SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 20, 2000
ALPHA FIBRE, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
000-25013 05-0499527
(Commission File Number) (I.R.S. Employer Identification Number)
801 Falmouth Street,
Thousand Oaks, California 91362
(Address of Principal Executive Offices) (Zip Code)
(805) 497-8900
(Registrant's Telephone Number, Including Area Code)
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FORWARD LOOKING STATEMENTS
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THIS FORM 8-K AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY
ALPHA FIBRE, INC. (HEREINAFTER REFERRED TO AS "ALPHA" AND/OR "COMPANY"
AND/OR "REGISTRANT") OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES
ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, ASAMENDED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP. 1996). THOSE STATEMENTS
INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF
ALPHA AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON
WHICH SUCH STATEMENTS ARE BASED.
PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS
ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE
STATEMENT FOR FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS
FORM 8-K, AND ARE HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO
REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR
CHANGES TO FUTURE OPERATING RESULTS OVER TIME.
<PAGE> 2
INFORMATION INCLUDED IN THIS REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
BACKGROUND INFORMATION
An Agreement and Plan of Merger and Reorganization (the "Alpha Agreement") was
executed on September 19, 2000 by and among OAK BROOK CAPITAL III, INC. ("OAK
BROOK") and ALPHA FIBER MERGER CORPORATION ("ALPHA"). OAK BROOK is a corporation
duly organized and validly existing under the laws of the State of Colorado,
with its registered office at 17 West Cheyenne Mountain Boulevard, Colorado
Springs, Colorado 80906 its principal executive office at 1250 Turks Head
Building, Providence, Rhode Island 02903, and its phone number is (401)
272-5800; ALPHA FIBER MERGER CORPORATION is a corporation duly organized and
validly existing under the laws of the State of Colorado, with its registered
office located in the city of Colorado Springs, State of Colorado, its
principal executive office at 801 Falmouth Street, Thousand Oaks, California
and its phone number is (805) 497-8900.
A Plan and Agreement of Merger and Reorganization (the "Jovus Agreement")
was executed on September 19, 2000 by and among OAK BROOK, FORTE HOLDINGS, LTD.,
("FORTE") and JOVUS, LTD. OAK BROOK is described in the preceding paragraph;
FORTE, a wholly-owned subsidiary of OAK BROOK, is a corporation duly organized
and validly existing under the laws of St. Vincent and the Grenadines, with its
registered office located at Trust House, 112 Bonadie Street, Kingstown,
St. Vincent and its phone number is (784) 457-1145; JOVUS is a corporation
duly organized and validly existing under the laws of St. Vincent and the
Grenadines, its registered office at Trust House, 112 Bonadie Street,
Kingstown, Saint Vincent and its phone number is (784) 457-1145.
The respective boards of directors of OAK BROOK and ALPHA deemed it desirable
and in the best interests of their respective corporations, for OAK BROOK to
acquire the outstanding capital stock of ALPHA in exchange for One Million
One Hundred Ninety-Eight Thousand Fifty-Five (1,198,055) shares of the common
stock of OAK BROOK and have proposed, declared advisable and approved such
exchange (collectively, the "ALPHA Merger") pursuant to the ALPHA Agreement,
which Agreement have been duly approved by
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resolutions of the respective boards of directors and a vote by the shareholders
of Oak Brook and Alpha.
The respective Boards of Directors OAK BROOK and JOVUS deemed it desirable and
in the best interests of their respective corporations, for OAK BROOK to
acquire the outstanding capital stock of JOVUS in exchange for Six Million Five
Hundred Ninety-Four Thousand Four Hundred Forty-Seven (6,594,447) shares
of the common stock of OAK BROOK and have proposed, declared advisable and
approved such exchange (collectively, the "JOVUS Merger") pursuant to the JOVUS
Agreement, which Agreement has been duly approved by resolutions of the
respective boards of directors and a vote by the shareholders of Oak Brook
and JOVUS.
AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors and shareholders have unanimously approved for the
restatement and amendment of the Company's Articles of Incorporation in order
to change the Company's name to "ALPHA FIBRE, INC.".
Approval of the restatement and amendment has not resulted in any other
material amendment or change to the Company's Articles of Incorporation. The
restatement and amendment is required to effect the Company's acquisition of
ALPHA and/or JOVUS.
