Form 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 2006.
( ) Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File No: 000-30021
NEW FIBER CLOTH TECHNOLOGY, INC.
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(Name of small business in its charter)
Nevada 84-1492104
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(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
P. O. Box 461029, Glendale, CO 80246
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(Address of executive offices) Zip Code
(303) 394-1187
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(Issuer's telephone number, including area code)
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Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act during
the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the issuer's classes
of stock, as of the latest practicable date.
Class of Securities Shares Outstanding
at June 30, 2006
------------------- -------------------
Common Stock, $.001 par value 3,886,000
Transitional Small Business Disclosure Format
Yes _____ No __X__
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
(a) The financial statements of registrant for the six months
ended June 30, 2006, follow. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented.
NEW FIBER CLOTH TECHNOLOGY, INC.
(F/K/A PARK HILL CAPITAL III CORP.)
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended June 30, 2006
CONTENTS
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes to Financial Statements 4
NEW FIBER CLOTH TECHNOLOGY, INC.
(F/K/A PARK HILL CAPITAL III CORP.)
(A Development Stage Company)
BALANCE SHEET
June 30, 2006
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11,271
---------
Total current assets 11,271
---------
TOTAL ASSETS $ 11,271
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 37,443
---------
Total current liabilities 37,443
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value;
20,000,000 shares authorized;
0 shares issued and outstanding -
Common stock, $0.001 par value;
200,000,000 shares authorized;
3,886,000 shares issued and
outstanding 3,886
Additional paid-in capital 89,830
Deficit accumulated during the
development stage (119,888)
---------
(26,172)
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 11,271
=========
The accompanying notes are an integral part of the financial statements.
1
NEW FIBER CLOTH TECHNOLOGY, INC.
(F/K/A PARK HILL CAPITAL III CORP.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
period from For the For the For the For the
inception three three six six
(March 2, months months months months
1999) to ended ended ended ended
June 30, June 30, June 30, June 30, June 30,
2006 2006 2005 2006 2005
----------- ---------- ---------- --------- ---------
REVENUES $ - $ - $ - - -
----------- ---------- ---------- --------- ---------
EXPENSES
Selling, general &
administrative 119,888 9,712 8,541 37,568 8,541
----------- ---------- ---------- --------- ---------
Total expenses 119,888 9,712 8,541 37,568 8,541
----------- ---------- ---------- --------- ---------
NET INCOME/(LOSS) (119,888) (9,712) (8,541) (37,568) (8,541)
Accumulated deficit
Balance, Beginning
of period - (110,176) (70,524) (82,320) (70,524)
----------- ---------- ---------- --------- ---------
Balance,
End of period $ (119,888) $(119,888) $ (79,065) $(119,888) $ (79,065)
=========== ========= ========= ========= =========
NET LOSS PER SHARE $ (0.04) $ (NIL) $ (NIL) $ (0.01) $ (NIL)
=========== ========= ========= ======== =========
WEIGHTED AVERAGE NUMBER
OF SHARES
OUTSTANDING 3,357,806 3,886,000 3,372,209 3,886,000 3,344,413
=========== ========== ========== ========= =========
The accompanying notes are an integral part of the financial statements.
2
NEW FIBER CLOTH TECHNOLOGY, INC.
(F/K/A PARK HILL CAPITAL III CORP.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the period
from inception
(March 2, For the six For the six
1999) to months ended months ended
June 30, June 30, June 30,
2006 2006 2005
-------------- ------------ ------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (119,888) $ (37,568) $ (8,541)
Adjustments to reconcile
net loss to net cash flows
from operating activities:
Increse in accounts
payable 37,443 36,762
Increase in accounts
payable - related party - - 54
Stock issued for services 64,550 - 1,650
-------------- ------------ ------------
Net cash flows from
operating activities (17,895) (806) (6,837)
CASH FLOWS FROM
INVESTING ACTIVITIES - - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 23,720 - 2,550
Shareholder Contributions 5,446 - 4,950
-------------- ------------ ------------
Net cash flows from
financing activities 29,166 - 7,500
-------------- ------------ ------------
Net increase (decrease)
in cash and cash
equivalents 11,271 (806) 663
CASH AND CASH EQUIVALENTS,
Beginning of Period - 12,077 42
-------------- ------------ -------------
CASH AND CASH EQUIVALENTS,
End of Period $ 11,271 $ 11,271 $ 705
============== ============ ============
The accompanying notes are an integral part of the financial statements.
3
NEW FIBER CLOTH TECHNOLOGY, INC.
