UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 2
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
FOR THE TRANSITION PERIOD FROM , 20 , TO , 20 .
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COMMISSION FILE NUMBER
000-28978
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AMERICAN FIBER GREEN PRODUCTS, INC.
(Exact Name of Registrant as Specified in its Charter)
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NEVADA 91-1705387
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
4209 RALEIGH STREET, 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:
TITLE OF EACH CLASS:
PREFERRED STOCK, PAR VALUE $0.001 PER SHARE
COMMON STOCK, PAR VALUE $0.001 PER SHARE
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Acts. . [_] YES [X] NO
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. [_] YES [X] NO
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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy of information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
232.405) during the preceding 12 months. Yes [_] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "accelerated filer and large accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [_] 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 Act) [_] YES [X] NO
The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant was approximately $4,324,801 as of the last
business day of the registrant's most recently completed second fiscal quarter,
based upon the closing sale price on the OTC:BB reported for such date. Shares
of common stock held by each officer and director and by each person who owns
10% or more of the outstanding common stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
There were 11,385,735 shares of the Registrant's $.001 par value common stock
outstanding as of August 20, 2010.
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EXPLANATORY NOTE: THIS AMENDMENT TO FORM 10-K IS BEING FILED WITH AUDIT REPORT
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008. PREVIOUS AUDIT REPORT FOR THE
YEAR ENDED DECEMBER 31, 2008, AUDITED BY ROBERT T. TAYLOR, CPA HAD BEEN
RESCINDED AS A RESULT OF THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD'S
FINDINGS AND SUBSEQUENT REVOCATION OF HIS REGISTRATION. CERTAIN FOOTNOTES HAVE
BEEN UPDATED.
AMERICAN FIBER GREEN PRODUCTS, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED
DECEMBER 31, 2009
TABLE OF CONTENTS
PAGE
PART I
Item 1. Description of Business 1
Item 1A. Risks Particular to the Company's Business 9
Item 2. Description of Property 9
Item 3. Legal Proceedings 9
Item 4. Submission Of Matters to A Vote of Security Holders 9
PART II
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and
Issuer purchase of Equity Securities
10
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of Financial Condition and
Results Of Operation 11
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure 29
Item 9T. Controls and Procedures 29
Item 9B. Other Information 30
PART III
Item 10. Directors and Executive Officers and Corporate Governance 31
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 33
Item 13. Certain Relationships and Related Party Transactions, and
Director Independence 34
Item 14. Principal Accountants Fees and Services 34
PART IV
Item 15. Exhibits 34
Signatures 35
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AMERICAN FIBER GREEN PRODUCTS, INC.
This Annual Report on Form 10-K/A and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates and
projections about Turbine Truck Engines Inc.'s industry, management beliefs, and
assumptions made by management. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict; therefore, actual results and outcomes may differ materially from what
is expressed or forecasted in any such forward-looking statements.
PART I
ITEM 1.
DESCRIPTION OF BUSINESS
Company History
American Fiber Green Products, Inc., formerly known as Amour Fiber Core, Inc.
until May 26, 2004, 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
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 with
Barb Amour and Gerald Rau, directors of Amour Fiber Core, Inc., Kenneth McCleave
(unaffiliated with the registrant prior to the merger) incorporated American
Leisure Products, Inc. (ALP) a Florida corporation, of which Kenneth McCleave
was the sole shareholder of the 100,000 issued and outstanding shares for the
purpose of merger with Amour Fiber Core, Inc. (AFC) 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 of 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.
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,
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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).
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Amour Fiber Core, Inc
AFC's primary purpose is performing reclamation manufacturing of commercial
fiberglass products from molded fiberglass waste and outdated resin waste. The
Company has advanced reclamation techniques combined with a proprietary process
to reclaim fiberglass waste products, obsolete fiberglass molded products and
outdated or excess fiberglass resins. These waste products are key ingredients
in the production of the Amour fiberglass products. Management believes that its
ability to transform fiberglass waste into viable commercial products will cause
diversion of thousands of tons of refuse from landfills and transform the waste
into recycled products with commercial applications. The Company has exclusive
rights to two patents for its technologies. Three immediate sources of income
are expected; tipping fees, sale of sub-licensing agreements and marketing of
finished goods.
American Leisure Products, Inc.
The Company's second operating subsidiary is American Leisure Products, Inc.
("ALP"), which was incorporated in Florida on September 15, 2001, in order to
merge with Amour Fiber Core, Inc. Following the merger on May 24, 2004, ALP
began to focus on producing a variety of fiberglass products that provide
recreational enjoyment, such as the "Hot Rod" car industry and the "Marine
Industry". Various molds, tooling and equipment were located or built to
facilitate this plan of operation. ALP plans to grow through acquisition and
strategic partnerships for production of fiberglass cars and boats. Our
fiberglass production facilities will also provide future revenue through the
production of fiberglass vintage car replicas, boats and other leisure products
from current molds and tooling and future acquired molds. See Plan of Operation
under Part 2, Item 7.
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CHRONOLOGY OF EVENTS
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Amour Hydro Press Inc.
Washington
March 1993
Amour Hydro Press, Inc. Merger Amour Fiber Core, Inc.
May 1996 Washington
Amour Fiber Core, Inc.
Washington
Amour Fiber Core, Inc. Merger Amour Fiber Core, Inc.
May 2004 Nevada
Amour Fiber Core, Inc.
Nevada
Amour Fiber Core, Inc. Merger American Leisure Products, Inc.
Nevada May 2004
Amour Fiber Core, Inc.
Nevada
Name Change
American Fiber Green Products, Inc.
May 2004
Wholly Owned Subsidiaries
Amour Fiber Core, Inc. American Leisure Products, Inc.
Florida Florida
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COMPANY AND BUSINESS OVERVIEW
The Company's executive management team is:
Kenneth W. McCleave Chairman of the Board
Daniel L. Hefner President, Chief Executive Officer and
Director
Michael A. Freid Chief Financial Officer
Our business plan is to engage in both fiberglass reclamation manufacturing and
production of fiberglass leisure products from virgin material.
We have developed, tested and placed into limited commercial production a new
technology for fiberglass reclamation manufacturing. We have 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. Our initial plan is to produce general planks or boards
for marine decking and seawalls. From the planking, we will continue to "brand"
our name through park benches and picnic tables, as well as a variety of
additional products.
The Company may offer contracts for sub-licensing of our patented technology.
The Company believes that licensing our technology to businesses in both foreign
and domestic markets could be an effective method of maximizing the return on
our investment in the research and development of our fiberglass recycling
technology, without significant additional capital outlays. Additionally, such
licensing agreements could increase our public visibility and general awareness
of our technology. The licensee would 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 is significantly below the production costs of
products produced by the Company, the Company may also offer to purchase product
from the licensees. Management believes that establishing licensees in various
foreign countries could be an effective means of introducing our technology into
new markets without major capital outlays.
The sub-licensing agreements would be for a ten year period with two five year
renewal extensions possible. The one-time fee for the sub-licensing will be
variable from a low of $1,000,000 up to $20,000,000 depending upon coverage
area. Construction of the processing plant will also be an income stream with
the Company providing prefabricated equipment and erection to the sub-licensee.
The revenue is variable by components, configuration and distance. Royalties
will be required from sub-licensees based upon the products and volume on a
sliding scale. Finally, Company owned facilities will produce products to be
sold commercially.