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APPROVAL OF PLAN AND AGREEMENT OF MERGER OF OAK BROOK AND ALPHA
The Board of Directors has unanimously approved, and recommended for
shareholder approval, an Agreement and Plan of Merger and Reorganization
(the "Alpha Merger"), whereby OAK BROOK acquired all issued and
outstanding capital stock of ALPHA in exchange for One Million One Hundred
Ninety-Eight Thousand Fifty-Five (1,198,055) of the Common Stock of
OAK BROOK.
APPROVAL OF THE PLAN AND AGREEMENT OF MERGER OF OAK BROOK AND JOVUS
The Board of Directors has unanimously approved, and recommended for
shareholder approval, a Plan and Agreement of Merger and Reorganization
(the "Jovus Merger"), whereby OAK BROOK acquired all issued and
outstanding capital stock of JOVUS in exchange for Six Million Five
Hundred Ninety-Four Thousand Four Hundred Forty-Seven (6,594,447)
of the Common Stock of OAK BROOK.
Hereinafter, unless otherwise specified, the Alpha Merger and the Jovus
Merger shall be collectively referred to as the "Merger."
ELECTION OF DIRECTORS
At the Meeting, the successors to the current Board of Directors were
elected for a term of office, such term to commence on the effective date of
the Merger. The directors who were chosen to fill vacancies on the
Board shall hold office until the next election for which nominee
directors are chosen, and until their successors are duly elected by the
stockholders.
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EFFECT OF ALPHA MERGER
In all other respects, the identity, existence, purposes, powers, objects,
franchises, rights, and immunities of OAK BROOK shall continue unaffected and
unimpaired by the Merger.
The corporate identity, existence, purposes, powers, objects, franchises,
rights, and immunities of ALPHA have been wholly merged with and into the
Surviving Corporation, and the Surviving Corporation has been fully vested
therewith. Accordingly, on the Effective Date, the separate existence of
ALPHA, except in so far as continued by statute, ceased.
The laws of Colorado shall continue to govern OAK BROOK. On and after
the Effective Date, the Articles of Incorporation of OAK BROOK (the "Articles")
shall continue until further amended in the manner provided by law and in such
Articles of Incorporation. On the Effective Date, the bylaws of OAK BROOK
(the "Restated Bylaws") shall continue until altered, amended, or repealed, or
until new bylaws shall be adopted in accordance with the provisions of law, the
Articles, and the Restated Bylaws.
EFFECT OF JOVUS MERGER
In all other respects, the identity, existence, purposes, powers, objects,
franchises, rights, and immunities of OAK BROOK and JOVUS shall continue
unaffected and unimpaired by the JOVUS Merger. Upon consummation
of the JOVUS Merger, FORTE ceased to exist as a separate entity.
The laws of Colorado shall continue to govern OAK BROOK and the laws of
St. Vincent and the Grenadines shall continue to govern JOVUS. On and after
the Effective Date, the Articles of Incorporation of FORTE (the "Articles")
became the Articles of Incorporation of JOVUS, until further amended in
the manner provided by law and in such articles of incorporation. On the
Effective Date, the bylaws of FORTE (the "Restated Bylaws") became the
Bylaws of JOVUS until altered, amended, or repealed, or until new bylaws shall
be adopted in accordance with the provisions of law, the Articles, and the
Restated Bylaws.
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CONVERSION OF ALPHA'S STOCK AND OTHER SECURITIES
ALPHA shareholders will surrender one hundred percent (100%) of their
issued and outstanding common and preferred shares to OAK BROOK. In exchange
for receipt of one hundred percent (100%) of ALPHA shares, OAK BROOK, on the
terms and subject to the conditions herein set forth, shall issue and deliver
to ALPHA shareholders:
On the Closing Date, 1,198,055 Common Shares, no par value ("OAK BROOK
Common Stock"), of OAK BROOK, on a share-for-share basis, registered in the
name of each ALPHA shareholder or its nominee.