(F/K/A PARK HILL CAPITAL III CORP.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2006
(UNAUDITED)
1. Management's Representation of Interim Financial Information
------------------------------------------------------------
The accompanying financial statements have been prepared by New Fiber
Cloth Technology, Inc. without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments which, in the
opinion of management, are necessary to a fair presentation of financial
position and results of operations. All such adjustments are of a normal
and recurring nature. These financial statements should be read in
conjunction with the audited financial statements of the Company for the
year ended December 31, 2005 and notes thereto included in the Company's
10-KSB annual report. The Company follows the same accounting policies in
the preparation of interim reports. Results of operations for interim
periods are not indicative of annual results.
2. Subsequent Events
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On July 31, 2006, the Company closed a share exchange transaction (the
"Share Exchange") pursuant to which the Company changed its name to
New Fiber Cloth Technology, Inc. and effectuated an increase in the
Company's authorized common stock from 25,000,000 to 200,000,000. The
Share Exchange is further described in the Company's Current Report on
Form 8-K filed August 4, 2006, which is incorporated herein by reference.
Pursuant to the Share Exchange, the Company issued to the shareholders of
Polara Global Limited, a British Virgin Islands international business
company, an aggregate of 73,834,000 shares of the Company's common stock,
constituting ninety-five percent (95%) of the COmpany's total issued
and outstanding common stock as of the closing date of July 31, 2006.
As of July 31, 2006, the Company's total issued and outstanding common
stock was 77,720,000. In connection with the Share Exchange, certain
shareholders of the Company placed 2,379,184 shares of common stock
held by them into escrow, pending completion of a private placement of
the Company's securities in which a minimum of $5,000,000 in gross
proceeds is raised within 120 days of the Share Exchange (subject to
extension under certain circumstances) (the "Financing"). In the event
the Financing is not completed, the 2,379,184 shares of common stock
in escrow will be canceled, and the remaining outstanding shares of
common stock that were outstanding prior to the Share Exchange,
aggregating 1,506,816, will be reduced to constitute two percent (2%)
of the Company's common stock.
The Company's previous officers and directors resigned as of the closing
of the Share Exchange. They were replaced by officers and directers
named by Polara Global Limited.
4
Item 2. Management's Discussion and Analysis Of Financial
Conditions and Results of Operations.
Liquidity and Capital Resources
As of June 30, 2006, the Company remained in the development stage
and, since inception, had experienced no significant change in liquidity
or capital resources or stockholder's equity other than the receipt of
cash in the amount of $23,720 and services valued at $64,550 as payment
for its outstanding common stock, and cash contributions of $5,446 from
existing shareholders. The Company's balance sheet for the period ending
June 30, 2006 reflects a current asset value and a total asset value of
$11,271, in the form of cash, compared to $705 in current and total assets
as of June 30, 2005.
Subsequent to June 30, 2006, the Company entered into a Share
Exchange, as further described above in Note 2 - Subsequent Events and
the Company's report on Form 8-K incorporated therein by reference.
The Company's business plan prior to the Share Exchange was to
seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. Subsequent to the Share Exchange, the Company will
principally be engaged in the holding of investments. Polara Global
Limited, which became a subsidiary of the Company in connection with
the Share Exchange, will function as a holding company for DeYi Fashions
Clothes Company Limited, a People's Republic of China limited liability
company which will be the Company's operating arm, and any other
subsidiaries the Company may later acquire.
Results of Operations
During the period from March 2, 1999 (inception) through June 30,
2006, the Company had engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of 1934,
as amended. No revenues were received by the Company during this period.
For the current fiscal year, the Company anticipates that it
will generate a net profit, based on the consolidation of the results
of its subsidiary and holding company subsequent to the Share Exchange.
For the fiscal year ended December 31, 2005, Polara Global Limited
generated net income of $3,482,624 from sales of $35,978,461. It
cannot be anticipated what the results of the Company will be for the
current fiscal year.
For the quarter ended June 30, 2006 and 2005, the Company showed
net losses of $37,568 and $8,541, respectively. The increase in net
losses is attributable to additional legal costs incurred by the Company
in connection with the Share Exchange. From inception the Company has
experienced losses of $119,888, of which $64,550 was settled for shares
of stock in the Company.
5
Need for Additional Financing
The Company will require additional capital in order to expand its
operations and/or complete acquisitions subsequent to the Share Exchange. The
Share Exchange provided that certain shareholders of the Company place 2,379,184
shares of common stock held by them into escrow, pending completion of a private
placement of the Company's securities in which a minimum of $5,000,000 in gross
proceeds is raised within 120 days of the Share Exchange (subject to extension
under certain circumstances) (the "Financing"). In the event the Financing is
not completed, the 2,379,184 shares of common stock in escrow will be canceled.
