<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
Commission File No. ___
Amour Fiber Core, Inc.
----------------------
(Exact name of registrant as specified in its charter)
Washington 91-1705387
- ------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1120 East Stevens, P.O. Box 42, Sultan, WA 98294 (360) 793-0146
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(Address, including zip code, and telephone number, including area code, of
registrant; principal executive offices and principal place of business)
Indicate by check mark whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class September 30, 1996
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Common Stock, No Par Value 3,298,203
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
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AMOUR FIBER CORE, INC.
INDEX
<TABLE>
<CAPTION>
Part I - Financial Information Page Number
<S> <C>
Item 1. Financial Statements 2
Consolidated Condensed Balance Sheets at December 31, 1995
and September 30, 1996 (unaudited)
Consolidated Condensed Statement of Operations for the
quarters ended September 30, 1996 and for the nine months
ended September 30, 1996 (unaudited)
Consolidated Condensed Statement of Cash Flows for the
quarters ended September 30, 1996 and for the nine months
ended September 30, 1996 (unaudited)
Notes to Consolidated Condensed Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 5
Part II - Other Information 7
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibit and Reports on Form 8-K
Signature 8
</TABLE>
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMOUR FIBER CORE INC.
(A Development Stage Company)
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, 1996 Dec. 31, 1995
(Unaudited)
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<S> <C> <C>
ASSETS
Current assets:
Cash $ 27,309 $ 4,175
Receivables, net - Trade 565 5,677
- Employees 8,325 7,565
- Shareholders 25,105 20,105
Inventory, fin goods 27,621 27,621
----------- -------------
Total current assets 88,925 65,143
----------- -------------
Machinery and Equipment, at cost 448,321 296,992
Less: accumulated depreciation (67,240) (50,269)
----------- -------------
Net machinery and equipment 381,081 246,723
----------- -------------
Other assets 3,000 3,000
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Total assets $ 473,006 $ 314,866
=========== =============
LIABILITIES
Current liabilities:
Accounts payable 91,299 37,149
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Total current liabilities $ 91,299 $ 37,149
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Other liabilities:
Shareholder loans 161,175 144,887
Deferred wages 139,346 116,000
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Total other liabilities 300,521 260,887
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Total liabilities $ 391,820 $ 298,036
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Stockholders' equity:
Common stock 1,209,008 818,400
Retained deficit (1,127,822) (801,570)
----------- -------------
Total stockholder's equity $ 81,186 $ 16,830
----------- -------------
Total liabilities and
Stockholders' equity $ 473,006 $ 314,866
=========== =============
</TABLE>
See accompanying notes
2
<PAGE>
AMOUR FIBER CORE INC.
(A Development Stage Company)
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (10Q)
<TABLE>
<CAPTION>
Sept. 30, 1996 Sept. 30, 1995
(Unaudited) (Unaudited)
----------- ----------
3rd Qtr Nine Mo.'s 3rd Qtr Nine Mo.'s
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues
Sales $ 3,062 $ 6,356 $ 7,129 $ 9,494
Disposal Fees - 1,466 - -
----------- ---------- ---------- -----------
Net revenues $ 3,062 $ 7,822 $ 7,129 $ 9,494
----------- ---------- ---------- -----------
Costs and expenses:
Cost of sales 5,616 25,376 7,519 10,969
Research & development 52,172 110,184 780 5,647
Marketing general and
administrative 60,229 198,514 39,943 126,220
----------- ---------- ---------- -----------
Operating costs and expenses 118,014 334,074 48,242 142,836
----------- ---------- ---------- -----------
Net income (loss) $ (114,952) $ (320,252) $ (41,113) $ (133,342)
=========== ========== ========== ===========
Earnings per common and
common equipment share(*) (0.03) (0.10) (0.01) (0.04)
</TABLE>
(*)Weighted average number of common and common equipment shares outstanding for
September 30, 1996 was 3,298,203 shares and for September 30, 1995 was
3,257,960.