OAK BROOK Common Stock
None of the currently issued and outstanding shares of OAK BROOK
Common Stock, no par value, issued and outstanding at the effective
time of the ALPHA Merger shall be converted as a result of the ALPHA
Merger;
-- Fractional Interests
No fractional shares of preferred or common stock of OAK BROOK or
certificate or scrip representing the same shall be issued. In lieu
thereof each holder of ALPHA shares having a fractional interest arising
upon such conversion will be rounded up into one full additional share
of common stock of OAK BROOK;
-- Status of Common Stock
All shares of common stock of OAK BROOK into which ALPHA shares are
converted as herein provided shall be fully paid and non-assessable
and shall be issued in full satisfaction of all rights pertaining to
such OAK BROOK Common Stock;
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-- Independent Appraisal, Right to Dissent and Obtain Payment for Shares
Procedures for Protection of Dissenter's Rights. In order to establish
a "fair value" for the ALPHA shares which are paid in cash in lieu of
conversion into the shares of OAK BROOK, the Board of Directors of ALPHA
established the value of ALPHA shares prior to the ALPHA Merger, and
shall afford to such shareholders of ALPHA all of the rights, and
implement the procedures for protection of dissenters' rights, pursuant
to the provisions of the Colorado Business Corporation Act, as amended,
the terms and provisions of which are hereby incorporated by reference
and made a part hereof.
ALPHA SHAREHOLDER DISSENTER'S RIGHTS
The Board of Directors of ALPHA established the value of ALPHA's shares
prior to the ALPHA Merger, and shall afford to the shareholders of ALPHA all
of the rights, and implement the procedures for protection of dissenters'
rights, pursuant to the provisions of the Colorado Business Corporation Act.
The capital surplus and retained earnings accounts of ALPHA shall be determined,
in accordance with generally accepted accounting principles, by the board of
directors of ALPHA. Nothing herein shall prevent the board of directors of
ALPHA from making any future changes in its accounts in accordance with law.
INVESTMENT REPRESENTATION LETTER
At the Closing, each of the ALPHA shareholders executed and delivered to
ALPHA an investment representation letter statement in such form as
reasonably requested by counsel.
CONVERSION OF JOVUS' STOCK AND OTHER SECURITIES
JOVUS shareholders will surrender one hundred percent (100%) of their
issued and outstanding common and preferred shares to OAK BROOK. In
exchange for receipt of one hundred percent (100%) of JOVUS shares,
OAK BROOK, on the terms and subject to the conditions herein set forth,
shall issue and deliver to JOVUS shareholders:
On the Closing Date, 6,594,447 Common Shares, no par value ("OAK BROOK
Common Stock"), of OAK BROOK, on a 1 share -for- 5.514 share basis,
registered in the name of each JOVUS shareholder or its nominee.
OAK BROOK Common Stock
None of the currently issued and outstanding shares of OAK BROOK
Common Stock, no par value, issued and outstanding at the effective
time of the JOVUS Merger shall be converted as a result of the JOVUS
Merger;
-- Fractional Interests
No fractional shares of preferred or common stock of OAK BROOK or
certificate or scrip representing the same shall be issued. In lieu
thereof each holder of JOVUS shares having a fractional interest arising
upon such conversion will be rounded up into one full additional share
of common stock of OAK BROOK;
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-- Status of Common Stock
All shares of common stock of OAK BROOK into which JOVUS shares are
converted as herein provided shall be fully paid and non-assessable
and shall be issued in full satisfaction of all rights pertaining to
such OAK BROOK Common Stock;
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
BENEFICIAL OWNERSHIP OF ALPHA SECURITIES
The following table sets forth certain information regarding beneficial
ownership of ALPHA Common Stock as of August 5, 2000 by (i) each person
known by ALPHA to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director, and (iii) all executive officers and directors
as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted.
COMMON SHARES OWNED
Name and Address Number of Title of
Shares Owned Class Owned
Beneficially
---------------- ------------- -------------
Deborah Kern - N/A
801 Falmouth St.
Thousand Oaks, CA
Robert Nagy - N/A
139B Market St.
