<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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FIBR-PLAST CORPORATION
(Name of small business Issuer in its charter)
Oklahoma 3999 73-1543658
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
3225 S. Norwood
Suite 100
Tulsa, OK 74135
918-622-0696
------------------------------------------------------------
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
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Thomas G. Watson
3225 S. Norwood
Suite 100
Tulsa, OK 74135
918-622-0696
(Name, Address and Telephone Number of Agent for Service)
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Copies to:
Jonathan B. Reisman, Esq.
Reisman & Associates, P.A.
5100 Town Center Circle
Suite 330
Boca Raton, Florida 33486
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
<PAGE> 2
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FIBR-PLAST,
INC. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF FIBR-PLAST, INC. SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH
IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
IN MAKING A DECISION WHETHER TO BUY OUR COMMON STOCK, YOU SHOULD ONLY RELY ON
THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH ANY DIFFERENT OR OTHER INFORMATION. THE INFORMATION IN THIS
PROSPECTUS MAY ONLY BE ACCURATE ON THE DATE OF THIS PROSPECTUS.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY.................................................................................................2
RISK FACTORS.......................................................................................................3
FORWARD-LOOKING STATEMENTS.........................................................................................5
USE OF PROCEEDS....................................................................................................6
DIVIDEND POLICY....................................................................................................7
DILUTION ..........................................................................................................7
MANAGEMENT'S PLAN OF OPERATION.....................................................................................8
PROPOSED BUSINESS..................................................................................................9
MANAGEMENT........................................................................................................20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....................................................21
CERTAIN TRANSACTIONS..............................................................................................22
DESCRIPTION OF COMMON STOCK.......................................................................................23
SHARES ELIGIBLE FOR FUTURE SALE...................................................................................24
PLAN OF DISTRIBUTION..............................................................................................25
PROPOSED RESCISSION OFFER.........................................................................................26
LEGAL PROCEEDINGS.................................................................................................26
INDEMNIFICATION...................................................................................................27
LEGAL MATTERS.....................................................................................................27
EXPERTS...........................................................................................................27
ADDITIONAL INFORMATION............................................................................................27
</TABLE>
UNTIL , 2001 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS THAT
EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
5,000,000 SHARES
FIBR-PLAST CORPORATION
COMMON STOCK
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PROSPECTUS
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, 2001
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If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 4
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 16, 2001
PROSPECTUS
FIBR-PLAST CORPORATION
5,000,000 shares of Common Stock
$2.00 per share
<TABLE>
<CAPTION>
TOTAL
PER
SHARE MINIMUM MAXIMUM
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<S> <C> <C> <C> <C>
Initial Offering
Price to Public $2.00 $2,000,000 $10,000,000 NO PUBLIC MARKET
EXISTS FOR OUR SHARES.
Commissions $ .20 $ 200,000 $ 1,000,000
Proceeds to
Fibr-Plast $1.80 $1,800,000 $ 9,000,000
</TABLE>
We are offering the shares on a best efforts minimum/maximum basis. We are
making the offering through our officers and directors who will not be
compensated for offering the shares. Shares may also be offered by participating
broker-dealers which are members of the National Association of Securities
Dealers, Inc. We may, in our discretion, pay commissions of up to 10% of the
offering price to participating broker-dealers and others who are instrumental
in the sale of shares. The minimum purchase is 1,000 shares. Unless we receive
paid subscriptions for at least 1,000,000 shares by , 2001, no shares will be
sold and all proceeds will be returned to subscribers, without interest.
AN INVESTMENT IN THE SHARES INVOLVES SUBSTANTIAL RISKS AND IS SPECULATIVE. SEE
"RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2001
<PAGE> 5
PROSPECTUS SUMMARY
Because this is only a summary, it does not contain all of the
information that may be important to you. For a more complete understanding of
this offering, we encourage you to read this entire prospectus and the documents
we refer you to. Before deciding whether to invest in our common stock, you
should read the following summary together with the more detailed information
and financial statements and the notes to those statements appearing elsewhere
in this prospectus. In this prospectus, references to "we," "us" and "our" refer
to Fibr-Plast Corporation.
OUR PROPOSED BUSINESS
We intend to manufacture an alternative wood product from recycled,
solid waste, post industrial and consumer materials. We call the product
Fibr-Plast. If we are successful, we believe that we will produce a cost
effective wood substitute while, at the same time, becoming part of an
economical solution to a significant environmental problem. We have not yet
manufactured any products.
CORPORATE INFORMATION
We are an Oklahoma corporation formed on April 2, 1998. Our executive
offices are located at 3225 S. Norwood, Suite 100, Tulsa, OK 74135 and our
telephone number is 918-622-0696.
THE OFFERING
<TABLE>
<S> <C>
Common stock offered by us 5,000,000 shares
Common stock to be
outstanding after the
offering 17,477,450 shares if 5,000,000 shares are
sold. If only 1,000,000 shares are sold,
there will be 13,477,450 shares outstanding
upon completion of the offering.
Use of proceeds We intend to use the net proceeds primarily
for the acquisition of machinery and
equipment to manufacture Fibr-Plast, working
capital and other general corporate
purposes, including payment of compensation
of executive officers. The intended use of
proceeds is significantly dependent upon the
number of shares sold.
</TABLE>
2
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RISK FACTORS
An investment in our common stock involves substantial risks. You
should consider carefully the following information about these risks, together
with the financial and other information contained in this prospectus, before
you decide whether to buy our common stock. The risks described elsewhere in the
prospectus should not be considered any less significant than the risks
described under this caption. Additional risks and uncertainties may also impair
or preclude our proposed business operations. If any of these risks actually
occur, our business, financial condition and results of operations would likely
suffer. In such case, you might lose all or part of your investment.
WE HAVE HAD LOSSES SINCE INCEPTION AND EXPECT LOSSES TO CONTINUE FOR THE
FORESEEABLE FUTURE.
o Since our inception through September 30, 2000, we incurred a
net loss of approximately $961,000.
o We have never had any revenues and do not expect to have
revenues until we manufacture and sell Fibr-Plast either
directly or through a joint venture.
o We will need to generate significant revenues to achieve and
maintain profitability.
o Even if we do achieve profitability, we cannot assure you that
we can sustain or increase profitability in the future.
OUR PLANS ARE BASED UPON THE PROCEEDS FROM 5,000,000 SHARES AND IF LESS ARE SOLD
WE WILL HAVE TO OBTAIN ADDITIONAL FINANCING OR SCALE BACK OUR PLANS.
o Our ability to begin to manufacture Fibr-Plast in our own
plants is dependent upon, among other things, the proceeds of
the offering.
o Although we plan on opening two plants, if only 1,000,000
shares are sold we will only be able to open one small plant
designed to produce a relatively small amount of Fibr-Plast.
If we are unable to manufacture and sell Fibr-Plast in
relatively large quantities, we will not be able to realize
significant profits, if any.
IF WE ARE ABLE TO BEGIN TO MANUFACTURE FIBR-PLAST, WE WILL NEED SUBSTANTIAL
ADDITIONAL FINANCING TO FUND OUR EXPANSION PLANS WHICH MAY NOT BE AVAILABLE TO
US WHEN NEEDED.
o If additional funds are raised through the issuance of equity
securities, the percentage ownership of the stockholders of
the Company will be reduced; stockholders may experience
additional dilution; and those securities may have rights,
preferences or privileges senior to those of the rights of the
holders of our common stock.
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o There can be no assurance that additional financing will be
available on reasonable terms, if at all.
