cash Flows from Financing Activities
Proceeds from sales of common stock - 416,731 1,084,439
Proceeds from loans payable 265,312 29,233 312,118
Payments on note payable (187) - (7,132)
----------- ----------- ------------
Net cash provided by financing activities 265,125 445,964 1,389,425
----------- ----------- ------------
Increase (decrease) in cash 8,628 104,240 16,276
Cash, beginning of period 7,648 1,091 -
----------- ----------- ------------
Cash, end of period $ 16,276 $ 105,331 $ 16,276
=========== =========== ============
Non-Cash Investing and Financing Activities
Issuance of common stock for investment
in joint venture $ (75,000) $ - $ 75,000
=========== =========== ============
Issuance of common stock for fixed assets $ 632,000 $ - $ 632,000
=========== =========== ============
</table>
F-6
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
For the period from inception (April 2, 1998) to March 31, 2002
<table>
<caption>
<s> <c> <c> <c> <c> <c>
Deficit
Accumulated
Additional During the
Common Stock Common Stock Paid-in Development
Shares* Amount Capital Stage Total
---------- ---------- --------- ----------- --------
Issuance of shares to founders 240 $ 120 $ - $ - $ 120
Issuance of shares to Urban
stockholders 413,100 - - - -
Net loss - - - (119,175) (119,175)
---------- ---------- --------- ----------- --------
Balance June 30, 1998 413,340 120 - (119,175) (119,055)
Issuance of shares to founders
and affiliate 7,999,760 40 - - 40
Sale of common stock 1,364,126 - - - -
Net loss - - - (290,880) (290,880)
---------- ---------- --------- ----------- --------
Balance June 30, 1999 9,777,226 160 - (410,055) (409,895)
Net loss - - - (484,938) (484,938)
Sale of common stock 1,258,320 - - - -
Shares issued for services 118,000 2 62,832 - 62,834
---------- ---------- --------- ----------- --------
Balance June 30, 2000 11,153,546 162 62,832 (894,993) (831,999)
Shares issued for services 100,000 2 24,998 - 25,000
Sale of common stock 1,670,480 - - - -
Shares issued for investment 600,000 12 149,988 - 150,000
Founder shares repurchased
and retired (2,000,000) (40) - - (40)
Net loss - - - (390,201) (390,201)
---------- ---------- --------- ----------- --------
Balance June 30, 2001 11,524,026 $136 $ 237,818 $ (1,285,194) $ (1,047,240)
Shares issued for services 180,000 4 114,996 - 115,000
Exchange of common stock
for assets 316,000 - 632,000 - 632,000
Joint venture amendment (300,000) (6) (74,994) - (75,000)
Net loss - - - (413,800) (413,800)
---------- ---------- --------- ----------- --------
Balance March 31, 2002 11,720,026 $ 134 $ 909,820 $ (1,698,994) $ (789,040)
========== ========== ========= =========== ========
* Including shares issued subject to rescission.
</table>
F-7
FIBR-PLAST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
Note 1 - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and do not include all information and footnotes required
by generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting only
of normal recurring adjustments which are, in the opinion of management,
necessary in order to make the financial statements not misleading.
Note 2 - Description of the Business
Fibr-Plast Corporation (the "Company") is a development stage company formed
to take advantage of an existing technology process and product called "Fibr-
Plast." The Fibr-Plast technology uses 100% recycled, solid waste, post
consumer materials to produce an alternative wood product. It can be molded
into an unlimited number of shapes and sizes, strengths and densities. The
market for alternative wood products is worldwide.
Note 3 - Debt
Long-term debt consists of a note payable to a bank with monthly payments of
$924 including interest at 6.75% through February2004, and a note payable to
Ford Motor Credit with monthly payments of $564 through February2005.
Maturities of long-term debt are as follows:
2002 $ 16,590
2003 16,997
2004 12,207
2005 1,285
------
$ 47,079
F-8
Note 4 - Commitments and Contingencies
From November 1998 to December 31, 2001, the Company sold 4,706,026 shares of
its common stock for cash and in-kind consideration aggregating $1,153,069.