Charleston, SC 29401
Ellen V. Aidinoff 36,636 Common Shares
c/o Deborah Kern
801 Falmouth St.
Thousand Oaks, CA
William L. Sutton and 21,981 Common Shares
Mayra A. Sutton, JTWROS
c/o Deborah Kern
801 Falmouth St.
Thousand Oaks, CA
Michael Newburg 25,645 Common Shares
c/o Deborah Kern
801 Falmouth St.
Thousand Oaks, CA
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Crown Legacy, LP 125,783 Common Shares
c/o Deborah Kern
801 Falmouth St.
Thousand Oaks, CA
Thomas Todd 73,272 Common Shares
c/o Deborah Kern
801 Falmouth St.
Thousand Oaks, CA
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BENEFICIAL OWNERSHIP OF JOVUS SECURITIES
The following table sets forth certain information regarding beneficial
ownership of JOVUS common stock as of August 5, 2000 by (i) each person known
by JOVUS to beneficially own more than 5% of the outstanding common stock (ii)
each director, and (iii) all executive officers and directors as a group. Each
person has voting and sole investment or dispositive power with respect to the
shares shown except as noted.
COMMON SHARES OWNED
Name and Address Number of Title of Class
Shares Beneficially Owned
Owned
---------------- ------------------- --------------
Deborah Kern 4,500,000 Common Shares
801 Falmouth St.
Thousand Oaks, CA 91362
Robert Nagy 300,000 Common Shares
139B Market St.
Charleston, SC
Smith & Butler Construction, Inc. 2,000,000 Common Shares
1735 Mallow Ct.
Carlsbad, CA 92009
Matrix 8 13,220,056 Common Shares
112 Bonadie St.
St. Vincent
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DIVIDENDS
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cash dividends in the future.
There are no contractual restrictions on the Company's present or future
ability to pay dividends. Future dividend policy is subject to the discretion
of the Board of Directors and is dependent upon a number of factors,
including future earnings, capital requirements and the financial condition
of the Company. The Colorado Business Corporation Act provides that a
corporation may not pay dividends if the payment would reduce the remaining
net assets of the corporation below the corporation's stated capital plus
amounts constituting a liquidation preference to other security holders.
DIRECTORS AND EXECUTIVE OFFICERS
In 1998 and 1999, the Board of Directors met informally on a number of
occasions, voting on corporate actions by written consent.
DIRECTORS
The following table sets forth the ages of and positions and offices
presently held by each new director of the Company. For information
about ownership of the Company's Securities by each nominee director, see
"BENEFICIAL OWNERSHIP OF ALPHA SECURITIES."
Date First
Became Positions and Offices
Name Age Director With the Company**
------------------------- ---- ---------- ------------------------
Dr. Prabhat Krishnaswamy 42 10-20-2000 Chief Technology Officer
Deborah L. Kern 47 10-20-2000 Chief Executive Officer
Robert J. Nagy 10-20-2000 Chief Financial Officer
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** Nominees for election at this meeting.
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PERSONAL BIOGRAPHIES
Will be included in Form 8-K, Item 1, Change in Control of the Registrant,
to be filed on behalf of the issuer no later than December 31, 2000.
ITEMS 2 THROUGH 4, 6 THROUGH 9 NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
ALPHA FIBER MERGER CORPORATION-
DESCRIPTION OF THE BUSINESS
ALPHA FIBER MERGER CORPORATION
ALPHA FIBER MERGER CORPORATION (the "Company or "AFI"), is a newly formed
Colorado corporation. The Company holds exclusive worldwide commercialization,
distribution and sales rights to unique, patentable processes which convert
agricultural waste field straw into a highly valued fibrous plastic
reinforcement material ("FIBE"). FIBEX represents a technological breakthrough
that will revolutionize the plastics manufacturing industry by meeting market
needs based on performance, weight, cost effectiveness and recyclability.
AFI has established initial manufacturing protocols, produced trial run
sample material, confirmed full commercial production feasibility, conducted
preliminary independent testing, established trademark registration, licensed a
patent pending technology and established patentability on a proprietary
process, identified extensive markets and developed potential customers and
strategic partners. Additionally, strong relationships have been built with
growers, governments and financial institutions which management believes will
aid in the successful construction and operation of its manufacturing facilities
in Canada where there is a significant, readily available supply of the specific
raw material required. The Company anticipates beginning plant construction in
the Fall of 2000, and also anticipates that the plant to be in operation in
mid-2001.