BECAUSE FIBR-PLAST IS NOT PATENTABLE AND NEITHER FIBR-PLAST NOR ITS GENERAL
MANUFACTURING PROCESS IS PROPRIETARY, WE CANNOT ASSURE YOU THAT OTHERS HAVE OR
WILL NOT MANUFACTURE AND SELL SUBSTANTIALLY THE SAME PRODUCT.
THE LOSS OF EITHER OF OUR OFFICERS MAY RESULT IN OUR INABILITY TO BEGIN
OPERATIONS OR BECOME PROFITABLE.
o Because our potential success is materially dependent upon the
personal efforts, abilities and business relationships of our
officers, if any of them was to terminate his employment with
us or becomes unable to be employed before a qualified
successor, if any, could be found, we would be materially
adversely affected.
o We do not maintain "key person" insurance on any of our
employees.
WE HAVE ARBITRARILY DETERMINED THE PUBLIC OFFERING PRICE AND THERE IS NOT AND
MAY NEVER BE A MARKET FOR THE SHARES.
o Although we intend to seek market makers for the shares and to
provide information concerning us to one or more recognized
securities manuals, we cannot predict the extent to which
investor interest in our company will lead to the development
of a trading market in our common stock or how liquid that
market might become. Furthermore, the determination to begin
and continue a public market is made by securities
broker-dealers and is not within our control.
o If a public market develops for our common stock, sales of
significant amounts of our common stock in the public market
or the perception that such sales will occur, could materially
adversely affect the market price of the common stock or our
ability to raise capital through future offerings of equity
securities
o Approximately 3,000,000 shares of our common stock are
presently eligible for public sale. An additional substantial
number of shares will become eligible for public sale 90 days
after the date of this prospectus.
o The public offering price for the shares was determined solely
by us without regard to any recognized criteria of value and
may not be indicative of prices that will prevail in the
trading market, if one develops. The market price of our
common stock, if any, may decline below the public offering
price.
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THE ABILITY TO SELL THE SHARES IN A PUBLIC MARKET MAY BE SIGNIFICANTLY IMPAIRED
BY THE PENNY STOCK RULES.
o The additional burdens imposed upon broker-dealers by those
rules may discourage broker-dealers from effecting
transactions in our common stock, which could severely limit
its liquidity.
WE MAY HAVE INCURRED SIGNIFICANT CONTINGENT LIABILITIES THROUGH PRIOR SALES OF
OUR COMMON STOCK.
o From November 1998 to December 31, 2000, we received cash
proceeds of $1,020,236.50 from the sale of 4,080,946 shares of
our common stock at $.25 per share and we agreed to issue
413,100 shares of our common stock to the shareholders of
Urban Resource Technologies, Inc. We may not have complied
with applicable securities laws in the sale of those shares
relating to registration and disclosure. As a result, we could
incur civil, administrative and criminal liabilities,
including being required to refund the purchase price, plus
interest.
o We intend to offer rescission to the purchasers of the shares
along with interest. The rescission offer will not preclude
regulatory agencies from bringing legal or administrative
actions against us. Any actions brought against us could
severely limit our ability to obtain financing and could
otherwise have a material adverse effect on our business,
results of operations and financial condition.
BECAUSE WE MAY CHANGE THE PUBLIC OFFERING PRICE PRIOR TO THE END OF THE
OFFERING, THE PRICE THAT YOU PAY MAY BE MORE THAN THE PRICE THAT OTHERS MAY PAY.
o If a market develops for the common stock, it is unlikely that
the market price will exceed the public offering price during
the time that we are offering to publicly sell common stock.
o We may extend the offering period at our sole discretion.
FORWARD-LOOKING STATEMENTS
Many statements made or incorporated by reference in this prospectus
are "forward-looking statements," as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include statements about:
o our ability to manufacture and distribute Fibr-Plast
o our capital needs
o the costs of manufacturing plants
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o the qualities of Fibr-Plast
o potential uses of Fibr-Plast
o the competitiveness of the business in our industry
o our strategies
o other statements that are not historical facts
When used in this prospectus, the words "anticipate," "believe,"
"expect," "estimate," "intend" and similar expressions are generally intended to
identify forward-looking statements. Because these forward-looking statements
involve risks and uncertainties, there are important factors that could cause
our actual results to differ materially from those expressed or implied by these
forward-looking statements, including:
o changes in general economic and business conditions
o actions of our competitors
o the extent to which we are able to develop new markets for
Fibr-Plast
o the time and expense involved in development activities
o the level of demand and market acceptance of our services
o changes in our business strategies
o other factors discussed in the "Risk Factors" section and
elsewhere in this prospectus.
The forward-looking statements in this prospectus reflect what we
currently anticipate will happen. What actually happens could differ materially
from what we currently anticipate will happen. We are not promising to make any
public announcement when we think forward-looking statements in this prospectus
are no longer accurate whether as a result of new information, what actually
happens in the future or for any other reason.
USE OF PROCEEDS
We estimate that the net proceeds we will receive from the sale of
5,000,000 shares of common stock will be approximately $8,800,000, after
deducting brokerage commissions and the estimated offering expenses payable by
us.
We intend to use the net proceeds in the order of priority shown in the
following table:
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
Purchase and installation of all equipment that we believe is
necessary to open two manufacturing plants including shredders,
granulators, extruders, storage silos, conveyor belts and loading
hoppers and payment of initial security and other deposits $5,400,000
Operating capital for four months for the plants $1,936,000
Funding of recision offer $1,200,000
Payment of accrued salaries (net of advances) to affiliates $ 67,000
Working capital and other corporate purposes. $ 197,000
</TABLE>
6
<PAGE> 10
If we sell less than 5,000,000 shares, we intend to only open one
manufacturing plant.
If we pay less than the maximum commissions, we intend to use the
additional proceeds for working capital and other corporate purposes. Funds not
utilized in connection with the rescission offer will be used for working
capital and other corporate purposes.
Because we have broad discretion in the application of proceeds, the
risk that the proceeds will not be applied effectively is increased.
Pending use, we may invest the net proceeds in short-term, investment
grade debt instruments, certificates of deposit or direct or guaranteed
obligations of the United States.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock
and do not anticipate paying any cash dividends on our capital stock in the
foreseeable future. We currently intend to retain future earnings, if any, to
fund the development and growth of our business. Future dividends, if any, will
be determined by our Board of Directors. In addition, we may incur indebtedness
in the future which may prohibit or effectively restrict the payment of
dividends, although we have no current plans to do so.
DILUTION
The following table sets forth certain information relating to the
immediate and substantial dilution in our net tangible book value to be absorbed
by purchasers of the shares being offered by us.
<TABLE>
<S> <C>
Net tangible book value per share on September 30, 2000
(including shares subject to the proposed recession offer) $ (.01)
Net tangible book value per share on September 30, 2000 if
we had sold 5,000,000 shares on that date $ .53
Amount of increase in net tangible book value per share
attributable to cash payments made by purchasers of the
shares being offered $ .54
Amount of the immediate dilution from the public offering
price which will be absorbed by purchasers $ 1.47
Cash contribution of purchasers $10,000,000
Cash contribution of officers, directors, founders and
affiliates $ 160
</TABLE>
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If less than 5,000,000 shares are sold, the amount of the immediate
dilution from the public offering price which will be absorbed by purchasers of
the shares being offered will increase.
MANAGEMENT'S PLAN OF OPERATION
The following should be read in conjunction with our financial
statements and the related notes that appear elsewhere in this prospectus. The
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed in
the forward-looking statements. Factors that could cause or contribute to these
differences include, but are not limited to, those discussed below and elsewhere
in this prospectus, particularly in "Risk Factors."