The sale of these shares may not have complied with applicable securities
laws. The purchasers may be able to compel the Company to rescind the
purchases and pay interest. Management intends to make a rescission offer.
Until the offer for rescission has been extended and declined, the cash and
in-kind consideration received from these stock sales will be reported as a
liability.
In August 2000, the Company entered into an agreement to establish a corporate
joint venture, to be owned 50% by the Company, for the purpose of constructing
and operating a Fibr-Plast manufacturing facility. The joint venture partner
is responsible for furnishing plant and equipment, providing start-up
operating capital, and obtaining joint venture debt. The Company will provide
a non-exclusive license to use the Fibr-Plast name, furnish manufacturing
technology, and provide marketing and sales services.After making provisions
for retiring indebtedness, joint venture net income shall be split equally.
The Company issued to the joint venture partner 600,000 shares of its common
stock in consideration of its joint venture interest. In December2001, the
joint venture agreement was amended. The joint venture partner agreed to
return 300,000 shares of the Company common stock previously issued. The
joint venture partner will receive options for an additional 300,000 shares at
$1.00 per share, to be issued within twenty-four months after the joint
venture has first had three consecutive months of positive earnings. The
Company agreed to pay the joint venture partner $30,000, and an additional
$70,000 on or before September1, 2002.
On August 1, 2001, the Company entered into a three-year employment agreement
under which the position of Senior Vice President was filled. The Company
granted rights to purchase shares of common stock as follows: 140,000 shares
upon signing the agreement, 500,000 shares on or after June30, 2002; 500,000
shares on or after December31, 2002; and 500,000 shares on or after June30,
2003. The option price is $.00002 per share. Unexercised options will expire
June30, 2004. The total value of the stock grant of $410,000 is determined
using estimated fair value of the stock of $.25 per share. Compensation
expense resulting from the stock grant will be $160,000 in 2002 and $125,000
in each of 2003 and 2004.
On March 19, 2002, the Company entered into an agreement for the purchase of
equipment for stock. The Company transferred 300,000 shares upon signing the
agreement, with an option to purchase an additional 100,000 shares of stock at
$2 per share at any time on or before March31, 2003. The Company recorded the
equipment at $600,000, based on 300,000 shares at $2 per share. Management's
estimate of the fair value of common stock at $2 per share is based on recent
private transactions.
F-9
Item 2. Management's Discussion and Analysis or Plan of Operation
The following should be read in conjunction with our financial statements and
the related notes that appear elsewhere in this Quarterly Report. The
discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or
contribute to these differences include, but are not limited to, those
discussed below and elsewhere in this Annual Report.
Our plan of operation is dependant in substantial part upon the sale of a
minimum of 1,000,000 shares of common stock that we registered with the SEC.
Although we registered 5,000,000 shares for sale at $2.00 per share, we have
not sold any of the shares. We intend to shortly amend our registration
statement so that we may resume our offering at $2.00 per share.
If we are able to sell at least 1,000,000 shares at $2.00 per share, our plan
of operation during the 12 months after our receipt of the net proceeds of the
offering is dependent upon the number of shares sold in the offering. If
5,000,000 shares are sold, we intend to open and operate two Fibr-Plast
plants, each of which will be capable of producing approximately 5,000 pounds
of Fibr-Plast per hour. If at least 2,500,000 shares but less than 5,000,000
shares are sold, we intend to open and operate one such plant. If less than
2,500,000 shares but at least 1,000,000 shares are sold we intend to open and
operate a small Fibr-Plast manufacturing plant. We believe that the small
plant will only be capable of manufacturing approximately 500 pounds of Fibr-
Plast per hour. The plant will be used primarily to attract additional
investors or joint venture participants and to produce a limited quantity of
Fibr-Plast in an effort to gain brand recognition and market acceptance of
Fibr-Plast. We do not expect to realize a significant profit, if any, if all
our production is manufactured in the small plant. Although we have not
determined the geographic area in which any of our plants will be located, we
anticipate that during a six-month period, we can determine the location of
our first plant, negotiate a suitable lease and acquire and install the
necessary equipment and begin production. We anticipate that our cash
expenditures for those purposes will be approximately $1,952,500 for one large
plant or $205,000 for a small plant. During the six-month period, we intend to
spend approximately $5,000 to locate sources of suitable quantities of the raw
materials needed for production and retain sales representatives to sell our
finished product. Subject to the availability of sufficient capital, we intend
to open a second large plant within six months after the opening of our first
plant at a similar cost.