The Company's strategic plan focuses on initially developing manufacturing
facilities to produce FIBEX as a primary reinforcement material to plastic
products manufacturers. In the future, the Company may establish separate
wholly owned or joint ventured manufacturing facilities for the production of
various highly profitable finished composite and artificial wood products.
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FIBEX
The product - FIBEX- is a new fiber reinforcement material with unique
characteristics valuable to the thermoplastics industry. As the name implies,
it has a fibrous character, which enables superior bonding to polymers. The
resulting composite has strength performance similar to fiberglass reinforced
plastic, but without the weight penalty of fiberglass. Fiberglass is the
premium reinforcement material utilized for adding strength to plastic composite
products. Based on test data, AFI anticipates being able to achieve weight
reductions of 10% to 20% as compared to fiberglass. FIBEX will be cost
effective and competitively priced relative to its value in the marketplace.
Additionally, the FIBEX composite can be ground up and recycled by being
incorporated into new products. Independent testing has confirmed these
characteristics. The unique properties of FIBEX have tremendous value to
plastic products manufacturers, solving long term problems for the industry,
such as weight, strength, stiffness, recyclability and product life-cycle.
Weight reduction as a result of using FIBEX is significant both for structural
applications such as plastic lumber as well as in automotive applications where
this contributes to vehicles with higher fuel efficiency.
Based upon the Company's research, management believes there is a
tremendous interest in natural fibers resulting from the demand of the plastics
industry for light, strong, cost effective reinforcement materials.
Additionally, the lack of recyclability of mineral and glass filled plastic
has been a major motivating factor for the development of alternative materials.
The Company believes it is well ahead of any other company researching natural
fibers, and to the Company's knowledge, stands alone in the industry with two
commercially viable, proprietary technologies ready for implementation.
Market Opportunity
AFI has identified existing markets representing over $200 million in
potential annual sales which it believes can be penetrated relatively quickly
in order to establish the utility of FIBEX. The Company feels there is a
significant near-term opportunity in the injection molding industry for this
exceptional fiber, particularly for bins, totes and containers. Reinforcement
materials have been used by the thermoplastics industry for years to improve the
overall characteristics and performance of the plastic. Current industry
practice is to combine virgin or recycled polymers with other materials such as
minerals or fiberglass to manufacture a wide variety of thermoplastic
products.
Management believes that most consumers are not aware of the fact that the
majority of "plastic" products contain a significant amount of non-polymer
filler or reinforcement material. The Company believes that the qualities of
FIBEX will position it as the premier alternative to current polymer compound
reinforcement materials. Plastic manufacturers, without retooling or major
modifications to their production line, can replace what they are currently
using with FIBEX. The injection molding industry is seeking materials like FIBEX
for performance, weight, cost and recyclability characteristics. There is also
<PAGE> 13
significant near term opportunity in the material handling market for an
alternative reinforcement material to manufacture composite pallets and
specialty containers. Overall, these products, when produced from plastic
resins and FIBEX, will provide the solutions to various problems this industry
has been facing, and seeking to solve, for quite some time. AFI is prepared
to capitalize on the opportunities presented by these traditional markets.
The automotive industry is especially keen on natural fibers as composite
reinforcement materials for the recyclability and overall weight reduction
characteristics of such fibers. FIBEX can be utilized for everything from
dashboards, interior components, and electrical housings to trunk liners.
Currently, some automotive companies are endeavoring to replace fiberglass as
a primary reinforcement for polypropylene in automotive interior applications.
The Company is also investigating the potentially significant emerging
markets for plastic lumber and reinforced concrete. Management believes that
the Company's markets are large and growing rapidly. The Company feels that
acceptance by only one or two of the Company's early target customers should
result in other end-product manufacturers quickly pulling FIBEX into their
manufacturing process as they see the benefits achieved by major players in
related industries. This, together with exceptional opportunities for new
products made possible by FIBEX, give AFI the potential for rapid, sustained
growth.
Management / Advisors
AFI feels it has attracted professionals with high caliber talent,
expertise, and experience who are committed to achieving its success. In
addition to key industry experts, the Company has secured the services of an
international engineering, construction and construction management firm, a
business finance and venture capital partner experienced with assisting early
stage companies with public market access, and United States and Canadian
counsel experienced in international law, intellectual property protection, and
private and public securities offerings.