Our plan of operation during the 12 months after our receipt of the net
proceeds of this offering is dependent upon the number of shares sold in the
offering. If 5,000,000 shares are sold, we intend to open and operate two
Fibr-Plast plants, each of which will be capable of producing approximately
5,000 pounds of Fibr-Plast per hour. If at least 2,500,000 shares but less than
5,000,000 shares are sold, we intend to open and operate one such plant. We have
not determined the geographic area in which any of our plants will be located.
If less than 2,500,000 shares but at least 1,000,000 shares are sold we
intend to open and operate a small Fibr-Plast manufacturing plant. We believe
that the small plant will only be capable of manufacturing approximately 1,000
pounds of Fibr-Plast per hour. The plant will be used primarily to attract
additional investors or joint venture participants and to produce a limited
quantity of Fibr-Plast in an effort to gain brand recognition and market
acceptance of Fibr-Plast. We do not expect to realize a significant profit, if
any, if all our production is manufactured in the small plant.
We did not incur any significant costs to address the impact of the
so-called Year 2000 problem. Our present systems are year 2000 compliant.
Because our plan of operation is flexible, we expect that the net
proceeds of this offering will satisfy our cash requirements for the 12 months
after our receipt of the proceeds.
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PROPOSED BUSINESS
BACKGROUND
Fibr-Plast was developed by a Canadian company which, realizing the
need for affordable housing worldwide, created a product that could be made from
existing waste materials and be used as a wood alternative in low cost building
products. Our former Vice President, Wayne H. Ford, was an employee of the
Canadian company. Mr. Ford has advised us that:
o In 1994, the Canadian company entered into an agreement with
the government of Indonesia to produce enough Fibr-Plast to
build approximately 50 homes.
o The materials were shipped to Indonesia without charge in
anticipation of a much larger order for Fibr-Plast.
o No further orders for Fibr-Plast were placed.
o The absence of further orders was primarily due to a change of
government in Indonesia.
o The Indonesian government built approximately 35 small homes
using Fibr-Plast as a wood alternative for exterior siding.
o He does not know whether these homes are still standing or
whether any problems resulted from the use of Fibr-Plast.
o In 1996, the Canadian company ceased operations and disposed
of its plant and equipment.
o The Canadian company abandoned any rights that it had in the
technology and know-how relating to Fibr-Plast and never
licensed or assigned any of those rights to others.
We have not been able to verify any of the above information we
received from Mr. Ford. We believe that Mr. Ford may have misrepresented certain
other information including his prior experience and his position with the
Canadian company.
An additional home similarly using Fibr-Plast was built in a rural area
of Oklahoma in 1997. We have written to the owner of the home and requested that
he advise us of his experience with Fibr-Plast. We have not received any
response.
We have not manufactured or sold any Fibr-Plast.
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<PAGE> 13
We are the successor to Urban Resource Technologies, Inc., an Oklahoma
corporation which was formed to engage in the business of manufacturing and
selling Fibr-Plast. Both Urban and us had the same founders. Shortly after Urban
was formed, the founders decided that it would be beneficial to operate under
the name "Fibr-Plast Corporation." In order to effect a name change, rather than
actually change the name of Urban, the founders formed Fibr-Plast Corporation,
an Oklahoma corporation, to carry on Urban's proposed business. We agreed to
issue 413,100 shares of our common stock to Urban's shareholders on a
one-for-one basis. Although Urban incurred approximately $103,000 in start-up
costs, it did not manufacture or sell Fibr-Plast.
OPPORTUNITY
Many landfills in the United States are becoming filled with materials
that consist in significant part of plastics and fibrous materials. The filling
of landfills has become a serious environmental, economic and political problem
in the United States. We believe that much of the plastic and fibrous materials
that otherwise would be deposited in landfills can be obtained at economically
advantageous prices and recycled into Fibr-Plast.
PRODUCTS
We believe that Fibr-Plast can be molded into a virtually unlimited
number of shapes, sizes, strengths and densities. We believe that Fibr-Plast is
termite and insect resistant, is rot proof, has a high insulation rating, is
relatively sound deadening and can be made in different fire retardant ratings.
In our limited experience, we have found that Fibr-Plast, unlike wood, will not
split or splinter, twist or warp, has no knots, and every piece can be made
virtually identical to each other.
We expect that initially Fibr-Plast will be used for the following:
o FENCING POSTS - We intend to concentrate our initial
production on fencing posts because of a significant potential
market and the general ability of the consumer to use fencing
posts without regulatory approval or examination.
o LANDSCAPE TIES - Landscape ties are widely used as decorative
items in both residential and commercial applications. They
are available through retail nursery and home improvement
outlets.
o RAILROAD TIES - The ties will initially be sized specifically
for the railroad industry to be used as replacement ties for
the conventional creosote treated, toxic ties currently being
used. We believe that our railroad ties will have several
advantages over the standard wood ties used today because they
will be designed to be termite resistant, rot proof and fire
resistant. We also believe that our railroad ties can obtain
widespread usage in the landscape industry as an alternative
for wood retaining walls and similar structures.
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o ROOF TILE - We believe that the roof tile made of Fibr-Plast
can be used for a variety of buildings, including homes and
multipurpose outbuildings. Flame retardants will be added
during the manufacturing process to comply to regulatory
standards. We expect to produce several grades and styles of
roof tile, distinguishable by the amount of flame retardant
used and the level of finish and color needed to produce
desired "curb appeal." Styles will include corrugated tiles,
shakes, and barrel tiles. We believe that, based upon the
current demand for roofing materials, roof tile will initially
be our dominant product.
o STACKING LOG PROFILES - The logs can be manufactured and cut
into a variety of lengths to accommodate the end user and
project. The logs will be designed to stack on top of each
other with notches cut at the ends to allow the system to
interlock together. If desired, they can be further secured by
nails, screws or glue. Subject to compliance with building
codes, we believe that walls can be made up to ten feet in
length and door and window headers can be made up to three
feet in length without additional structural support.
o ALTERNATIVE LUMBER - We intend to produce Fibr-Plast boards in
various lengths up to ten feet. The boards will be able to be
sawed, screwed, nailed, glued, routed, sanded, patched and
painted.
We believe that Fibr-Plast can also be used for the manufacture of:
o pallets for the shipping and storage industries
o doweling for the pallet industry
o dunnage boards for the lumber industry
o sound barrier walls for the transportation industry
o retaining walls for the construction industry
o decking materials
We anticipate that most potential purchasers of Fibr-Plast products
will subject the products to strenuous testing before placing any meaningful
orders with us. We cannot assure you that any potential customer of Fibr-Plast
products will purchase any of the products after the conclusion of testing.
Because Fibr-Plast has only been used in small amounts for a relatively
short period of time, we cannot be sure that Fibr-Plast will maintain its
initial strength and other qualities for an extended period of time. If through
testing or experience, Fibr-Plast is found to not withstand the elements and
stresses imposed on it by nature and through use, unless we can adequately
improve Fibr-Plast at a reasonable cost, our business, operations and financial
condition will adversely be affected. Because of our limited resources and our
present inability to manufacture Fibr-Plast,
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<PAGE> 15
neither we nor our prospective customers have been able to conduct testing
sufficient to determine the endurance or any other characteristic of Fibr-Plast.