Additionally, the Company plans to generate revenues by making waste generators
aware of our proprietary process for the recycling of fiberglass. The Amour
division will offer an alternative to "filling the landfills" by offering its
process through Sub-License Agreements worldwide. Currently, most of the world's
fiberglass is not being recycled and is discarded into landfills. Waste
generators will be solicited to pay tipping fees that currently go to the
landfills for disposal of the waste, to Amour Fiber Core, Inc. By becoming a
client of American Fiber Green Products, Inc. the waste generator will now
become part of a genuine recycling operation, achieving coveted 'green status'.
Amour will receive 'inventory' at a profit or for minimal cost. To date, we have
not entered into any sub-licensing agreements and the terms and fees that are
outlined above have not yet been accepted by anyone and are subject to
negotiations.
See the discussion of the Company's plan of operations under Part 2, Item 7.
The Company's corporate offices and manufacturing facilities are presently
located at 4209 Raleigh Street, Tampa, Florida 33619. Our website is
www.americanfibergreenproducts.com.
In Western States, where the Company's facilities were originally located, the
typical cost to a manufacturer to dispose of fiberglass waste in an approved
landfill varies from $25 - $140 per ton, plus shipping costs. The disposal fee
for resin waste in an approved landfill is typically $250 - $350 per 55 gallon
drum, plus shipping costs. These costs appear to be representative of the
disposal costs of these types of waste throughout the United States. The goal of
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the Company is to expand its manufacturing capacity to support the processing of
a significant percentage of the outdated resins and molded fiberglass waste
which are shipped to landfills. The Company will accept resins and fiberglass
waste materials from a variety of suppliers. Past suppliers have included the US
Navy, The Boeing Company, various boat manufacturers and general fiberglass
manufacturers. The Company anticipates that adequate fiberglass wastes and
related materials can be obtained from domestic sources; however, should these
sources prove to be inadequate, the Company can purchase new materials to
supplement any deficiency.
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The processing fees charged by the Company will range from $100 - $250 per 55
gallon drum for disposal of resins and an average processing fee of $120 per ton
for molded fiberglass waste. The revenue from these items is driven by the
geographical location of the manufacturing facility. As the Company expands
production of the manufacturing plant, it is anticipated that the Company will
receive additional processing fees from new manufacturers who will utilize the
Company's recycling services.
GROWTH STRATEGY
Management believes that there are significant opportunities to increase
revenues and market position in the recycling and manufacturing industries
through the following:
o Optimizing our marketing plan;
o Maintaining our state-of-the-art technology position;
o Managing our raw material inventory
o Expanding our products so that new products may be offered;
o Increasing our sales volume;
o Expanding to regional offices
o Maintaining a conservative balance sheet and disciplined capital spending
program Management is presently evaluating plans for our off shore inquires
for License agreements. Our future growth will be to support our
Licensees by marketing these product lines:
o Railroad ties
o Parking stops
o Dock Fendering Systems
o Vessel Fendering Systems
o Bridge Fendering Systems
o Seawalls
Focusing on Developing Amour as a Brand Name
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Increasing Amour's reputation and name/brand recognition among its customers,
manufacturers, employees, management, shareholders, and the investment community
is a primary goal of management in 2010.
Regulatory Mandates
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The Company's business model takes into consideration regulatory mandates.
The Company maintains a website with the address
www.americanfibergreenproducts.com The Company is not including the information
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contained on its website as part of, or incorporating it by reference into, this
report on Form 10-K. The Company will make available, free of charge, through
our website, all filings as soon as reasonably practicable as we electronically
file these materials with, or otherwise furnish them to, the Securities and
Exchange Commission ("SEC").
The Company is an electronic filer with the SEC and the SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC at
http://www.sec.gov.
The Company intends to apply for and receive certification from regulatory
agencies, including the Department of Ecology and the US Environmental
Protection Agency, to accept certain wastes, including molded fiberglass, resins
and related materials. The Company's manufacturing process and facilities
require no additional environmental clearances, other than compliance with the
standard regulations and rules which are applicable to US manufacturers of
fiberglass products.
Actions by Federal, state and local governments concerning environmental
matters could result in laws or regulations that could increase the costs of
producing the products manufactured by the Company or otherwise adversely affect
demand for its products. The Company does not currently anticipate any material
adverse effect on its operations, financial conditions or competitive position
as a result of its efforts to comply with environmental requirements. Some risk
of environmental liability is inherent in the nature of the Company's business
and there can be no assurance that material environmental liabilities will not
arise. It is also possible that future developments in
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environmental regulations could lead to material environmental compliance
or cleanup costs. If the Company were to lose its certification to accept
fiberglass wastes, it would be necessary to use new resins in the manufacturing
process, which could reduce the Company's cost advantage.
In compliance with the general intent of Federal and local environmental
regulations as they apply to the disposal of outdated resins and fiberglass
wastes, some suppliers of recyclable materials require approval or certification
of the Company as one of their "authorized" recipients prior to utilization of
the Company's services. In conjunction with these procedural requirements, the
Company will seek certification that the Company's process is approved and the
Company is authorized as a recipient of outdated resins and fiberglass wastes.
The Company's products are required to meet material regulations by various
federal, state, and local government agencies and the performance standards or
requirements of its various customers. As an example, vehicle bumper stops are
required to meet standards and guidelines established by the US Department of
Transportation (DOT). Additionally, many customers request samples of products
for testing prior to committing the Company's product to open purchase order
procurement. The Company has actively supported potential customers in the
testing and evaluation of each product and anticipates the continuation of this
procedure as the Company expands its customer base and introduces new products.
How We Will Manage Our Operations
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We will electronically hand off to our in-house Customer Care Representatives to
handle customer calls, sales, verifications, billing and shipping. Customer
orders are processed by our Florida operations facility. The Florida facility is
responsible for the following duties that further enhance the customer's
experience: Both of our subsidiaries', marketing strategy is to satisfy our
customer's needs. Our products meet with instant market approval through
carefully crafted aesthetics, function, features and competitive pricing. We
hold weekly meetings with all key members of the operational areas of the
Company, including sales, compliance, billing, shipping and administration. Such
operational weekly meetings result in a thorough discussion of weekly results
and problems, with plans and goals for the week set at such meetings
Prospective customers view our material through our website with information of
how to contact Amour Fiber Core or American Leisure Products. Once a customer
contacts us, our customer care representatives will explain the benefits of our
service, qualify the prospective customer, and answers any questions they may
have. All of these factors help to solidify customer retention rates and
expected long-term brand loyalty.
The overall marketing plan for our product is based on the following
fundamentals:
Amour Fiber Core
o Verify the customers are qualified
o Establish Licensee's for each specific product they will market
o Identify a continuous supply of new opportunities, to fill the sales "funnel".
o Ship the products directly
o Maintain contact with the customer (to insure on-going education and
regulatory compliance);
o Establish a professional, distribution network
o Develop a system to minimize delivery lead time.
o Establish protocols to promote follow up sales or referrals from existing
customers.
o Obtain feedback from the customer base to continually improve the product or
the sales channel.
American Leisure Products
The overall marketing plan for our product is based on the following
fundamentals:
o Establish a professional, qualified and capable distribution dealer network.
o Identify a continuous supply of new opportunities, to fill the sales "funnel".
o Manage a system to minimize delivery lead time.
o Manage the systems to promote follow up sales or referrals from existing
customers.
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o Obtain feedback from the customer base to continually improve the product or
the sales channel.
Initially, all shipping will be direct to the consumer and produced in
our Florida facility, with the Company receiving bulk shipments from its
suppliers at the same location.