Strategic Alliances / Development Partners
The Company has established relationships with market leaders for strategic
alliances and product development. These companies hold significant market share
in their product categories and were chosen by AFI because they ideally fit our
strategy due to their commitment to product improvement through innovation, as
well as their size, market penetration and product diversity. The acceptance of
FIBEX by these market leaders will serve to immediately confirm the superior
qualities of FIBEX and provide AFI with key market access. Our negotiations
contemplate their independent development and testing of prototype products
<PAGE> 14
incorporating FIBEX. Several of the companies have expressed an interest in a
financial investment in the Company. We anticipate that the development
partners will negotiate purchase contracts for FIBEX prior to plant
completion.
Current Test Results
Trials have been conducted using FIBEX to reinforce both high-density
polyethylene (HDPE) and polypropylene (PP), the two most extensively used
thermoplastic resins. The trial specimens were successfully produced containing
25% and 40% FIBEX by weight with the use of coupling agents. Results from the
evaluation of mechanical properties of the first samples show a 250 % increase
in the stiffness (modulus) for HDPE and a 175% increase for PP, as compared to
unfilled resin. These increases in stiffness make FIBEX a very attractive
reinforcement for plastic resins in all market segments.
A comparison of the mechanical properties of FIBEX reinforced HDPE to those
of commercially available plastic lumber, one major potential market, is even
more impressive. The stiffness and strength values for FIBEX are better than
those for all other types of fillers and reinforcers such as talc, mica, and
woodflour. In comparison to fiberglass, the bending stiffness and bending
strength of FIBEX reinforced thermoplastic is equal to the fiberglass reinforced
thermoplastic. This is significant because it means that FIBEX can replace
fiberglass in structural plastic applications. When compared to other unfilled
and natural material filled products on the market, preliminary tests indicate
increases in strength and stiffness from 37% to 255%, and 168% to 287%,
respectively.
AFI is currently optimizing the processing and compounding stages of FIBEX
based reinforced thermoplastic and expects the results to show further increases
in the mechanical and physical properties.
Technology
AFI, through an affiliated company, has recently licensed a patent pending
technology that offers us a significant economic advantage. The technology
allows AFI to eliminate steps in the production process, saving capital and
operating costs. The technology further enhances our leading position in the
race to deliver flax fiber with enhanced mechanical properties to the plastics
industry and, more specifically, to the automotive industry. The license gives
us worldwide exclusive rights to the technology for the applications we are
pursuing.
Additional product protection strategies may include process and product
<PAGE> 15
patents. AFI's patent attorneys have opined that our original proprietary
technology and Fibex as a unique product are patentable. This may dictate
securing more broadly based patents encompassing both the FIBEX production
process, the unique attributes it brings to the compounding process
in general and perhaps to specific compounded products. FIBEX has been
trademarked in the U.S. and filings will follow in Canada.
Initial Plant Site
Due to the abundance of its raw material supply for the manufacture of
FIBEX, AFI intends to locate its first operating plants in the province of
Saskatchewan, Canada. Local and provincial government support has been
established, and is evidenced by commitments to provide to AFI land,
infrastructure and attractive tax incentives, along with training programs
and substantial wage reimbursements. Additionally, AFI has the pledged support
of government agencies and community leaders to organize a cooperative to ensure
a long-term supply of quality raw material. Canada Farm Credit, CIBC (the
largest commercial bank in Canada), and several other financing entities have
expressed strong interest in arranging any required debt financing.
JOVUS, LTD.- is a St. Vincent corporation. Its primary purpose is to own and/or
hold intellectual property and the rights pertaining thereto. It has no
other operations.
COMPETITION
The plastics industry in which the Company operates is highly
competitive. Some of the company's principal competitors in certain business
lines are substantially larger and better capitalized than the Company.
Because of these resources, these companies may be better able than the
Company to obtain new customers and to pursue new business opportunities or to
survive periods of industry consolidation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
---------------------------------
As of the date of the filing of this Current Report on Form 8 K, the
Registrant's Independent Auditor, Bersch Accounting, sc, is completing
the consolidated audit of the historical financial statements of
ALPHA FIBRE that will provide for financial statement requirements
prescribed by this Item 7(a).