Because Fibr-Plast cannot obtain widespread acceptance as a building
material unless it meets local and regional building codes, we cannot assure you
that Fibr-Plast will ever be accepted for construction use.
o Local and regional building codes provide strict standards for
the types of building materials for which we intend Fibr-Plast
to be utilized.
o We have not submitted Fibr-Plast to any code enforcement
agency.
o If we cannot obtain widespread acceptance from code
enforcement agencies for Fibr-Plast, you can expect to lose
your entire investment in our common stock.
Because our ability to sell meaningful amounts of Fibr-Plast is
dependent, in part, upon the continued or increased levels of demand for
building materials, we could be adversely affected by a downturn in the building
industry which has been both a cyclical and volatile industry. A decrease in the
number of building starts could result in a material downturn in the building
industry which would have a material adverse effect on our business, results of
operations and financial condition.
RECENT DEVELOPMENT - JOINT VENTURE WITH THE SLAVENS GROUP
On August 29, 2000, we entered into an agreement with Samuel Slavens
and Inland Island, Inc., an Oklahoma corporation controlled by Mr. Slavens. Mr.
Slavens and Inland Island are collectively referred to in this prospectus as the
"Slavens Group." The purpose of the agreement was the creation of a joint
venture between the Slavens Group and us. In order to accomplish the joint
venture, TJS Plastics, Inc. was formed as an Oklahoma corporation. We own half
of the outstanding common stock of TJS and the Slavens Group owns the other
half. We and the Slavens Group have agreed to significant restrictions relating
to the sale, transfer, encumbrance or other disposition of the outstanding
shares of TJS. The Board of Directors of TJS consists of our President, our
Executive Vice President, Mr. Slavens and a designee of Mr. Slavens.
The Slavens Group agreed to invest sufficient funds, in the opinion of
the Board of Directors of TJS, to purchase the equipment necessary to produce
Fibr-Plast. The Slavens Group also agreed to purchase a building suitable for a
plant for the manufacture of Fibr-Plast and to make the necessary down payment.
Mr. Slavens has advised us that Inland Island has purchased a building in Tulsa,
Oklahoma for that purpose for $235,000 and has paid a down payment of $15,000.
The Slavens Group has also agreed to obtain a loan of not less than $50,000 to
be used by TJS to purchase additional equipment that may be needed by TJS.
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<PAGE> 16
We do not intend to use a specialized mixer-extruder in TJS's plant
because of cost considerations. Instead, we have committed to deliver a mold for
a manufacture of Fibr-Plast to TJS. We believe that we can obtain the mold for
approximately $10,000. We have also agreed to license the name "Fibr-Plast" to
TJS and to disclose our technology to TJS and the Slavens Group. We have agreed
to market and sell Fibr-Plast products for TJS although the terms and conditions
of the marketing arrangements have not yet been determined.
We have agreed that after the Slavens Group has completed and equipped
the manufacturing facility, we will issue 300,000 shares of our common stock to
the Slavens Group plus an additional 300,000 shares one year later if, at that
time, the Slavens Group has continued to comply with the terms of our agreement.
We have also agreed to issue options to the Slavens Group which will permit it
to purchase up to 250,000 shares of our common stock at $.25 per share for a
period of three years subject to continued compliance by the Slavens Group with
the terms of our agreement.
TJS has agreed to make mortgage payments on the building of $1,909 per
month. If, however, TJS is unable to do so, then the Slavens Group has agreed to
make payments and TJS shall be obligated to reimburse the Slavens Group. To the
extent that TJS makes mortgage payments, it shall receive an equitable interest
in the building. To the extent that TJS has available cash, it will use 70% of
its cash to reimburse the Slavens Group for all expenditures it makes on behalf
of TJS including the purchase of equipment.
The Slavens Group, under the supervision of the Board of Directors of
TJS, will manage and direct manufacturing functions and, in the future, may be
compensated for its services.
During the term of the joint venture with the Slavens Group and for two
years after the term, the Slavens Group may not make any products from
Fibr-Plast using our technology.
In the event that we and the Slavens Group cannot agree upon the
management and operation of TJS, each of the parties has certain rights to
purchase the other parties' shares of TJS at fair market value as determined by
the accountants for TJS.
We have not verified the financial resources of the Slavens Group.
Therefore, we have only the assurance of Mr. Slavens that the Slavens Group has
sufficient resources to comply with our agreement.
RAW MATERIALS
Fibr-Plast will consist of fibrous materials and plastics. The relative
amounts will be based on density and strength requirements of the finished
product. We plan to manufacture Fibr-Plast from post industrial and consumer
waste materials. No virgin materials will be used.
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<PAGE> 17
We believe that virtually any form of plastic is suitable for the
manufacture of Fibr-Plast, even contaminated plastics, such as plastic
containers, that originally contained oil and detergents. We believe that
because of the high temperatures utilized during the manufacturing process, we
can use the containers without any special handling or decontamination.
Furthermore, we believe that there is an abundance of these plastic containers,
with relatively little demand. We also intend to use polystyrene, the material
used in styrofoam cups and dishes, which is virtually nonbiodegradable.
Fibrous materials act as the "glue" in holding the product together.
The fibrous materials which we intend to use consist of the following:
o newspapers
o books
o magazines
o paper
o telephone books
o cardboard
o carpet
o nylon fluff (a byproduct of the tire recycling industry)
o sludge from paper mills
According to a 1995 EPA Waste Characterization Report, paper was the
largest category in U.S. municipal solid waste systems, representing
approximately 39 percent of waste generated before recycling and approximately
33 percent of waste disposed in landfills. According to Resource Recycling, over
12 million tons of scrap paper are generated each year by office workers in the
U.S., or the equivalent of 135 sheets of paper per employee per day.
We believe that the recyclable raw materials will be readily available
to us through existing recycling programs. In addition, we intend to establish
our own programs with major producers of waste in areas where our plants are to
be located. It is likely, however, that as more uses are developed for recycled
materials, prices will rise and availability will decrease. Those circumstances
can be expected to adversely affect our business, financial condition and
results of operations.
MANUFACTURING
When the recycled raw materials arrive at a Fibr-Plast plant, they will
be unloaded and separated, if necessary. They will then be loaded onto two
separate conveyor belts by forklift. One belt will be used for fibrous materials
and the other for plastics. The materials will be granulated and the plastics
will also be shredded. After we confirm the quality of the processing, we will
deposit the pieces into separate storage silos. When we are ready for
production, we will deposit the pieces in production feed silos and weigh them
to determine the ratio of fiber to plastic. The ratios will be adjusted for
strength and density. The materials will then be dumped into a crammer feed
auger. Optional ingredients can be added, such as fire retardants, colors and
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<PAGE> 18
U/V agents to meet the requirements of the particular customer. The mixture will
then be sent to a high speed blender which will mechanically mix and plasticize
the mixture before sending it to an extruder. The extruder will pump the
material through a molding mechanism. The finished product will then be moved
onto a slow moving cooling conveyor where the pliable end product will be cooled
and stabilized or molded into the appropriate shape.
We believe that a plant to manufacture Fibr-Plast can become
operational within ninety days after we have acquired the necessary machinery
and equipment. We have assumed that we will be able to obtain all permits
required to open and operate the plant during that time. If that process
requires more time than we anticipate, our proposed business will be adversely
affected. Other than a specialized mixer-extruder, we believe that all machinery
and equipment necessary to manufacture Fibr-Plast is and will continue to be
readily available. The specialized mixer-extruder, which is the subject of our
patent application, will be constructed to our specifications from readily
available parts. We do not believe we will encounter any significant difficulty
in obtaining the specialized mixer-extruder for the price we have allocated or
during the time period which we have projected. Initially, we plan to utilize
readily available conventional molds rather than the specialized mixer-extruder.