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AMERICAN LEISURE PRODUCTS
GENERAL DEVELOPMENT OF BUSINESS
American Leisure Products is a company that will produce fiber reinforced
plastic composite parts. Although ALP will produce products from its own molds
and tooling, we will also be able to serve as an outsource to many industries,
including: transportation, marine, commercial and architectural. The reputation
and experience of our production employees create a demand for our services in
the market place. Our experience in building custom molds for multiple
industries is in high demand. Generally, the explosive demand for fiberglass
recreational products to fill the demands of affluent 'baby boomers' with
leisure time on their hands bodes well for ALP and other producers for several
years to come. ALP has positioned itself to be a leader within the Fiberglass
Reinforced Plastic (FRP) industry by means of its unique designs and product
variety, as well as the experience and skill of its employees and management.
GROWTH STRATEGY
Growth is intended to be achieved by establishing brand recognition for American
Leisure Products both as an owned product line and as a reliable outsource for
the FRP manufacturing industry. ALP will increase its customer base requiring
FRP products to be built as our reputation for quality and delivery reliability
becomes known. These customers require products to be built as they do not have
the facility and/or knowledge to produce these products in-house.
In addition to the outside work, ALP intends to produce "in house" products
described below that the Company owns or controls. These products will focus on
the recreational industry. Growth will be achieved by establishing dealers for
the replica car bodies and FRP parts and by participating in rallies and
gatherings of hobbyists for the various products. Support will be available
through employee's who can assist with questions, printed material, and
commitments by the Company and the dealer at national shows, all linked through
the Company's web site. Advertisement in regional and national publications will
increase brand recognition. Our research shows that the dealer network in the
"hot markets" in the US could reach a potential of 200 plus dealers. The use of
the Internet will allow communication with worldwide customers.
PRODUCTS
ANTIQUE REPLICARS
o Nostalgic replica automobiles (commonly referred to as Hot Rods) are
provided at completion levels from the hobbyist who wants to build his own
car to the enthusiast that wants to buy a complete automobile ready to drive
away. These cars are offered in a number of package configurations to
serve every segment of the market:
o Phase 1: These parts package includes all of the major body components.
The customer will build the car from the ground up. This customer is
normally a serious hobbyist with tools, equipment and the required skills.
o Phase 2: These parts packages are provided with all of the components
required less the engine and the interior. This includes the frame,
suspension, brakes, body, steering, wheels, etc. This customer is the
hobbyist who wants to build a car and has the space, some equipment,
but wants all of the components (already fitted) and complete.
o Phase 3: This level is for the enthusiast who does not have the place, time,
equipment or skills to build an automobile.
Building the cars at various stages will reduce a major part of the dealer's
time. The Company will support the dealers with cars (nick-named rollers). These
"rollers" will be assembled, based on various stages of work with easy
step-by-step processes to complete. By building the cars in these stages, it
will allow the final car to be completed with a minimum of effort.
BOATS
ALP will produce fiberglass boats from molds and tooling that will be exclusive
to ALP. These boats have long histories and continue to receive regional and
nation recognition for their quality construction, unique style and the fierce
loyalty of their owners. ALP will produce trawlers, sailboats and flats boats
from their own exclusive lines as well as provide outsource service for other
manufacturers as need and opportunity allow.
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OTHER PRODUCTS
From time to time as opportunities arise, ALP may opt to develop other products
to build for their own account or others. The level of skill and expertise of
the management and employees of ALP enhance their imagination and market
awareness. Design and /or redesign of a product for the market is within their
in-house skills as well as the ability to build the tooling and molds that bring
those designs to reality and to market.
FUTURE GROWTH STRATEGY
We will expand the dealer network through direct marketing from the factory.
Each dealer will have an area that will be negotiated based on commitments and
the demographics that needs to be covered. The "Dealer Package" will be for a
certain minimum requirement and a commitment for delivery of additional cars for
the remaining year based on the geographic area of the dealer.
See the discussion of the Company's plan of operations under Part 2, Item 7.
ANTIQUE REPLICAR RENTAL
Our market research indicates that a business opportunity grows substantially,
when we use our own manufactured vintage car products in a rental fleet network
in vacation areas. Demand for a fresh, new, fun alternative form of
transportation is an exciting prospect for consumers and investors alike.
o Rental locations will be established throughout the country to satisfy the
demand for exotic or,premium rentals in locations such as Miami, FL, Daytona,
FL, Las Vegas, NV, Los Angeles, CA, etc. The Company intends to use these
centers to rent, service, and sell its products.
o Parts and service. The parts required to assemble these vintage cars will be
made available to our dealer network as well as retail consumers. Through the
use of our web site, both dealers and consumers will be able to interface with
the factory for their needs. The service category includes revenues from
customers for the repair of damaged items or items that need to be installed.
COMPETITION - AMOUR FIBER CORE
RECYCLING
The Company is aware of several experimental fiberglass recycling projects and a
few prototype or development stage commercial fiberglass recycling companies.
Most of these competitors utilize a process which grinds the fiberglass into a
fine powder and feeds the powder into the fluid being sprayed, under pressure,
onto fiberglass molds. The Company is not aware of any fiberglass recycling
companies which utilize any process similar to the Company's proprietary
process; however, it is possible that others are in the early stages of
developing other fiberglass recycling technologies. The Company believes that
the patent issued to the Amour Family Trust and licensed to the Company will be
sufficient to prevent any potential competitors from utilizing any process
similar to that used by the Company.
PRODUCTS
The Company will compete worldwide with a variety of manufacturers of wood,
plastic, concrete and fiberglass products, including many large industrial
corporations with resources significantly greater than those of the Company.
The Company competes with new fiberglass products based upon price. New
fiberglass products are manufactured with new resins and new glass fibers, which
add raw material costs to the wholesale price of the product. Manufacturing of
the Company's product does not incur the same raw materials costs and,
therefore, to the extent the Company utilizes recyclable resins and fiberglass
wastes, the Company's products may have a sales price advantage. There are a
number of businesses that make or could make fiberglass tables and benches. In
general, these businesses must purchase raw materials to manufacture their
products, and therefore have higher costs of goods sold.
Like other fiberglass products, the Company's products are typically sold at a
price higher than similar wood products; however like other fiberglass products,
the Company's products have strong resistance to moisture, dry rot and surface
damage. The Amour products also present features of higher strength and
durability. The Company
10
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believes these long term benefits off-set the higher price of the
product. The Company's products are similar in cost to new and recycled plastic
products. The advantages that the Company's products have over plastic products
are higher modulus of rupture and elasticity, higher compression allowance,
higher density and better structural integrity.
AMERICAN LEISURE PRODUCTS
The Company believes its products provide an overall better value for the
customer when compared to its competition, because of exceptional features such
as selling kits that allow for lower cost entry into the hobby. . Even though
the feature benefits may be compelling, ALP products will remain competitively
priced. The Company does not anticipate erosion in margin due to competition.
The leisure market is expanding rapidly and maintenance of market share will
insure growth. Most of the competitors in this market offer a cost effective,
reliable product that will meet or exceed the functional application
requirements.
The distinguishing advantages for ALP are a competitive price point, a superior
product, ongoing product evaluation, quality control and support. A complete
technical comparison is available; which gives ALP an advantage over its
competitors by providing a greater perceived value to the Customer.
EMPLOYEES
As of December 31, 2008, the Company employed three full-time employees. The
Company may engage independent contractors and other temporary employees in its
operations as required. None of the Company's employees is represented by a
labor union, and the Company considers its employee relations to be good. The
Company believes that its future success will depend in part on its continued
ability to attract, hire and retain qualified personnel.
ITEM 1A.
RISKS PARTICULAR TO THE COMPANY'S BUSINESS
The risk to the company's business model is that the time it takes to fund,
organize and begin operations will leave the door open for others to create a
competitive solution that could cause us to lose our uniqueness.
ITEM 2.