In accordance with Item 7(a)(4) of Form 8 K, such financial statements will be
provided as soon as practicably possible, but in any event no later than
December 31, 2000.
(b) Pro Forma Financial Information.
The pro forma financial statement required by this Item 7(b) will be filed no
later than December 31, 2000.
<PAGE> 16
ALPHA'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and related notes thereto to be filed subsequently.
PLAN OF OPERATION
ALPHA
ALPHA does not currently have any external sources of working capital. ALPHA's
Management has not entered into any commitments for significant capital
expenditures. Furthermore, there are no plans to hire additional employees
unless Management is successful in securing a substantial capital infusion.
On September 19, 2000 ALPHA entered into an Agreement with OAK BROOK. This
transaction was structured as a reverse acquisition whereby the existing
shareholders of ALPHA obtained control of OAK BROOK. At completion of this
business combination transaction, there can be no assurance that the combined
companies will have sufficient funds to undertake any significant
development, marketing and manufacturing activities. Accordingly, the
combined companies will be required to either seek additional debt or equity
financing or obtain funding from third parties, in exchange for which the
combined companies might be required to issue a substantial equity
position. There is no assurance that the combined companies will be able to
obtain additional financing on terms acceptable to the combined companies. If
Management is successful in obtaining additional funding, these funds will be
used primarily to provide working capital needed for repayment of outstanding
notes payable, product development, sales and marketing expense and to
finance research, development and advancement of intellectual property
concerns. A description of the ALPHA business is provided above.
JOVUS
JOVUS does not currently have any external sources of working capital. JOVUS's
Management has not entered into any commitments for significant capital
expenditures. On September 19, 2000, JOVUS entered into an Agreement to
effectively become a wholly-owned subsidiary of OAK BROOK. This transaction
was structured as a forward triangular merger whereby the existing
shareholders of JOVUS obtained shares of the common stock of OAK BROOK.
At completion of this transaction, there can be no assurance that the
combined companies will have sufficient funds to undertake any significant
development, marketing and manufacturing activities. Accordingly, the
combined companies are required to either seek additional debt or equity
financing or obtain funding from third parties, in exchange for which the
combined companies might be required to issue a substantial equity position.
There is no assurance that the combined companies will be able to obtain
additional financing on terms acceptable to the combined companies. If
Management is successful in obtaining additional funding, these funds will
be used primarily to provide working capital needed for repayment of
outstanding notes payable,software development, sales and marketing expense
and to finance research,development and advancement of intellectual property
concerns. A description of the JOVUS business is provided above.
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. The Company's balance sheet as of June 30, 2000,
reflects a current asset value of $0.00, and a total asset value of $0.00
in the form of cash and capitalized organizational costs.
<PAGE> 17
The Company will carry out its plan of business as discussed above.
RESULTS OF OPERATIONS
During the period from November 24, 1999 (inception) through June 30,
2000, the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
reporting as a registrant under Section 12 of the Securities Exchange Act
of 1934, as amended. No revenues were received by the Company during this
period.
Need for Additional Financing
The Company believes that its existing capital will be sufficient to
meet the Company's cash needs, including the costs of compliance with
the continuing reporting requirements of the Securities Exchange Act
of 1934, as amended, for a period of approximately one year.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109") issued by the Financial Accounting Standards Board ("FASB"),
under which deferred tax assets and liabilities are provided on differences
between the carrying amounts for financial reporting and the tax basis of
assets and liabilities for income tax purposes using the enacted tax rates.
Under SFAS 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods. A
valuation allowance is recognized, if on the weight of available evidence,
it is more likely than not that some portion or the entire deferred tax
asset will not be realized.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121") issued by the FASB, is effective for financial statements for
fiscal years beginning after December 15, 1995.The standard establishes new
guidelines regarding when impairment losses on long-lived assets, which
include plant and equipment, certain identifiable intangible assets, and
goodwill, should be recognized and how impairment losses should be measured.
The Company does not expect adoption to have a material effect on its
financial position or results of operations. Statement of Financial
<PAGE> 18
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123") issued by the FASB, is effective for specific transactions
entered into after December 15, 1995. The disclosure requirements of SFAS
123 are effective for financial statements for fiscal years beginning no
later than December 15, 1995. The new standard established a fair value
method of accounting for stock-based compensation plans and for
transactions in which an entity acquires goods or services from
non-employees in exchange for equity instruments. The Company does not expect
adoption to have a material effect on its financial position or results of
operations.
FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY
The discussion contained herein has been prepared by the Company and is based
on existing law as contained in the Code, amended United States Treasury
Regulations ("Treasury Regulations"), administrative rulings and court
decisions as of the date of this Registration Statement. No assurance can be
given that future legislative enactments, administrative rulings or court
decisions will not modify the legal basis for statements contained in this
discussion. Any such development may be applied retroactively to transactions
completed prior to the date thereof, and could contain provisions having an
adverse affect upon the Company and the holders of the Common Stock. In
addition, several of the issues dealt with in this summary are the subjects of
proposed and temporary Treasury Regulations. No assurance can be given that
these regulations will be finally adopted in their present form.
Y2K COMPLIANCE
ALPHA
ALPHA has conducted an assessment of issues related to the Year 2000 and
determined that all its computer driven systems and software in use are
able to recognize, calculate, and display data-related dates correctly
after the year 1999. ALPHA can not determine the impact the Year 2000 will
have on its key suppliers. However, if ALPHA's key suppliers do not convert
their systems to become Year 2000 compliant, ALPHA may be adversely impacted.
JOVUS
JOVUS has conducted an assessment of issues related to the Year 2000 and
determined that all its computer driven systems and software in use are
able to recognize, calculate, and display data-related dates correctly
after the year 1999. JOVUS can not determine the impact the Year 2000 will
have on its key suppliers. However, if JOVUS's key suppliers do not convert
their systems to become Year 2000 compliant, JOVUS may be adversely impacted.
FORWARD LOOKING STATEMENT
This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial
performance. Those statements include statements regarding the intent,
belief or current expectations of ALPHA, and members of its management team
<PAGE> 19
as well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties, and
that actual results may differ materially from those contemplated by such
forward-looking statements. The Company undertakes no obligation to update
or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. The Company believes that its assumptions are based upon reasonable
data derived from and known about its business and operations and the business
and operations of ALPHA. No assurances are made that actual results of
operations or the results of the Company's future activities will not differ
materially from its assumptions.
EXHIBIT INDEX
Exhibit No. Exhibit
x 2.10(a) Agreement and Plan of Merger and
Reorganization with Alpha Fiber
Merger Corporation
x 2.10(b) Plan and Agreement of Merger and
Reorganization with Jovus, Ltd.
x 2.11(a) Oak Brook/Alpha Fiber Articles of
Merger
x 2.11(b) Oak Brook/Jovus Articles of Merger
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain
Rights of Shareholders
# 4(b) Specimen Stock Certificate
x 5.10 Legal Opinions (Nadeau & Simmons, P.C.)
Investment Representation Letter
7 Not applicable
9 Not applicable
<PAGE> 20
11 Not applicable
14 Not applicable
16 Not applicable
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
## 24.1 Consent of CPA.
27 Financial Data Schedule
28 Not applicable
## 99.1 Safe Harbor Compliance Statement
____________________________
x filed herewith
# previously filed
## incorporated herein by reference from Registrant's Definitive Information
Statement, filed on Schedule 14C on June 12, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form 8-K and has duly caused this Current
Report to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Thousand Oaks, California on the 1st day of
November, 2000.
ALPHA FIBRE, INC.
By: /s/ Deborah L. Kern
________________________________
DEBORAH L. KERN,
President
Date: November 1, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Current Report on Form 8-K has been signed below by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/s/Deborah L. Kern President November 1, 2000
& Director
<PAGE> 22
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Deborah L. Kern, his true and lawful attorneys-
in-fact and agents with full power of substitution and re-substitution, for then
and in their name, place and stead, in any and all capacities, to sign any and
all amendments this current report and to file the same with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as they
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
This power of attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
current report has been signed by the following persons in the capacities
and on the dates indicated.
<PAGE> 21
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
---------------- --------------- --------------
<S> <C> <C>
/s/ Robert Nagy
ROBERT NAGY Vice President November 1, 2000
/s/ Dr. Prabhat Krishnaswamy
DR. PRABHAT KRISHNASWAMY Chief Technology Officer November 1, 2000
</TABLE>