Because we have never manufactured Fibr-Plast and the Canadian company
only manufactured limited quantities of Fibr-Plast, we cannot assure you that
Fibr-Plast can be produced in relatively large quantities on an economical basis
or without significant quality control problems. We may encounter quality
control or other unanticipated production problems, delays and costs when we
begin the manufacturing process. Unless we can economically and timely
manufacture Fibr-Plast in relatively large quantities, you can expect to lose
your investment in our common stock.
INTELLECTUAL PROPERTY
Fibr-Plast is not patentable. Neither Fibr-Plast nor its general
manufacturing process is proprietary.
Prior to entering into discussions with third parties regarding our
technology, we intend to require them to enter into a confidentiality agreement.
We cannot assure you that this measure will provide adequate protection for our
intellectual property.
In December 1998 we filed a patent application entitled "Method and
Apparatus for Extruding Shape Products from Recycled Plastic Materials." The
claims in the application relate to a mixer-extruder of the type designed to
mix, heat and extrude a mix of shredded plastic materials and shredded fibrous
materials. The inventive features of the claims involve the method of operation
whereby the mixer-extruder can produce the desired continuous beam.
In March 2000 we received a letter from the attorneys for an inventor
unrelated to us claiming to hold a patent on the mixer-extruder which is the
subject of our patent application.
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<PAGE> 19
Although we were aware of the inventor's patent, Mr. Ford had advised us that
the process and apparatus of that patent did not work because no viable product
could be produced. We were advised by our intellectual property counsel that
under those circumstances, the inventor's patent would not be operative. We have
not verified Mr. Ford's advice to us.
In October 2000 we received a Notice of Allowance for our patent and we
expect that the patent we will be issued shortly. Our patent, however, when
issued, may be challenged, invalidated or circumvented. Because of our limited
resources, we may be unable to protect any patent we may obtain or to challenge
others who may infringe any patent we obtain. Because many holders of patents in
the building material industry have substantially greater resources than we do
and patent litigation is very expensive, we may not have the resources necessary
to challenge successfully the validity of patents held by others or withstand
claims of infringement or challenges to any patent we may obtain. Even if we
prevail, the cost of litigation could have a material adverse effect on us.
Because building products and their related manufacturing processes are
covered by a large number of patents and patent applications in the United
States remain confidential until a patent is issued, infringement actions may be
instituted against us if we use or are suspected of using technology, processes
or other subject matter that is claimed under patents of others. An adverse
outcome in any future patent dispute could subject us to significant liabilities
to third-parties, require disputed rights to be licensed or require us to cease
using the infringed technology.
If we infringe patents or proprietary rights of others, we may be
required to modify the composition of Fibr-Plast or the method of manufacture or
obtain a license. We may not be able to adequately modify the design or obtain a
license on terms not unfavorable to us, if at all.
In July 2000, a Notice of Allowance was issued by the U.S. Patent and
Trademark Office for a trademark for the trade name "Fibr-Plast." The trademark
will not be effective until we manufacture and sell Fibr-Plast. Because we are
not in a position to manufacture Fibr-Plast, we have requested a six month
extension of time. We believe that our request as well as additional requests,
if needed, will be granted.
Because trade secrets and other means of protection which we may rely
on may not adequately protect us, our intellectual property may become available
to others. We will rely on trade secrets, copyright law, employee and
third-party nondisclosure agreements and other protective measures to protect
some of our intellectual property. These measures may not provide meaningful
protection to us.
The laws of many foreign countries do not protect intellectual property
rights to the same extent as do the laws of the United States, if at all.
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<PAGE> 20
MARKETING
We intend to market Fibr-Plast through a sales and marketing division
which we intend to form. That division will be responsible for soliciting
independent sales representatives of both large and small retail outlets. The
division will also engage in internet sales, production of infomercials and
other sales activities which they may develop. Because we have not yet had
discussions with any potential sales personnel, we cannot assure you that we can
retain suitable personnel on commercially reasonable terms.
We intend to develop a strong brand awareness for Fibr-Plast. If,
however, we cannot develop and then increase brand awareness for Fibr-Plast, we
will not be successful.
COMPETITION
We expect to encounter intense competition in virtually all of our
proposed products from both large and small producers. Competing companies will
include producers of wood products as well as wood substitutes. Substantially
all manufacturers of products that will compete with Fibr-Plast have
substantially greater financial resources than we do. Because most of our
proposed products will essentially be commodities, we expect intense price
competition, particularly in periods of excess supply. Intense competitive
pressures could have a material adverse effect on our proposed business.
Companies with substantially larger expertise and resources than those
available to us may develop or market new, similar or identical products that
directly compete with Fibr-Plast. Because the technologies utilized by the
building materials industry are rapidly changing, competitors may develop
technologies or products that render Fibr-Plast less marketable or obsolete. If
we are unable to continually enhance and improve our product and to develop or
acquire and market new products, we may be unable to compete with others. We may
not be able to successfully enhance any product or develop or acquire new
products primarily because of our limited resources.
Limitations due to the number of vendors and others willing to deal
with an entity of our small size and the terms on which we may be able to obtain
raw materials could place us at a competitive disadvantage. In addition,
companies with substantially larger expertise and resources than those available
to us may develop or market new products that directly compete with Fibr-Plast.
We expect to compete primarily with producers of timber. The supply of
timber is significantly affected by land use management policies of the United
States government, which in recent years has limited and is likely to continue
to limit the amount of timber offered for sale by certain United States
government agencies. Any change of government land use management policies that
substantially increases sales of timber by United States government agencies
could significantly reduce prices for logs, lumber, and other forest products.
The demand for logs and
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<PAGE> 21
manufactured wood products also has been, and in the future can be expected to
be, subject to cyclical fluctuations. The demand for logs and manufactured wood
products is primarily affected by the level of housing starts, repair and
remodeling activity, industrial wood product use, competition from non-wood
products, and the demand for pulp and paper products. These factors are subject
to fluctuations due to changes in economic conditions, interest rates,
population growth, weather conditions, competitive pressures, and other factors.
ENVIRONMENTAL REGULATION
Our proposed manufacturing operations will be subject to federal, state
and local environmental laws and regulations, including laws relating to water,
air, solid waste and hazardous substances. If we fail to comply with these
requirements, we may incur significant costs, civil and criminal penalties, and
liabilities. We intend to maintain an environmental compliance program and
periodically conduct internal environmental compliance reviews of our
facilities.
Environmental laws and regulations have changed substantially and
rapidly and we anticipate there will be continuing changes in the future. The
trend in environmental regulation is to place more restrictions and limitations
on activities that may affect the environment, such as emissions of pollutants
and the generation and disposal of wastes. Strict environmental restrictions and
limitations can result in increased operating costs. Existing or future
environmental laws and regulations, administrative proceedings or judicial
actions may adversely affect us.
We do not believe that our proposed facilities will emit any regulated
substances. If, however, regulated substances are emitted that are subject to
the requirements of the federal Clean Air Act, as amended, and comparable state
statutes, we will be required to obtain federal operating permits under Title V
of the 1990 Clean Air Act Amendments. Title V requires that major industrial
sources of air pollution obtain federally enforceable permits which contain all
of the applicable air quality restrictions for the facility.
The federal Clean Water Act and comparable state statutes regulate
discharges of process wastewater and requires National Pollutant Discharge
Elimination System permits for discharges of industrial wastewater and storm
water into regulated public waters.