We cannot now predict the degree of initial and continuing production, supply
and sales problems, if any, that we may incur, and we cannot assure you of the
accuracy of our timetable. Because our plan of operation is flexible, we
expect that if we sell at least 1,000,000 shares at $2.00 per share, the net
proceeds will satisfy our cash requirements for the 12 months after our
receipt of the proceeds.
If our public offering of our shares is unsuccessful, we will attempt to
obtain necessary capital from other sources.
Until we receive sufficient capital to operate our own plants, all production
will continue to be made through our joint venture.
F-10
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(a) Not applicable.
(b) Not applicable.
(c) On February 8, 2002, we sold 8,500 shares of our common stock to Joe
C. Cooper in consideration of a truck. On January 6, 2002, we issued
40,000 shares of our common stock to Reginald West for services
previously rendered. On March 18, 2002, we sold 300,000 shares of our
common stock to Michaud Investments, Inc. in consideration of
machinery and equipment. No principal underwriters were utilized in
connection with the sale. We claimed exemption from registration
pursuant to the exemption provided by Section 4(2) of the Securities
Act of 1933, inasmuch as no public offering was involved.
(d) Our Securities Act registration statement, file no. 333-89873, became
effective on July 13, 2001. None of the information referred to in
paragraphs (f)(2) through (f)(4) of Item 701 of Regulation S-B has
changed since the filing of our Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2001.
F-11
Item 6. Exhibits and Reports on From 8-K
(a) Exhibits
3.01 Certificate of Incorporation, as amended.**
3.02 Bylaws, as amended.***
4.01 Form of Specimen Stock Certificate for the Registrant's Common Stock.*
10.01 Employment Agreement of September 1, 1999 between the Registrant and
Thomas G. Watson.**
10.02 Employment Agreement of September 1, 1999 between the Registrant and
Joseph Francella.**
10.03 Preincorporation Agreement of August 29, 2000 between Samuel Slavens,
Inland Island, Inc. and the Registrant.*
10.10 Settlement Agreement and Mutual Releases between Wayne Ford, Jennifer
Roden, Thomas G. Watson, Joseph Francella and the Registrant of March
13, 2001.***
10.11 Escrow Agreement and Amendment thereto between Community Bank & Trust
Company and the Registrant.****
10.12 First Amendment to Preincorporation Agreement between Samuel Slavens,
Inland Island, Inc. and the Registrant dated December 12, 2001.*****
10.13 Equipment Sale/Purchase Agreement of March 19, 2002 between Second
Chance Plastics, Inc. and the Registrant.*****
10.14 Employment Agreement of August 1, 2001 between Tony Felitsky and the
Registrant.******
__________________
* Filed as an exhibit to Amendment No. 1 to the Registrant's
Registration Statement on form SB-2, file number 333-89873
(the "Registration Statement").
** Filed as an exhibit to the Registration Statement.
*** Filed as an exhibit to Amendment No. 2 to the Registration
Statement.
**** Filed as an exhibit to Amendment No. 3 to the Registration
Statement.
***** Filed as an exhibit to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended June 30, 2001.
****** Filed as an exhibit to the Registrant's Quarterly Report on
Form 10-QSB for the quarterly period year ended September 30,
2001.
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
F-12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Fibr-Plast, Inc.
By: /s/ Thomas G. Watson
----------------
Name: Thomas G. Watson
Title: Chief Executive Officer and Chief Financial Officer
Date: May 15, 2002