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, 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).
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.
CHRONOLOGY OF EVENTS --------------------
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
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
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 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.
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 --------------------------------------------
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 -------------------
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 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 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 ---------------------------------
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. 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.
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.
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 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, 2010, 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.
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.
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.
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.
ITEM 4. REMOVED AND RESERVED
PART II
ITEM 5.
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
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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
FISCAL 2010
First Quarter (January 1, 2010 through March 31, 2010) $0.47 $0.65
Second Quarter (April 1, 2010 through June 30, 2010) $0.26 $0.62
Third Quarter (July 1, 2010 through September 30, 2010) $0.40 $0.70
Fourth Quarter (October 1, 2010 through December 31, 2010) $0.40 $0.70
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.
During the year ended December 31, 2010, 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.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7.
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 . 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.
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 $695 in other revenue for the year ended December 31, 2010 and $1,630 in revenue for the year ended December 31, 2009 that included in the Other expense/Income amounts. 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 2011. 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, 2010, of $98,552. Interest for the year ended December 31, 2009 was $88,412. Interest was charged based on the stated interest rates set forth in the notes. Marketing, general and administrative expenses for the same periods were $97,633 and $90,500 respectively.
Income tax expense.
The Company has incurred net operating losses since inception. At December 31, 2010 the Company had a net operating loss carry forward of approximately $4,767,996. 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 2011 will be a significant growth year, and besides the operational business strategies discussed above, we intend to implement the following plans in 2011 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, 2010 and 2009 the Company used cash from operating activities of $94,804 and $193,484, respectively. The decrease in cash used is primarily due to less payments on accounts payable obligations.
During the years ended December 31, 2010 and 2009 the Company used cash in investing activities of $-0- and $-0- respectively.
During the years ended December 31, 2010 and 2009 the Company provided cash from financing activities of $94,745 and $193,559, respectively. This decrease of cash provided by financing activities is primarily due to the decrease in other notes payable related party.
The aggregate value of outstanding loans as of December 31, 2010 is $640,209. This amount is comprised of convertible notes payable of $296,035 and notes payables - related party of $354,174. Notes payable are due on demand, with accumulated interest on a compound basis at rates specified in each note. Notes payable - related party of $354,174 includes $341,685 due to one related party. Cash flows from operations have been derived primarily from increased liabilities and issuance of equity. As of December 31, 2010, working capital deficit was $2,449,132. 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.
The Company's financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended December 31, 2010, the Company had a net loss of $180,783, cash used by operations of $94,804, and negative working capital of $2,449,132. 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 $0.001, none has been issued.
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 2011-2012, we expect to have total capital expenditures of $525,000 -- Amour Fiber Core $250,000 for the pilot plant and American Leisure Products $275,000.
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 other 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.
NEW ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements issued by FASB (including 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.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
AMERICAN FIBER GREEN PRODUCTS, INC.
Consolidated Financial Statements
For The Years Ended December 31, 2010 and 2009 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
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, 2010 and 2009, 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, 2010 and 2009, 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 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 April 15, 2011
AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
The accompanying notes are an integral part of the financial statements.
AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
The accompanying notes are an integral part of the financial statements.
AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
The accompanying notes are an integral part of the financial statements.
AMERICAN FIBER GREEN PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of the financial statements.
AMERICAN FIBER GREEN PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
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 corporation) became a wholly owned subsidiary of American Fiber Green Products, Inc. The assets and opportunities of American Fiber Green Products, Inc. (f/k/a Amour Nevada and Amour Washington) were moved to a newly formed, Amour Fiber Core, Inc., ( a Florida Corporation) as a wholly owned subsidiary. The resulting structure is American Fiber Green Products, Inc. (Nevada) holding 100% of the stock of American Leisure Products, Inc. (Florida) and Amour Fiber Core, Inc. (Florida)
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company's continued existence is dependent upon the Company's ability to obtain additional debt and/or equity financing. The Company has incurred losses since inception and, the Company has not generated any revenues from its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company anticipates beginning construction of a pilot plant within the next 12 months and expects to complete the project and to begin production of scrapped fiberglass reclamation as a raw material within the next 24 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 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.
Certain accounts and financial statement amounts in the prior periods have been reclassified to conform to the current period financial statement presentation.
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.
The fair value of financial instruments approximated their carrying values at December 31, 2010. 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, 2010 and 2009, there existed notes payable with conversion features (see Notes Payable footnote) which, due to the net loss, had an anti-dilutive effect and therefore were not recognized. 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, 2010 and 2009, 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 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.
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 does not expect repayment of these amounts to occur during the next 12 months.
Notes receivable are made up of the following:
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 2011. 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 2011 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.
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.
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 during 2010 or 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 $117,957 and $134,131 as of December 31, 2010 and 2009, 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, but the balances are classified as currentliabilities.
NOTE 9 - CONVERTIBLE NOTES PAYABLE
The Company has issued convertible notes payables to the following individuals:
During 2008, the Company negotiated with note holders and assigns to have interest after March 31, 2008 forgiven on four notes.
Interest accrued on the above notes per individual is as follows:
In a 2004 the Company agreed to allow the outstanding loans, including accrued interest at that time, to be convertible into shares of common stock at a rate of $.05 per share, the then fair market value of the shares. The total original amount of the loans still outstanding at December 31, 2010 is $284,500 plus previously accrued interest of $287,318 for the years ended December 31, 2010 and 2009, respectively. The total common shares, if converted, would be approximately 11,500,000 shares as of December 31, 2010 and 2009, respectively.
NOTE 10 - Notes Payable- RELATED PARTIES
Related party notes 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.
Interest accrued on the above loans is $211,556 and $198,635 at December 31, 2010 and 2009, 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:
The valuation allowance increased by $26,004 during the year ended December 31, 2010 and $23,353 during the year ended December 31, 2009.
ITEM 9
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISLCOSURE
None.
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, 2010, 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, 2010 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, 2010 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.
ITEM 9B. OTHER INFORMATION
None
PART III
ITEM 10.
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 60 President, Chief Executive Officer and Director Kenneth W. McCleave 58 Chairman of the Board of Directors Michael A. Freid 58 Chief Financial Officer
Daniel L. Hefner, 60, 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 58 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, 58, 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.
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.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid to or accrued, during the years ended December 31, 2010 and 2009 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
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.
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, 2010 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, 2010.
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 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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
None.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES
Audit Fees
The aggregate audit fees billed for the years ended December 31, 2010 and 2009 was $3,000 and $3,000, respectively. 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.
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* 3.1 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* Employment Agreement with Kenneth W. McCleave, dated 10/1/2001*
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: April 15, 2011 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
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 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: April 15, 2011 /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 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: April 15, 2011 /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 for the period ended December 31, 2010 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: April 15, 2011 /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 for the period ended December 31, 2010 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.
(3) Certain accounts and financial statement classifications in the prior periods have been reclassified to conform to the current period financial statement presentation.
Date: April 15, 2011 /s/ Michael A. Freid ------------------------------------- Michael A. Freid Chief Financial Officer and Principal Accounting Officer