Compliance with air emissions and water discharge regulations may
require us to spend material amounts of capital to maintain compliance.
The handling and disposal of certain waste products are subject to
federal and state laws, including the Resource Conservation and Recovery Act,
the Comprehensive Environmental Response, Compensation and Liability Act, also
known as "Superfund," and comparable state laws. The Comprehensive Environmental
act imposes liability, without regard to fault or the legality of the original
act, on certain classes of persons that contribute to a release or threatened
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<PAGE> 22
release of a hazardous substance into the environment. These persons include all
owners or operators of a site at which a release or threatened release occurs,
as well as any person who disposed of, or arranged for disposal of, hazardous
substances at the site.
Our operations will be subject to the requirements of the federal
Occupational Safety and Health Act and comparable state statutes relating to the
health and safety of employees.
FACILITIES
Our offices are located in Tulsa, Oklahoma where we lease approximately
2,000 square feet of office space on a month to month basis. We believe other
office space is and will continue to be available on commercially reasonable
terms.
EMPLOYEES
On December 31, 2000, we had three employees, inclusive of our two
executive officers.
During the first year of operation of each of our proposed full size
manufacturing plants, we expect to hire approximately 41 employees who will be
located in the plant. The employees will consist of a plant manager, 36
additional production personnel and 4 office personnel. We anticipate that the
annual compensation for all such employees will be approximately $895,760. We
believe that each small plant will require approximately 20 employees during the
first year of operation at an annual compensation of approximately $470,000. In
addition, during the one year period beginning at the time that we receive the
proceeds of this offering, we intend to hire approximately 7 employees who will
be engaged in management and corporate support positions and whose annual
compensation will be approximately $185,000.
We believe that we can attract qualified personnel on terms acceptable
to us. Because, however, of our limited resources and developmental stage, our
ability to attract, retain and motivate highly skilled employees is limited.
Furthermore, competition for personnel in our industry is intense. We may,
therefore, not be able to retain key employees or attract, assimilate or retain
other highly qualified employees in the future. Because of our limited
resources, we may not be able to compensate our employees at the same level as
do our competitors. If we do not succeed in attracting new and qualified
personnel, our business will be adversely affected.
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<PAGE> 23
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND FOUNDERS
The following table sets forth the names, ages and positions of our
executive officers and directors as of the date of this prospectus:
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Thomas G. Watson 56 President, Treasurer and Director
Joseph Francella 47 Executive Vice President, Secretary and Director
</TABLE>
Mr Watson has been a director since April 1998. Mr. Francella became a
director in July 1998. Each of their terms expires at the next Annual Meeting of
Stockholders. No family relationship exists between our directors or executive
officers. Mr. Watson, Wayne Ford and Thomas Johns may each be deemed to be a
founder of our company. Upon our receipt of the net proceeds of this offering,
each person named in the table intends to devote substantially all of his
working time to us.
THOMAS G. WATSON has been our President since June 1999. Prior to that
time and since April 1998, Mr. Watson was our Executive Vice President and
Secretary. Mr Watson has been our Treasurer since April 1998. Since 1990, Mr.
Watson has been President and a Director of Neodyne Drilling Corp.
JOSEPH FRANCELLA has been our Executive Vice President and Secretary
since June 1999. Prior to that time and since July 1998, Mr. Francella was our
Vice President. Since February 1995, Mr. Francella has been a self-employed
consultant to small businesses. From January 1997 through September 1998, Mr.
Francella was the President of Jax International, Inc. and its subsidiaries,
builders of low cost housing, which terminated their operations in 1998. The
American Dream Corporation, a subsidiary of Jax, filed a voluntary petition of
bankruptcy in December 1997. From February 1996 until August 1996, Mr. Francella
was the Vice President of Historic Harder Hall, Inc., a company which
unsuccessfully attempted to renovate a former hotel property into a health spa.
From November 1995 through January 1997, Mr. Francella was the Vice President of
Javier Marketing Group, Inc. and Javier Investment Group, Inc., both of which
companies have ceased operations.
Because we are in the developmental stage, our potential success is
significantly dependent upon the personal efforts, abilities and business
relationships of our officers, and, if any of them was to terminate his
employment with us or becomes unable to be employed before a qualified
successor, if any, could be found, we would be materially adversely affected. In
May 1999, Thomas Johns, our then President who had held that position since our
inception, died and in April 2000, Wayne Ford, our then Vice President,
resigned. Although we believe that the loss of Messrs. Ford and Johns will not
prevent us from being successful, we cannot now determine
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<PAGE> 24
the long range result of those losses. We do not maintain "key person" insurance
on any of our employees.
If we are unable to effectively manage our anticipated growth, our
business will be adversely affected. If we are successful in manufacturing and
selling Fibr-Plast, our growth will place a significant strain on our technical,
financial and managerial resources. As part of our anticipated growth, we may
have to implement new operational and financial systems and procedures and
controls to expand, train and manage our employees and to maintain close
coordination among our technical, accounting, customer support, finance,
marketing, and sales staffs.
EXECUTIVE COMPENSATION
In April 1998, we entered into a two-year consulting contract with Mr.
Watson. The contract provided for annual compensation of $30,000 plus reasonable
expenses. We entered into a similar contract with Mr. Francella in July 1998. In
September 1999, the consulting contracts were terminated by the mutual consent
of the parties and replaced by five year employment agreements, each of which
provides for a salary of $52,000 per year and any increase and bonus that may be
awarded by our Board of Directors. Each agreement also provides that we will pay
for a leased automobile. Prior to 2001, none of the salaries had been paid to
Messrs. Watson or Francella. We will use a portion of the net proceeds from the
sale of common stock to pay their unpaid salaries after deducting amounts that
we have advanced to them.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information as of December 31,
2000 with respect to any person who is known to us to be the beneficial owner of
more than 5% of our common stock which is the only class of our outstanding
voting securities and as to each class of the Company's equity securities
beneficially owned by its directors and officers and directors as a group:
<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT OF SHARES PERCENT OF
NAME OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) CLASS(2)
--------------------------- --------------------- --------
<S> <C> <C>
Thomas G. Watson 2,000,000 16%
Joseph Francella 2,000,000 16%
Wayne H. Ford(3) 2,000,000 16%
Timothy M. Johns 1,000,000 8%
Stephanie Solodovnikov 1,000,000 8%
Officers and Directors as a Group
(2 persons) 4,000,000 32%
</TABLE>
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(1) All of the persons named in the table other than Mr. Ford can receive
correspondence c/o Fibr-Plast Corporation, 3225 S. Norwood, Suite 100,
Tulsa, OK 74135. We do not know Mr. Ford's address.
(2) Unless otherwise noted below, we believe that all persons named in the
table have sole voting and investment power with respect to all shares
beneficially owned by them. We have considered a person to be the
beneficial owner of securities that can be acquired by that person
within 60 days from the date of this prospectus upon the exercise of
warrants or options or the conversion of convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
any such warrants, options or convertible securities that are held by
that person (but not those held by any other person) and which have
been exercised or converted.
(3) We believe that Mr. Ford may have wrongfully induced us to sell him our
common stock. We intend to consider instituting legal action against
Mr. Ford seeking a return of the stock. We cannot predict the outcome
of any action we may take against Mr. Ford.