See accompanying notes
3
<PAGE>
AMOUR FIBER CORE INC.
(A Development Stage Company)
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (10Q)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
Sept. 30, 1996 Sept. 30, 1995
(Unaudited) (Unaudited)
------------------ ------------------
<S> <C> <C>
Cash Flows Provided by (used for)
Operating Activities:
Net Loss $(326,252) $(133,342)
Adjustments to reconcile net loss to net
cash used for operating activities:
Deferred Compensation 23,346 83,000
Depreciation 16,971 16,971
Change in accounts receivable 5,112 (4,314)
Change in accounts payable 54,150 (443)
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Net cash used for operating activities (226,673) (38,128)
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Cash Flows provided by (used for)
Investing Activities:
Capital expenditures (147,779) -
---------
Net cash used for Investing Activities: (147,779) -
---------
Cash Flows provided by (used for)
Financing Activities:
Capital stock issued 46,500 -
Change in employee receivable (760) (7,300)
Change in shareholder loans pay./rec. 351,846 47,200
--------- ---------
Net cash provided by financing activities 397,586 39,900
--------- ---------
Net change in cash 23,134 1,772
Cash at beginning of period 4,175 3,064
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Cash at end of period $ 27,309 $ 4,836
========= =========
</TABLE>
Supplemental schedule of non cash activities
Financing: Shareholder debt exchanged for capital stock 1/96 to 9/96:
$340,558
Investing: Equipment exchanged for capital stock 9/96: $3,550
See accompanying notes
4
<PAGE>
AMOUR FIBER CORE INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying interim consolidated condensed financial statements of
Amour Fiber Core Inc. ("Amour," the "Company," or the "Registrant") have been
prepared in conformity with generally accepted accounting principles, consistent
in all material respects with those applied in the Company's Registration
Statement on Form SB-1, as declared effective on November 8, 1996. The interim
financial information is unaudited, but reflects all normal adjustments which
are, in the opinion of management, necessary to provide a fair statement of
results for the interim periods presented. The interim financial statements
should be read in connection with the financial statements in the Company's
Registration Statement on Form SB-1, as declared effective on November 8, 1996.
2. Earnings per common and common equipment share were based upon a weighted
average number of common and common equipment shares outstanding which for
September 30, 1996 was 3,298,203 shares and for September 30, 1995 was
3,257,960.
Part I - Item 2
- ---------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company continued its plan of expanding its customer base during the first
three quarters of 1996 by increasing its marketing and sales network. The
Company's recent public offering is designed to generate adequate funds to allow
for growth of the Company's sales and manufacturing capacity that would not be
achieved if the Company relied only on internally generated funds. The
Company's business plans continue to stress growth of the customer base over
short-term profits; the Company's management believes net earnings will be
driven by continued growth of the customer base.
As of September 30, 1996, the Company had an accumulated deficit of $1,127,822.
It can be expected that the future operating results will continue to be
subject to many of the problems, expenses, delays and risks inherent in the
establishment of a new business enterprise, many of which the Company cannot
control. There can be no assurance, therefore, that the Company will be able to
achieve or sustain profitability. Even if the Company's operations prove to be
marginally profitable, the value of the Company's common stock, and the
potential return to investors, could be substantially diminished. Consequently,
an investment in the Company is highly speculative and no assurance can be given
that purchasers of the shares of common stock will realize any return on their
investment or that purchasers will not lose their entire investment.
The Company has formulated its business plans and strategies based on certain
assumptions of the Company's management regarding the size of the market for the
products which the Company will be able to offer, the Company's anticipated
share of the market, and the estimated prices for and acceptance of the
Company's products. The Company continues to believe its business plans and the
assumptions upon which they are based are valid. Although these plans and
assumptions are based on the best estimates of management, there can be no
assurance that these assessments will prove to be correct. No independent
marketing studies have been conducted on behalf of or otherwise obtained by the
Company, nor are any such studies planned. Any future success that the Company
might enjoy will depend upon many factors, including factors which may be beyond
the control of the Company or which cannot be predicted at this time. These
factors may include product obsolescence, increased levels of competition,
including the entry of additional competitors and increased success by existing
competitors, changes in general economic conditions, increases in operating
costs including cost of supplies, personnel and equipment, reduced margins
caused by competitive pressures and other factors, and changes in governmental
regulation imposed under federal, state or local laws.