No commitments to provide additional funds have been made by management
or other stockholders. The Company anticipates that it will raise funds through
the private placement of restricted securities rather than through a public
offering. However, there is no firm commitment for any such financing and no
guarantee that the Company will be able to raise any financing that it seeks.
The Company may also seek to compensate providers of services by issuances
of stock in lieu of cash.
Item 3. Controls and Procedures
As of the end of the period covered by this report, the Company conducted
an evaluation, under the supervision and with the participation of the Principal
Executive Officer and Principal Financial Officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation,
the Principal Executive Officer and Principal Financial Officer concluded that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. Additionally, the Principal Executive Officer and Principal Financial
Officer concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is communicated to
the Principal Executive Officer and Principal Financial Officer, as appropriate
to allow timely decisions regarding disclosure. There was no change in the
Company's internal control over financial reporting during the Company's most
recently completed fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
6
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
on May 25, 2006, the Company received the written consent, in lieu of a meeting
of stockholders, from the holders of a majority of the Company's outstanding
voting stock, approving an amendment to the Company's Certificate of
Incorporation to (i) change the name of the Company to "New Fiber Cloth
Technology, Inc.", (ii) increase the number of authorized shares of common
stock from 25,000,000 to 200,000,000, and (iii) authorize the Company to issue
up to 20,000,000 shares of preferred stock. After filing and mailing an
Information Statement on Schedule 14C to all of its stockholders, the Company
amended its Certificate of Incorporation on July 31, 2006.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification by the Principal Executive Officer pursuant to Section 302
of the Sarbanes-0xley Act of 2002
31.2 Certification by the Principal Financial Officer pursuant to Section 302
of the Sarbanes-0xley Act of 2002
32.1 Certification by the Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification by the Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K:
Current Report on Form 8-K/A filed on July 10, 2006 is incorporated herein
by reference
Current Report on Form 8-K filed on August 4, 2006 is incorporated herein
by reference
7
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
Date: August 14, 2006
NEW FIBER CLOTH TECHNOLOGY, INC.
By: /s/ YAO DE RONG
--------------------------
Yao De Rong
Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
- ---- ----- ----
/s/ YAO DE RONG Chief Executive Officer August 14, 2006
- ----------------------- Director
Yao De Rong
/s/ PARKER SETO Chief Financial Officer August 14, 2006
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Parker Seto
8
Exhibit 31.1
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, Yao De Rong, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of New Fiber Cloth
Technology, Inc. (the "Registrant");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;
4. The Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant is made
known to us, particularly during the period in which this quarterly report
is being prepared. The Registrant has no consolidated or unconsolidated
subsidiaries;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of
the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the Registrant's internal control
over financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
control over financial reporting.
/s/ YAO DE RONG August 14, 2006
- ---------------------------------------
Yao De Rong, Chief Executive Officer
Exhibit 31.2
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, Parker Seto, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of New Fiber Cloth
Technology, Inc. (the "Registrant");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this report;
4. The Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Registrant is made
known to us, particularly during the period in which this quarterly report
is being prepared. The Registrant has no consolidated or unconsolidated
subsidiaries;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of
the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the Registrant's internal control
over financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
control over financial reporting.
/s/ PARKER SETO August 14, 2006
- ---------------------------------------
Parker Seto, Chief Financial Officer
Exhibit 32.1
Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Quarterly Report on Form 10-QSB of Park
Hill Capital III Corp. (the "Company") for the period ended June 30, 2006
as filed with the Securities and Exchange Commission, I, Yao De Rong, Chief
Executive Officer of the Company certify, pursuant to 18 U.S.C. ss.1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the
best of my knowledge and belief:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results or operations of the
Company.
/s/ YAO DE RONG August 14, 2006
- ---------------------------------
Yao De Rong
Chief Executive Officer
Exhibit 32.2
Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Quarterly Report on Form 10-QSB of Park
Hill Capital III Corp. (the "Company") for the period ended June 30, 2006
as filed with the Securities and Exchange Commission, I, Parker Seto, Chief
Financial Officer of the Company certify, pursuant to 18 U.S.C. ss.1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the
best of my knowledge and belief:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results or operations of the
Company.
/s/ PARKER SETO August 14, 2006
- ---------------------------------
Parker Seto
Chief Financial Officer