DESCRIPTION OF PROPERTY
Our office and production facilities are located at 4209 Raleigh Street, Tampa,
Florida 33619. Currently, a related company, Public Acquisition Company, has a
lease/option on the property where AFGP is located. No monthly rental fee is
charged by the related party, but there is no guarantee that this arrangement
will continue. The office is approximately 1,000 square feet and is in a
condition adequate for our operations. The production facilities will be
sufficient for the start up of AFGP. Additional adjacent property is available
for lease or purchase. The terms of the lease agreement require thirty days
written notice by either party to terminate the lease.
ITEM 3.
LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings and is not aware of any
pending or threatened claims.
The Company expects that it may become 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.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the year ended December 31, 2009, the Company did not submit any matters
to a vote of its security holders.
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PART II
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASE OF EQUITY SECURITIES
The Company's common stock is traded on the Over The Counter Bulletin Board
(OTCBB) under the symbol "AFBG". The table below sets forth the high and low bid
prices for the Company's common stock for each calendar quarter as of the start
of trade on May 22, 2008. Quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual transactions.
BID PRICES
-----------------------------
LOW HIGH
------------ -------------
FISCAL 2008
First Quarter (January 1, 2008 through March 31, 2008) N/A N/A
Second Quarter (April 1, 2008 through June 30, 2008) $0.50 $1.01
Third Quarter (July 1, 2008 through September 30, 2008) $0.10 $0.95
Fourth Quarter (October 1, 2008 through December 31, 2008) $0.07 $0.26
FISCAL 2009
First Quarter (January 1, 2009 through March 31, 2009) $0.08 $1.10
Second Quarter (April 1, 2009 through June 30, 2009) $0.60 $0.80
Third Quarter (July 1, 2009 through September 30, 2009) $0.20 $0.75
Fourth Quarter (October 1, 2009 through December 31, 2009) $0.26 $0.55
On August 20, 2010 the closing bid price of the Company's Common Stock as
reported by the OTCBB was $0.50 and there were approximately 1099 shareholders
of record of common stock and no holders of record of preferred stock.
Currently there are no outstanding warrants or options to purchase stock.
PENNY STOCK REGULATIONS:
The Company's common stock is subject to provisions of Section 15(g) and Rule
15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
commonly referred to as the "penny stock rule." Section 15(g) sets forth certain
requirements for transactions in penny stocks, and Rule 15g-9(d) incorporates
the definition of "penny stock" that is found in Rule 3a51-1 of the Exchange
Act. The SEC generally defines "penny stock" to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. As long
as the Company's common stock is deemed to be a penny stock, trading in the
shares will be subject to additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors.
Dividends
The Company does not anticipate paying any cash dividends on its Common Stock in
the foreseeable future. The Company expects to retain, if any, its future
earnings for expansion or development of the Company's business. The decision to
pay dividends, if any, in the future is within the discretion of the Board of
Directors and will depend upon the Company's earnings, capital requirements,
financial condition and other relevant factors such as contractual obligations.
There can be no assurance that dividends can or will ever be paid.
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During the year ended December 31, 2009, 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.
ITEM 6.
SELECTED FINANCIAL DATA
Not applicable.
13
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ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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 the
Company's consolidated 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."
The following management discussion should be read together with the AFGP's
consolidated financial statements included in this registration statement See
"Index to Financial Statements" at page F-1. Those consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles of the United States of America.
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.
14
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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 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, anticipated to be constructed in Florida in 2010 will produce
general planking or boards for marine decking and seawalls. Marketing the
planking we 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 our 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 $1,630 in revenue for the year ended December 31, 2009 and no
revenue for the year ended December 31, 2008. The Company had 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 2010. The Company has begun the
process of identifying 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.
Expenses
The Company incurred interest expense for year ended December 31, 2009, of
$88,412. Interest for the year ended December 31, 2008 was $87,507. Interest was
charged based on the stated interest rates set forth in the notes. Marketing,
general and administrative expenses for the same periods were $88,870 and
$87,411 respectively.
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Income tax expense.
The Company has incurred net operating losses since inception. At December 31,
2009 the Company had a net operating loss carry forward of approximately
$2,824,141. For U.S. tax purposes the net operating losses will begin expiring
in twenty years. We have had a change of ownership as defined by the Internal
Revenue Code section 382. As a result, a substantial annual limitation may be
imposed upon the future utilization of our net operating loss carry forwards.
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 numbers 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 2010
will be a significant growth year, and besides the operational business
strategies discussed above, we intend to implement the following plans in 2010
in order to maintain and expand our opportunity.
The Company continues to seek funding which will allow us 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
During the years ended December 31, 2009 and 2008 the Company used cash from
operating activities of $193,484 and $86,973, respectively. The increase in cash
used is primarily due to payment of accounts payable obligations.
During the years ended December 31, 2009 and 2008 the Company provided cash from
investing activities of $-0- and $-0- respectively.
During the years ended December 31, 2009 and 2008 the Company (used) provided
cash from financing activities of $193,559 and $86,926, respectively. This
increase of cash provided by financing activities is primarily due to a loan
received from PAC (Public Acquisition Company).
The aggregate value of outstanding loans as of December 31, 2009 is $630,244.
This amount is comprised of notes payable of $293,035 and long-term payables of
$344,209. Notes payable are due on demand, with accumulated interest on a
compound basis at rates specified in each note. Long-term payables of $344,209
includes $341,685 due to PAC, a related party, of which $314,670 bears interest
with terms similar to those of the notes payable. The remaining balance of
long-term payables of $2,524 has no specified terms or conditions.
Cash flows from operations have been derived primarily from increased
liabilities and issuance of equity. As of December 31, 2009, working capital
deficit was $232,141. As current operating cash flow is insufficient to finance
the Company's planned growth, we will continue to seek additional financing from
alternative sources, including bank loans, supplier agreements and other
financing arrangements.
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The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. For the year ended December 31, 2009, the
Company had a net loss of $164,896, cash used by operations of $193,484, and
negative working capital of $232,141. 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 commence 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 during the next twelve
months largely from debt and equity financings until such time that funds
provided by operations are sufficient to fund working capital requirements.
However, there can be no assurance that any such financing will be available,
and that if available, that it will be available on terms that are favorable or
acceptable to the Company.
The planned construction of the Pilot Plant is expected to cost approximately
$525,000. The Company plans to acquire funding for the construction from outside
investors, establishment of license agreements, government grants or through a
stock offering.
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.
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 has been issued.
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Capital expenditures
We expect to incur capital expenditures in the future. Since our inception, the
research and development has been completed. For each division in 2010-2011, we
expect to have total capital expenditures of $525,000.00 -- Amour Fiber Core
$250,000 for the pilot plant and American Leisure Products $275,000.
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OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company are in accordance with generally accepted
accounting principles of the United States of America, and their basis of
application is consistent. Outlined below are those policies considered
particularly significant:
The preparation of 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 financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Common stock transactions for services are recorded at either the fair value of
the stock issued or the fair value of the services rendered, whichever is more
evident on the day that the transactions are executed. The certificates must be
issued subsequent to the transaction date.
Research and development costs are charged to operations when incurred and are
included in operating expenses.
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.
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, 5) sales of other fiberglass products
(reproduction cars, boats). Revenue is recorded when products and services are
provided to the customer.
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.
Effect of Inflation
We do not believe that inflation has had a material effect on our business,
results of operations or financial condition during the past two years.
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NEW ACCOUNTING PRONOUNCEMENTS
In October 2009, the FASB issued Accounting Standard Update ("ASU") No. 2009-13,
Multiple-Deliverable Revenue Arrangements ("ASU 2009-13") and No. 2009-14,
Certain Revenue Arrangements that include Software Elements ("ASU 2009-14").