CERTAIN TRANSACTIONS
o From April to October 1998, we issued 2,000,000 shares of
common stock each to Wayne Ford, Thomas Johns and Thomas
Watson for a nominal consideration.
o In April 1998, we entered into two-year consulting contracts
with Messrs. Ford and Johns which provided for annual
compensation of $30,000 plus reasonable expenses.
o From July to October 1998, we issued 2,000,000 shares of
common stock to Mr. Francella for a nominal consideration.
o Prior to 2001, we made non-interest bearing advances as
follows:
<TABLE>
<S> <C>
Wayne Ford $64,572
Joseph Francella $81,500
Thomas Johns $14,575
Neodyne Drilling Corp. $ 2,600
Thomas Watson $83,861
</TABLE>
The advances to Messrs. Francella and Watson will be offset
against salaries to which they are entitled but not yet paid.
The amount that we advanced to Mr. Johns is less than the
salary he would have received under his written agreement
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<PAGE> 26
with us. The amount that was advanced to Mr. Ford is
approximately the same as the salary he would have received
under his written agreements with us. We do not believe,
however, that he was entitled to a substantial portion of the
salary primarily because he did not render the requisite
services to us. We may not be able to collect the amount that
we advanced to Mr. Ford. We do not intend to make any further
advances to any of our affiliates.
o In May 1998, we entered into a sublease for office space and
furniture with Mr. Watson and Thomas Johns for $2,950 per
month who, in turn, subleased the office space from Neodyne.
Our lease expired in March 2000. Since April 2000 we have
subleased the office space and furniture from Neodyne on a
month to month basis. Our monthly rent to Neodyne was $2,950
per month until September 2000 and $1,817 from October through
December 2000. During that three month period, we withheld
rent payments equivalent to the outstanding advances we had
made to Neodyne. Beginning in January 2001, the monthly rent
was reduced to $950. The monthly rent payable by Neodyne for
the office space is approximately $850.
o In September 1999, Mr. Ford's consulting contract was
terminated by the mutual consent of Mr. Ford and us and
replaced by a five year employment agreement which provided
for a salary of $52,000 per year and any increase and bonus
that may be awarded by our Board of Directors. Mr. Ford
resigned in April 2000.
DESCRIPTION OF COMMON STOCK
Our authorized capital stock consists of 25,000,000 shares of common
stock, par value $.00002 per share. The following summary description of our
common stock is qualified in its entirety by reference to our certificate of
incorporation, as amended and our bylaws.
The holders of outstanding shares of our common stock are entitled to
receive dividends out of assets legally available therefor at such times and in
such amounts, if any, as our Board of Directors from time to time may determine.
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders which means that the holders of a
majority of the shares voted can elect all of the directors then standing for
election. The common stock is not entitled to preemptive rights and is not
subject to conversion or redemption.
Following completion of this offering, our directors, executive
officers will own approximately 23% of our outstanding common stock if 5,000,000
shares are sold or 30% if 1,000,000 shares are sold. These stockholders may be
able to influence the outcome of stockholder votes, including votes concerning
the election of directors, amendments to our charter and bylaws and the approval
of significant corporate transactions such as a merger or a sale of our assets.
In addition, the controlling influence could have the effect of delaying,
deferring or preventing a change in control
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<PAGE> 27
CONTROL-SHARE ACQUISITIONS
The Oklahoma General Corporation Act provides that "control shares" of
an "issuing public corporation" acquired in a "control-share acquisition" have
the same voting rights as accorded the shares before the control-share
acquisition only to the extent granted by resolution approved by stockholders.
The resolution must be approved by a majority of the votes of the stockholders
entitled to vote on the resolution, excluding all interested shares. Although we
are not now an "issuing public corporation," we may become one in the future.
The control-share acquisition provisions could have the effect of discouraging
offers to acquire us and of increasing the difficulty of consummating an offer
which could result in an acquisition of "control shares."
TRANSFER AGENT
The transfer agent for our common stock is Florida Atlantic Stock
Transfer, Inc., 7130 Nob Hill Road, Tamarac, FL 33321 and its telephone number
is 954-726-4954.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been any public market for our
common stock and we cannot predict the extent to which investor interest in our
company will lead to the development of a trading market in our common stock or
how liquid that market might become. Sales of substantial amounts of our common
stock in the public market, or the perception that such sales could occur, could
adversely affect prevailing market prices, if any, of our common stock and could
impair our future ability to raise capital through the sale of equity
securities.
Upon completion of this offering, there will be 17,477,450 shares of
our common stock outstanding if 5,000,000 shares are sold or 13,477,450 shares
outstanding if 1,000,000 shares are sold. All the shares sold in this offering
will be freely tradable without restriction or further registration under the
Securities Act other than shares which are held by or may be purchased by our
"affiliates," as that term is defined in Rule 144 under the Securities Act. Of
the 8,477,450 shares held by persons who are not our affiliates, approximately
7,000,000 shares are freely tradable without restriction or further registration
under the Securities Act. Such shares were either sold pursuant to the exemption
from registration then provided by Rule 504 under the Securities Act which did
not then impose any restrictions on their disposition or were sold pursuant to
another exemption and have been held for more than two years by persons who have
not been our affiliates for more than three months.
In general, under Rule 144 an affiliate or other person who owns shares
that were acquired from us at least one year prior to the proposed sale is
entitled to sell, within any three-month period beginning 90 days after the date
of this prospectus, a number of shares that does not exceed the greater of:
o 1% of the number of shares of common stock then outstanding or
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<PAGE> 28
o the average weekly trading volume of the common stock on
Nasdaq during the four calendar weeks preceding the filing of
a notice on Form 144 with respect to such sale.
Sales under Rule 144 are also subject to certain manner of sale
provisions and notice requirements and to the availability of current public
information about us. Where, however, a minimum of three years has elapsed
between the later of the date of the acquisition of restricted securities from
the Company or from an affiliate of the Company and a resale by a person who has
not been an affiliate of the Company for at least the three months immediately
preceding the sale, the sale can be made without regard to any of the
limitations described above. Any shares purchased by our affiliates in this
offering and subsequently publicly sold by those affiliates will not be subject
to the one year holding period.
If a public market develops for our common stock, sales of significant
amounts of our common stock in the public market or the perception that such
sales will occur, could materially adversely affect the market price of the
common stock or our ability to raise capital through future offerings of equity
securities.
If a public market develops for our common stock and the price is below
$5.00 per share, trading in the common stock will be subject to the requirements
of applicable rules under the Securities Exchange Act of 1934 which require
additional disclosure by broker-dealers in connection with any trades involving
the common stock. Those rules require the delivery, prior to any transaction in
the common stock, of a disclosure schedule explaining the penny stock market and
associated risks, and impose various sales practice requirements on
broker-dealers who sell the common stock to persons other than established
customers and accredited investors (generally institutions). For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to sale. The additional burdens imposed upon broker-dealers
may discourage broker-dealers from effecting transactions in our common stock,
which could severely limit its liquidity.
PLAN OF DISTRIBUTION
We are offering the shares on a best efforts minimum/maximum basis.
Unless we receive paid subscriptions for at least 1,000,000 shares by ,
2001, no shares will be sold and all proceeds will be returned to subscribers,
without interest. The public offering price for the shares was determined solely
by us and may not be indicative of prices that will prevail in the trading
market, if one develops. Among the factors we considered in determining the
public offering price were our record of operations, our current financial
condition, our future prospects, the background of our management, and the
general condition of the equity securities market. We may change the public
offering price prior to the end of the offering although we will not reduce the
minimum dollar amount of the offering below $1,000,000. We may also extend the
offering, provided that we receive paid subscriptions aggregating at least
$1,000,000 by , 2001. The market price of our common stock, if any, may
decline below the public offering price.