The Company's operating results may vary significantly due to a variety of
factors including changing customers profiles, the availability and cost of raw
materials, the introduction of new products by the Company or its competitors,
the timing of the Company's advertising and promotional campaigns, pricing
pressures, general economic and industry conditions that affect customer demand,
and other factors.
Statements contained herein that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including but not limited to
statements regarding the Company's exceptions, hopes, beliefs, intentions or
strategies regarding the future. Actual results could differ materially from
those projected in any forward-looking statements as a result of a number of
factors, including those detailed in this Management's Discussion and Analysis
of Results of Operations and Financial Condition, as well as those set forth
elsewhere herein. The forward-looking statements are made as of the date of
these financial statements and the Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual results could
differ materially from those projected in the forward-looking statements.
Results of Operations
Net Sales. The Company realized net sales during the nine months ended
September 30, 1996 of $7,822, a decrease over net sales of $9,494 generated
during the nine months ended September 30, 1995. This decrease was due to the
commitment of the Company to the development of new products and the design of
new production equipment.
Liquidity and Capital Resources
On December 31, 1995, the Company had cash on hand of $4,175. However, from
inception through December 31, 1995, the Company has operated at a loss, as its
efforts had been focused on the design and development of a manufacturing
process and products. Management anticipated that additional capital would be
required to finance the Company's operations.
During March of 1996 the Company filed for the right to sell shares of common
stock to the public. On November 8, 1996, the Company received authority to
sell up to 300,000 shares of its common stock to the public at a price of $6.00
per share. The offering is self underwritten and the Company is proceeding with
the sale of the subject shares. The proceeds are being used to finance
expansion of the manufacturing plant activities.
At September 30, 1996, the Company had cash on hand of $27,309.00. The Company
believes that expected cash flow plus the anticipated proceeds from the offering
will finance the Company's operations at currently anticipated levels for a
period of at least 12 months. However, there can be no assurance that the
Company will not encounter unforeseen difficulties that may deplete its capital
resources more rapidly than anticipated.
PART II - OTHER INFORMATION
- ---------------------------
Item 1 - Legal Proceedings
- ------
None
Item 2 - Changes in Securities
- ------
None
Item 3 - Defaults upon Senior Securities
- ------
None
Item 4 - Submission of Matters to a Vote of Security Holders
- ------
None
Item 5 - Other Information
- ------
None
Item 6 - Exhibits and Reports on Form 8-K
- ------
None
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has dully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMOUR FIBER CORE INC.
(Registrant)
Date Dec 7, 1996 By: /s/ C.A. TONY PETERSON
----------------------
C.A. Tony Peterson
Director and
Chief Financial and
Principal Accounting Officer
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 27,309
<SECURITIES> 0
<RECEIVABLES> 565
<ALLOWANCES> 0
<INVENTORY> 27,621
<CURRENT-ASSETS> 88,925
<PP&E> 448,321
<DEPRECIATION> 67,240
<TOTAL-ASSETS> 473,006
<CURRENT-LIABILITIES> 91,299
<BONDS> 0
0
0
<COMMON> 1,209,008
<OTHER-SE> (1,127,822)
<TOTAL-LIABILITY-AND-EQUITY> 473,006
<SALES> 6,356
<TOTAL-REVENUES> 7,822
<CGS> 25,376
<TOTAL-COSTS> 334,074
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (326,252)
<INCOME-TAX> 0
<INCOME-CONTINUING> (326,252)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (326,252)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