These standards update FASB ASC 605, Revenue Recognition ("ASC 605") and FASB
ASC 985, Software ("ASC 985"). The amendments to ASC 605 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy. The amendments
to ASC 985 remove tangible products from the scope of software revenue guidance
and provide guidance on determining whether software deliverables in an
arrangement that includes a tangible product are covered by the scope of the
software revenue guidance. These amendments to ASC 605 and ASC 985 should be
applied on a prospective basis for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010, with
early adoption permitted. The Company adopted these amendments on January 1,
2010. Management does not believe that the adoption of this standard will have a
material impact on the Company's financial statements.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures ("ASU 2010-06"). This standard updates FASB ASC 820, Fair Value
Measurements ("ASC 820"). ASU 2010-06 requires additional disclosures about fair
value measurements including transfers in and out of Levels 1 and 2 and separate
disclosures about purchases, sales, issuances, and settlements relating to Level
3 measurements. It also clarifies existing fair value disclosures about the
level of disaggregation and about inputs and valuation techniques used to
measure fair value. The standard is effective for interim and annual reporting
periods beginning after December 15, 2009 except for the disclosures about
purchases, sales, issuances and settlements which is effective for fiscal years
beginning after December 15, 2010 and for interim periods within those fiscal
years. The Company adopted ASU 2010-06 on January 1, 2010, which had no material
impact on the financial statements.
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.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
AMERICAN FIBER GREEN PRODUCTS, INC.
Consolidated Financial Statements
For The Years Ended December 31, 2009 and 2008
Reports of Independent Registered Public Accounting Firm
Contents
Report of Independent Registered Public Accounting Firm
Financial Statements:
Consolidated Condensed Balance Sheets
Consolidated Statements of Operations
Consolidated Statement of Changes in Stockholders' Deficit Consolidated
Condensed Statements of Cash Flows Notes to Audited Consolidated Financial
Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders: American Fiber Green Products, Inc.
I have audited the balance sheets of American Fiber Green Products, Inc.
as of December 31, 2009 and 2008, the related statements of operation, changes
in stockholders' deficit, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. My
responsibility was to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
I plan and perform the audits to obtain reasonable assurance about whether the
financial statements were free of material misstatement. The Company was not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that were
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provide a reasonable basis for
my opinion.
In my opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of American Fiber Green Products,
Inc. as of December 31, 2009 and 2008, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As reflected in the
accompanying financial statements, the Company is without significant operating
revenues and has suffered recurring losses from operations and has an
accumulated deficit. As discussed in note 2, the current losses and the
Company's working capital shortage indicated that there is substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are described in note 2. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Peter Messineo, CPA
Palm Harbor, Florida
August 19, 2010
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AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
DECEMBER 31, DECEMBER 31,
2009 2008
------------ -------------
ASSETS
Current assets:
Cash $ 100 $ 25
Interest receivable, related parties 48,313 35,926
-------------- ---------------
Total current assets 48,413 35,951
-------------- ---------------
Notes receivable, net 98,405 98,405
Furniture and equipment, net of accumulated depreciation of $27,500 (2009) and
$22,500 (2008) 22,500 27,500
-------------- ---------------
$ 169,318 161,856
============== ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable, including related party payables of $134,131 (2009) and
$115,766 (2008) $ 265,624 $ 350,308
Accrued expenses 4,932 4,450
Subscription payable 10,000 10,000
------------ -------------
Total current liabilities 280,556 364,758
Notes payable 293,035 298,035
Deferred wages 745,697 682,697
Accrued interest 658,265 579,723
Other payables - related parties 344,209 224,192
-------------- ---------------
Total liabilities 2,321,762 2,149,405
Stockholders' deficit:
Preferred stock; $0.001 par value; 5,000,000 shares authorized; 0 shares issued
and outstanding
Common stock; $0.001 par value; 350,000,000 shares authorized; 11,385,735 (2009)
and 11,385,735 (2008) shares issued and outstanding 11,386 11,386
Additional paid in capital 2,423,383 2,423,383
Accumulated deficit (4,587,213 ) (4,422,318 )
------------ -------------
Total stockholders' deficit (2,152,444 ) (1,987,549 )
$ 169,318 $ 161,856
============== ===============
The accompanying notes are an integral part of the financial
statements.
24
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AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
DECEMBER 31, DECEMBER 31,
2009 2008
---------------- ---------------
Other Expenses (Income):
Marketing, general and administrative expenses $ 88,870 $ 87,411
Interest expense 88,412 87,507
Interest income (12,387 ) (13,258 )
------------------ -----------------
Net loss $ (164,895 ) $ (161,660 )
Net loss per share:
Basic $ (.01 ) $ (.02 )
Diluted $ (.00 ) $ (.00 )
Weighted average number of common shares:
Basic 11,385,735 10,622,152
Diluted 26,950,735 25,415,152
---------------- ---------------
The accompanying notes are an integral part of the financial
statements.
25
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AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
COMMON COMMON DDITIONAL
STOCK STOCK PAID IN ACCUMULATED
SHARES AMOUNT A CAPITAL DEFICIT TOTAL
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2007 9,249,628 $ 9,250 $ 2,318,510 $(4,260,658 ) $(1,932,898 )
Issuance of common stock for debt 2,120,188 2,120 104,889 107,009
Transfer agent share balance
adjustment 15,919 16 (16)
Net loss (161,660 ) (161,660 )
------------ -------------- -------------- -------------- --------------
Balance, December 31, 2008 11,385,735 $ 11,386 $ 2,423,383 $(4,422,318 ) $(1,987,549 )
Net loss (164,895 ) (164,895 )
------------ -------------- -------------- -------------- --------------
Balance, December 31, 2009 11,385,735 11,386 2,423,383 (4,587,213 ) (2,152,444 )
============ ============== ============== ============== ==============
The accompanying notes are an integral part of the financial
statements.
26
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AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
DECEMBER 31, DECEMBER 31,
2009 2008
------------- -------------
OPERATING ACTIVITIES
Net loss $ (164,895 ) $ (161,660 )
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation 5,000 5,000
(Increase) decrease in:
Interest receivable (12,387 ) (11,583 )
Increase (decrease) in:
Accrued expenses 482 4,450
Accounts payable (84,684 ) 2,520
Deferred compensation 63,000 74,300
---------------- ---------------
Net cash used by operating activities (193,484 ) (86,973 )
---------------- ---------------
INVESTING ACTIVITIES
Net cash provided (used) by investing activities
---------------- ---------------
FINANCING ACTIVITIES
Issuance of common stock 107,009
Proceeds from issuance (settlement) of notes payable (5,000 ) (36,000 )
Increase in interest payable to shareholders 78,542 13,267
Proceeds from issuance of other long term liabilities 120,017 2,650
---------------- ---------------
Net cash provided by financing activities 193,559 86,926
---------------- ---------------
NET INCREASE (DECREASE) IN CASH 75 (47 )
CASH AT BEGINNING OF YEAR 25 72
---------------- ---------------
CASH AT END OF YEAR $ 100 $ 25
---------------- ---------------
The accompanying notes are an integral part of the financial
statements.
27
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AMERICAN FIBER GREEN PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
NOTE 1 - ORGANIZATION AND BUSINESS
American Fiber Green Products, Inc. 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
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 of 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.
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
28
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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)
29
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NOTE 2 - GOING CONCERN
The accompanying consolidated 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 is
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 anticipates beginning construction of a pilot plant within the next 6
months and expects to complete the project and to begin production of scrapped
fiberglass reclamation as a raw material within the next 18 months. Although the
cost of construction is not readily determinable, the Company estimates the cost
to be approximately $250,000 for the pilot plant and as much as $1.6M for a full
function plant. 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 inter-company 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. 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, 5) sales of other fiberglass products
(reproduction cars, boats). Revenue is recorded when products and services are
provided to the customer.
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.
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
resulting from temporary differences. Such temporary differences result from
differences in the carrying value of assets and liabilities for tax and
financial reporting purposes. The deferred tax assets and liabilities represent
30
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the future tax consequences of those differences, which will either be taxable
or deductible when the assets and liabilities are recovered or settled.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized.
The Company adopted the provisions of FASB ASC 740-10 "Uncertainty in Income
Taxes" (ASC 740-10), on January 1, 2007. The Company has not recognized a
liability as a result of the implementation of ASC 740-10. A reconciliation of
the beginning and ending amount of unrecognized tax benefits has not been
provided since there is no unrecognized benefit since the date of adoption. The
Company has not recognized interest expense or penalties as a result of the
implementation of ASC 740-10. If there were an unrecognized tax benefit, the
Company would recognize interest accrued related to unrecognized tax benefits in
interest expense and penalties in operating expenses.
31
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The fair value of financial instruments approximated their carrying values at
December 31, 2009. 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 December 31, 2009, there existed notes payable with conversion
features (see Notes Payable footnote) which had dilutive effect. 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 December 31, 2009
and 2008, there were no restricted 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 October 2009, the FASB issued Accounting Standard Update ("ASU") No. 2009-13,
Multiple-Deliverable Revenue Arrangements ("ASU 2009-13") and No. 2009-14,
Certain Revenue Arrangements that include Software Elements ("ASU 2009-14").
These standards update FASB ASC 605, Revenue Recognition ("ASC 605") and FASB
ASC 985, Software ("ASC 985"). The amendments to ASC 605 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy. The amendments
to ASC 985 remove tangible products from the scope of software revenue guidance
and provide guidance on determining whether software deliverables in an
arrangement that includes a tangible product are covered by the scope of the
software revenue guidance. These amendments to ASC 605 and ASC 985 should be
applied on a prospective basis for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010, with
early adoption permitted. The Company adopted these amendments on January 1,
2010. Management does not believe that the adoption of this standard will have a
material impact on the Company's financial statements.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures ("ASU 2010-06"). This standard updates FASB ASC 820, Fair Value
Measurements ("ASC 820"). ASU 2010-06 requires additional disclosures about fair
value measurements including transfers in and out of Levels 1 and 2 and separate
disclosures about purchases, sales, issuances, and settlements relating to Level
3 measurements. It also clarifies existing fair value disclosures about the
level of disaggregation and about inputs and valuation techniques used to
measure fair value. The standard is effective for interim and annual reporting
periods beginning after December 15, 2009 except for the disclosures about
purchases, sales, issuances and settlements which is effective for fiscal years
beginning after December 15, 2010 and for interim periods within those fiscal
years. The Company adopted ASU 2010-06 on January 1, 2010, which had no material
impact on the financial statements.
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.
32
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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 (past maturity) 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. Increases for 2007 and 2008 were waived. A 5%
increase was effective 1/1/09 for a total annual rate under the employment
agreement of $63,000. The employment contract will be renewed in 2010. The
Company expects all terms and conditions to remain consistent with the previous
contract.
The Company anticipates that it will enter into employment contracts with two
other key employees in 2010 under similar terms and conditions. Specifics will
be determined by the Compensation Committee and approved by the Board of
Directors.
NOTE 6 - STOCKHOLDERS' EQUITY
Founder Shares
In May 2004, the Board of Amour Fiber Core Inc. a Washington corporation
approved to reincorporate it 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.
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 of 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.
33
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At the time of this reverse merger, in accordance with SFAS 141 (pilcrow)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 were treated as
administrative expense in the period incurred.
34
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NOTE 7 - RELATED PARTY TRANSACTIONS
The Company is currently operating in a facility leased and operated by Tampa
Fiberglass Inc. (TFI). TFI is owned by Ken McCleave, Chairman of AFGP. No
occupancy cost has been charged to AFGP by TFI as of December 31, 2009. There is
no assurance that this favorable treatment will continue in the future if AFGP
begins to facilitate operations at that site.
Accounts payable includes related party payables of $134,131 and $115,766 as of
December 31, 2009 and 2008, respectively.
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. Three 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.
Accrued Salaries as of December 31, 2009:
Barb Amour $ 110,575
Les Amour $ 49,500
Kristal McCleave $ 99,967
Kenneth McCleave $ 485,655
35
================================================================================
Salary has been accrued for Ken McCleave, Chairman of AFBG. Mr. McCleave's
salary continues to accrue at a rate of $5,250 per month. 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.
NOTE 9 - NOTES PAYABLE
The Company carries notes payable to the following individuals:
2009 2008
------------- -------------
Robert Chlipala $ 133,000 $ 133,000
Gerald Rau $ 101,500 $ 101,500
Les Smyth $ 50,000 $ 50,000
Ken McCleave $ 1,535 $ 1,535
NOTE PAYABLE TO: NOTE AMOUNT: NOTE DATE: INTEREST RATE:
- --------------------------------------------------- ----------------- ------------------- ----------------
Rau $ 101,500 4/1/2000 8.75 %
Smyth $ 30,000 9/15/1998 14.00 %
Smyth $ 10,000 6/8/1999 14.00 %
Smyth $ 10,000 6/14/1999 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 %
During 2008, four notes plus accrued interest were converted to stock at $0.05
per share according to note holder agreements. The Company has also negotiated
with note holders and assigns to have interest after March 31, 2008 forgiven on
four additional notes.
Interest accrued on the above notes per individual is as follows:
DECEMBER 31,2009 DECEMBER 31,2008
--------------- ---------------
Rau $ 91,336 $ 91,336
Smyth $ 131,320 $ 131,320
Chlipala $ 271,077 $ 232,456
McCleave $ 2,106 $ 1,770
36
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In a 2004 the Company agreed to convert loans, including accrued interest, into
shares of common stock at a rate of $.05, the then fair market value of the
shares. The total original amount of the loans is $284,500 plus accrued interest
at a weighted average rate of 13.6% is $493,733 and $455,111 for the years ended
December 31, 2009 and 2008, respectively. The total common shares, if converted,
would be approximately15,565,000 and 14,793,000 as of December 31, 2009 and
2008, respectively.
NOTE 10 - OTHER LONG-TERM 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), and Daniel L. Hefner (President and Chief Executive Officer
of AFGP) for cash advances made to AFGP.
2009 2008
------------- -------------
Due to PAC $ 341,685 $ 221,148
Due to Nimble Boat Works $ 1,574 $ 2,094
Due to Dan Hefner $ 950 $ 950
37
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Company loans payable to PAC in the amount of $314,670, 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 May 14, 2004 10.00 %
Loan From PAC $ 49,550 July 29, 2004 10.00 %
Loan From PAC $ 20,300 August 20, 2004 10.00 %
Loan From PAC $ 60,610 December 28, 2004 10.00 %
Loan From PAC $ 9,692 November 6, 2003 10.00 %
Loan From PAC $ 100,000 October 3, 2009 8.00 %
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 $153,816 and $117,964 at December 31,
2009 and 2008, respectively.
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 $2,824,140 at December 31, 2009 and
$2,800,787 at December 31, 2008. The loss carry forwards expire beginning 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:
2009 2008
-------------- --------------
Accumulated deficit $ 4,587,213 $ 4,422,318
Difference between tax and book for accrued interest and deferred wages
(1,403,962 ) ( 1,262,420 )
Other (359,111 ) (359,111 )
---------------- ----------------
2,824,140 2,800,787
Valuation allowance (2,824,140 ) (2,800,787 )
---------------- ----------------
$ 0 $ 0
================ ================
The valuation allowance increased by $23,353 during the year ended December 31,
2009 and $74,093 during the year ended December 31, 2008.
ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISLCOSURE
On February 8, 2010, the Company dismissed our independent registered
auditor, Robert T. Taylor of Bothell Washington, based on their notification to
us of partner service limitation. On the same day, we engaged Peter Messineo,
CPA of Palm Harbor Florida, as our new independent registered auditor.
ITEM 9T
DISCLOSURE CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our Chief Executive Officer and our Chief Financial Officer, we carried out an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act. Management conducted its evaluation based on the framework in
Internal Control - Integrated Framework issued by the Committee on Sponsoring
Organizations of the Treadway Commission (COSO). Based on that evaluation, our
Chief Executive Officer and our Chief Financial Officer have concluded that, at
December 31, 2009, such disclosure controls and procedures were effective.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rue 13a-15(f)
under the Exchange Act). Internal control over financial reporting is a process,
including policies and procedures, designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with U.S.
generally accepted accounting principles. Our management assessed our internal
control over financial reporting based on the Internal Control - Integrated
Framework issued by the COSO. Based on the results of this assessment, our
management concluded that our internal control over financial reporting was
effective as of December 31, 2009 based on such criteria.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our disclosure controls and procedures are designed to provide reasonable, not
absolute, assurance that the objectives of our disclosure control system are
met. Because of inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues, if any, within
a company have been detected. Based on their evaluation as of the end of the
period covered by this report, management concluded that our disclosure controls
and procedures were sufficiently effective to provide reasonable assurance that
the objectives of our disclosure control system were met.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting that
occurred during the fourth fiscal quarter ended December 31, 2009 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
This Annual Report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this Annual Report. ITEM 9B.
30
OTHER INFORMATION
None
PART III
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the names and ages of our current directors and
executive officers, their principal offices and positions The Board of Directors
elects our executive officers annually. Our directors serve one-year terms or
until their successors are elected and accept their positions. The executive
officers serve terms of one year or until their death, resignation or removal by
the Board of Directors. There are no family relationships or understandings
between any of the directors and executive officers. In addition, there was no
arrangement or understanding between any executive officer and any other person
pursuant to which any person was selected as an executive officer
NAME OF DIRECTOR OR EXECUTIVE OFFICER AGE CURRENT POSITION AND OFFICE
- ----------------------------------------------- ------------ -------------------------------------------------
Daniel L. Hefner 59 President, Chief Executive Officer and Director
Kenneth W. McCleave 57 Chairman of the Board of Directors
Michael A. Freid 57 Chief Financial Officer
Daniel L. Hefner, 59, has been President of American Commerce Solutions, Inc.
(OTC: BB: AACS) since September, 2002 and Chief Executive Officer since March
2002. He previously served as Executive Vice President from June 2000 to June
2001 and as interim President from June 2001 through February 2002. Mr. Hefner
has been a director of the Company since June 2000. Mr. Hefner formerly served
as President of International Machine and Welding, Inc. He formerly served as
President, and is now serving as Vice President of International Commerce and
Finance, Inc. an investment/consulting company for manufacturing and technology
companies, and he has held these positions since August 1999. Mr. Hefner has
been active for over twenty years as an independent consultant to individuals or
business seeking to begin operations or to create turnarounds of existing
business. Mr. Hefner additionally maintains licensure as a Florida Real Estate
Broker. During the same period, Mr. Hefner also operated his own independent
real estate brokerage operation where he continues to serve as President and
Chief Executive Officer. From March to October 1999, Mr. Hefner was Chief
Operating Officer for Chronicle Communications, Inc. (OTCBB: CRNC), a Tampa
based printer and publishing firm.
Kenneth W. McCleave is a 57 year old entrepreneur with a special knack for sales
and marketing. Starting in business as a boiler-room, telemarketing top
salesman, Mr. McCleave rose to owner, CEO and President of multi-million dollar
Sports Holding, Inc. selling and distributing motorcycle and water craft parts
and boat manufacturing from 1987 through 1990 and United Printing and
Publishing, a web printing company from 1990 through 1998. In 1998 Mr. McCleave
orchestrated the sale of UPP to the publicly traded, Chronicle Communications,
Inc. and became the President of this OTC: Bulletin Board holding company. After
assuring proper transition to the new management, Mr. McCleave left to found his
latest ventures, Affordable Fiberglass Group and American Leisure Products,
Inc., which merged with Amour Fiber Core Inc. a Washington State based
fiberglass recycling company.
Throughout his business career Mr. McCleave has been personally responsible for
the success of the sales and marketing of the products and services offered to a
wide variety of customers. Gifted at setting up efficient manufacturing and
recycling operations Mr. McCleave has a penchant for maximizing limited
resources. He has demonstrated a tireless drive to succeed and with proper
capitalization will move this latest venture into high visibility and
profitability with a service and group of products that will delight the
concerned and investing public.
Michael A. Freid, 57, graduated from Western Illinois University in 1974 with a
BBA in Accountancy. He earned his CPA certificate in 1978. The majority of Mr.
Freid's career has been with international manufacturing companies where he held
various positions in accounting, internal auditing, and operations management.
31
Michael Freid began his career in 1974 with Bunker-Ramo Corporation, where he
held accounting, plant controller and internal audit positions through 1978.
From 1978 through 1996 he advanced through various management and executive
positions with Borg-Warner Corporation and Borg-Warner Automotive. He served as
a Director and Group VP of Finance for three of Borg Warner Automotive's four
operating groups. In this capacity, Mr. Freid was responsible for all financial
activities and operational evaluation of domestic and international
manufacturing facilities and technical centers. During 1994 - 1995, he also
served as General Manager of a BWA joint venture transmission and transfer case
manufacturing business in Beijing, China. As a Consultant, he evaluated
financial systems and controls from 1997 to 1998. From 1998 to 2003, Mr. Freid
was with Key Safety Systems, an automotive components manufacturer of steering,
seatbelt and airbag systems. At KSS, Mr. Freid served as Corporate Controller
and was responsible for all financial, operational and compliance reporting.
Primary achievements at KSS were the integration of various newly acquired
international businesses, negotiation and formation of a Chinese joint venture
in Tianjin, PRC, implementation of an integrated global financial reporting
system and internal control development to ensure compliance with Sarbanes-Oxley
in concert with Internal Audit assessments.
Since 2004, Mr. Freid has pursued entrepreneurial goals, opening two Robeks
Juice locations in the Brandon, Florida area.
AUDIT COMMITTEE
The Audit Committee consists of Michael Freid, Daniel Hefner and Kenneth
McCleave. The Audit Committee selects the independent auditors; reviews the
results and scope of the audit and other services provided by the Company's
independent auditors and reviews and evaluate the Company's internal control
functions. The board of directors has determined that Michael Freid is the audit
committee "financial expert"; as such term is defined under federal securities
law. However, as an Officer of the Company, he is not considered "independent"
as disclosed in Management's Report on Internal Control Over Financial
Reporting. He is an expert by virtue of: (i) education and experience as a
principal financial officer, principal accounting officer, controller, public
accountant or auditor or experience in one or more positions that involve the
performance of similar functions; (ii) experience actively supervising a
principal financial officer, principal accounting officer, controller, public
accountant, auditor or person performing similar functions; (iii) experience
overseeing or assessing the performance of companies or public accountants with
respect to the preparation, auditing or evaluation of financial statements; and
(iv) other relevant experience.
CODE OF ETHICS
We have adopted a code of ethics meeting the requirements of Section 406 of the
Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed
to deter wrong doing and promote honest and ethical conduct; provide full, fair,
accurate, timely and understandable disclosure in public reports; comply with
applicable laws; ensure prompt internal reporting of violations; and provide
accountability for adherence to the provisions of the code of ethics.
ITEM 11.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid to or accrued, during
the years ended December 31, 2009 and 2008 to AFGP's highest paid executive
officers. No restricted stock awards, long-term incentive plan payout or other
types of compensation, other than the compensation identified in the chart
below, were paid to these executive officers during that fiscal year.
SUMMARY COMPENSATION TABLE
SALARY BONUS STOCK OPTION ALL OTHER
NAME YEAR ($) ($) AWARDS AWARDS COMPENSATION TOTAL
PRINCIPAL POSITIONS ENDED ($) ($) (A) ($) ($)
- ------------------------------- -------- ------- --------- ---------- ------------- ----------
Kenneth McCleave, 2009 63,000 -- -- -- (3) -- 63,000
Chairman Of the Board 2008 60,000 -- -- -- (1) -- 60,000
Daniel L. Hefner 2009 -- -- -- -- (3) -- --
Chief Executive Officer and 2008 -- -- -- -- (2) -- --
President
Michael Freid 2009 (2) -- -- -- -- (3) -- --
Chief Financial Officer 2008 -- -- -- -- (4) -- --
We may hire additional executive employees and/or change the compensation paid
to and benefits received by our current executive employees, as our Board of
Directors deems advisable or necessary. We plan to reimburse our executive
employees for all travel expenses incurred in connection with the business of
the Company. To date, the Company's Board of Directors has not adopted any
retirement, pension, profit sharing or other similar programs for our executive
employees.
No officers or directors of the Company have received compensation in excess of
$100,000 per year.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The following table sets forth information as to the ownership of shares of our
Common Stock as of December 31, 2009 with respect to (i) holders known to
American Fiber Green Products who beneficially own more than five percent (5%)
of the outstanding Common Stock, (ii) each director, (iii) President and certain
other executive officers, and (iv) all directors and executive officers as a
group. The percentage of ownership has been calculated based on 11,385,735
shares of Common Stock outstanding as of December 31, 2009.
TITLE OF NUMBER OF PERCENT OF
CLASS NAME AND ADDRESS OF BENEFICIAL OWNER (1) SHARES CLASS
- ---------------- ------------------------------------------------------ -------------- ------------
Common Kenneth McCleave * 1.916,854 16.83 %
9401 Oak Street.,
Riverview, FL 33569
Daniel L. Hefner *
1502 N. Taylor Road,
Common Brandon, FL 33510 1,801,240 15.82 %
Robert Maxwell
N/A
Common Florida 1,801,240 15.82 %
Michael A. Freid *
2208 Laurel Oak Drive
Common Valrico, FL 33596 100,000 0.88 %
Barb Amour
Common Monroe, WA 98272 673,111 5.91 %
*ALL OFFICERS AND DIRECTORS AS A GROUP (3 PERSONS) 3,818,094 33.53 %
- -------
As used in this table, "beneficial ownership" means the sole or shared power to
vote or to direct the voting of a security or the sole or shared investment
power with respect to a security (i.e., the power to dispose of or to direct the
disposition of a security)
ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is currently operating in a facility leased and operated by Public
Acquisition Company (PAC). PAC is owned by Kenneth McCleave, Chairman of AFGP.
No occupancy cost has been charged to AFGP by PAC as of December 31, 2009. There
is no assurance that this favorable treatment will continue in the future if
AFGP begins to facilitate operations at that site.
The Company carries a Note Payable to Kenneth McCleave, Chairman of AFGP in the
amount of $1,535 for a loan made to the Company. The note bears an annual
interest rate of 10% and is payable on demand. Refer to Note 8 of the
consolidated financial statements.
The Company carries long-term liabilities with PAC (Public Acquisition Company -
a wholly owned business of Kenneth McCleave, Chairman of AFGP), Nimble Boat
Works (a wholly owned business of Ken McCleave, Chairman of AFGP) and Daniel
Hefner (President and Chief Executive Officer of AFGP) for cash advances made to
AFGP. Refer to Note 9 of the consolidated financial statements.
The Company carries notes receivable from American Commerce Solutions (ACS) and
Chariot Manufacturing Company. Daniel Hefner (President and Chief Executive
33
Officer of AFGP) is also President and Chief Executive Officer of ACS. Chariot
Manufacturing Company is a wholly owned subsidiary of ACS. Kenneth McCleave
(Chairman of AFGP) is also Chief Operating Officer and General Manager of
Chariot Manufacturing Company.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
ITEM 14.
PRINCIPAL ACCOUNTANTS FEES AND SERVICES
Audit Fees
The aggregate audit fees billed for the years ended December 31, 2009 was
$1,250. Audit services include the audits of the financial statements included
in the Company's annual reports on Form 10-K and reviews of interim financial
statements included in the Company's quarterly reports on Form 10-Q.
Audit-Related Fees
None.
Tax Fees
None
All Other Fees
None
Audit Committee Pre-Approval Process, Policies and Procedures
Our principal auditors have performed their audit procedures in accordance with
pre-approved policies and procedures established by our Board of Directors. Our
principal auditors have informed our Board of the scope and nature of each
service provided. With respect to the provisions of services other than audit,
review, or attest services, our principal accountants brought such services to
the attention of our Board of Directors, or one or more members of our Board of
Directors to whom authority to grant such approval had been delegated by the
Board, prior to commencing such services.
ITEM 15.
EXHIBITS
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*
34
31.1
Certification of the Chief Financial Officer
31.2
Certification of the Principal Executive Officer
32 Certification pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
- --------------
*These exhibits are filed as part of Form 10SB registration statement filed with
the SEC on February 22, 2007 and incorporated by reference.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: August 23, 2010 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
35
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF
2002 AND RULE 13A-14 OF THE EXCHANGE ACT OF 1934
CERTIFICATION
I, Daniel L. Hefner, certify that:
1. I have reviewed this annual report on Form 10-K/A of American Fiber Green
Products, Inc.;
2. Based on my knowledge, this 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 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)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) 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, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
c) 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
d) 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 the 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.
Date: August 23, 2010 /s/ Daniel L. Hefner
-----------------------------------------
Daniel L. Hefner
President and Principal Executive Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF
2002 AND RULE 13A-14 OF THE EXCHANGE ACT OF 1934
CERTIFICATION
I, Michael A. Freid, certify that:
1. I have reviewed this annual report on Form 10-K/A of American Fiber Green
Products, Inc.;
2. Based on my knowledge, this 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 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)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) 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, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
c) 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
d) 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 the 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.
Date: August 23, 2010 /s/ Michael A. Freid
-------------------------------------
Michael A. Freid
Chief Financial Officer and Principal
Accounting Officer
EXHIBIT 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of American Fiber Green Products, Inc.,
(the "Company") on Form 10-K/A for the period ended December 31, 2009 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Daniel L. Hefner, President and Principal Executive Officer of the Company,
certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: August 23, 2010 /s/ Daniel L. Hefner
-----------------------------------
Daniel L. Hefner
President and Principal Executive
Officer
EXHIBIT 32.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of American Fiber Green Products, Inc.,
(the "Company") on Form 10-K/A for the period ended December 31, 2009 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Michael A. Freid, Chief Financial Officer and Principal Accounting Officer of
the Company, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: June 21, 2010 /s/ Michael A. Freid
-------------------------------------
Michael A. Freid
Chief Financial Officer and Principal
Accounting Officer