25
<PAGE> 29
Until we either receive paid subscriptions for a minimum of 1,000,000
shares or the subscription proceeds are returned to subscribers, the proceeds
will be held in a special account at Arvest State Bank, 502 S. Main Mall, Tulsa,
Oklahoma 74103. If a minimum of 1,000,000 shares, subject to change as described
above, are sold and paid for during the offering period, the proceeds from any
additional sales of shares will be made available for use by the Company and
will not be deposited in the special account.
We are making the offering through our officers and directors who will
not be compensated for offering the shares. We will, however, reimburse them for
all expenses incurred by them in connection with the offering. The shares may
also be offered by participating broker-dealers which are members of the
National Association of Securities Dealers, Inc. We may, in our discretion, pay
commissions of up to 10% of the offering price to participating broker-dealers
and others who are instrumental in the sale of shares. We do not know the
identity of any of those persons. We expect to indemnify each participating
broker-dealer against certain liabilities, including liabilities under the
Securities Act of 1933, and that each participating broker-dealer will similarly
agree to indemnify us.
PROPOSED RESCISSION OFFER
From November 1998 to December 31, 2000, we received cash proceeds of
$1,020,236.50 from the sale of 4,080,946 shares of our common stock at $.25 per
share and we agreed to issue 413,100 shares of our common stock to the
shareholders of Urban Resource Technologies, Inc. We believe that the sale of
those shares may not have complied with the registration and disclosure
requirements of applicable securities laws. If we did not comply with those
laws, the purchasers are entitled to compel us to rescind the purchase and pay
interest. The period of time during which the purchasers have that right vary
from state to state, but extends for a period of several years. We intend to
make a rescission offer to the purchasers of the shares. The offer will include
the refund of the purchase price plus interest.
Companies that fail to comply with applicable securities laws can incur
civil, administrative and criminal liabilities. The rescission offer will not
preclude regulatory agencies from bringing legal and administrative actions
against us. Any actions brought against us could severely limit our ability to
obtain financing and could otherwise have a material adverse effect on our
business, results of operations and financial condition.
LEGAL PROCEEDINGS
There are no pending or threatened material legal proceedings to which
we are a party or of which any of our property is the subject or, to our
knowledge, any proceedings contemplated by governmental authorities.
26
<PAGE> 30
INDEMNIFICATION
We have agreed to indemnify our executive officers and directors to the
fullest extent permitted by Section 1031 of the Oklahoma General Corporation
Act. The Act permits us to indemnify any person who is, or is threatened to be
made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by us or in our right) by reason of the fact that the person is or was
an officer or director or is or was serving at our request as an officer or
director. The indemnity may include expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with the action, suit or proceeding, provided that
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to our best interests, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. We may
indemnify officers and directors in an action by us or in our right under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to us. Where an
officer or director is successful on the merits or otherwise in the defense of
any action referred to above, we must indemnify him against the expenses which
he actually and reasonably incurred. The indemnification provisions of the
Oklahoma General Corporation Act are not exclusive of any other rights to which
an officer or director may be entitled under our bylaws, by agreement, vote, or
otherwise.
Insofar as indemnification arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions or otherwise, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
have been passed upon for us by Freese & March, P.A. to the extent set forth in
that firm's opinion filed as an exhibit to our registration statement.
EXPERTS
Our financial statements as of June 30, 2000 and for the period from
April 2, 1998 to June 30, 2000 have been included in this prospectus in reliance
upon the report of Tullius Taylor Sartain & Sartain LLP, independent certified
public accountants, appearing elsewhere in this prospectus, and upon their
authority as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed a registration statement on Form SB-2 with the SEC with
respect to the shares of common stock to be sold in this offering. This
prospectus, which forms a part of that registration statement, does not contain
all of the information included in the registration statement. Certain
information is omitted and you should refer to the registration statement and
its
27
<PAGE> 31
exhibits. With respect to references made in this prospectus to any contract or
other document, the references are not necessarily complete and you should refer
to the exhibits attached to the registration statement for copies of the actual
contract or document. You may review a copy of the registration statement at the
SEC's public reference room in Washington, D.C., and at the SEC's regional
offices in Chicago, Illinois and New York, New York. Please call the SEC at
1-800-SEC-0330 for further information on the operation of its public reference
rooms. The registration statement can also be reviewed by accessing the SEC's
Web site at http://www.sec.gov.
As a result of this offering, we will become subject to the information
and reporting requirements of the Securities Exchange Act of 1934 and will file
periodic reports and other information with the SEC.
We do not intend to furnish our stockholders with annual reports.
28
<PAGE> 32
CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report..................................................F-1
Balance Sheets................................................................F-2
Statements of Operations......................................................F-3
Statements of Cash Flows......................................................F-4
Statement of Stockholders' Deficiency.........................................F-5
Notes to Financial Statements.................................................F-6
</TABLE>
<PAGE> 33
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of Fibr-Plast Corporation
We have audited the accompanying balance sheet of Fibr-Plast Corporation, a
Development Stage Company, as of June 30, 2000, and the related statements of
operations, cash flows and stockholders' equity for the years ended June 30,
2000 and 1999, and for the period from inception, April 2, 1998, to June 30,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fibr-Plast Corporation as of
June 30, 2000, and the results of its operations and its cash flows for the two
years then ended and the period from inception, April 2, 1998 to June 30, 2000,
in conformity with accounting principles generally accepted in the United
States.
As discussed in Note 2 to the financial statements, the Company's previously
issued financial statements for the year ended June 30, 1999, and for the period
from inception to June 30, 1999, have been adjusted to include the transactions
described in Note 2.
TULLIUS TAYLOR SARTAIN & SARTAIN LLP
Tulsa, Oklahoma
September 26, 2000
F-1
<PAGE> 34
FIBR-PLAST CORPORATION
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
2000 June 30,
(unaudited) 2000
------------ ---------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 19,034 $ 1,091
--------- ---------
Total current assets 19,034 1,091
Property and equipment, net 13,621 14,553
Accounts receivable - related parties 10,462 19,312
Fibr-Plast patent, at cost 6,263 6,449
--------- ---------
Total assets $ 49,380 $ 41,405
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable $ 12,035 $ 23,120
Accrued liabilities 82,906 113,083
Notes payable - related party 7,408 7,408
--------- ---------
Total current liabilities 102,349 143,611
Common stock issued subject to rescission 819,843 729,793
Stockholders' deficiency:
Common stock - par value $.00002; 25,000,000
shares authorized; 11,613,746 and 11,153,546 shares
issued including 3,395,746 and 3,035,546 shares
subject to rescission 164 162
Additional paid-in capital 87,830 62,832
Deficit accumulated during the development stage (960,806) (894,993)
--------- ---------
Total stockholders' deficiency (872,812) (831,999)
--------- ---------
Total liabilities and stockholders' deficiency $ 49,380 $ 41,405
========= =========
</TABLE>
See notes to financial statements.
F-2
<PAGE> 35
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Years ended June 30, 2000 and 1999, for
the Period from Inception (April 2, 1998) to June 30,
2000, for the 3 months ended September 30, 2000 and 1999, (unaudited)
and for the Period from Inception (April 2, 1998) to
September 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Three month period ended Inception to
September 30, September 30, September 30,
2000 1999 2000 Year ended June 30, Inception to
---------------------------- ------------ ---------------------------- June 30,
(unaudited) (unaudited) (unaudited) 2000 1999 2000
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ -- $ -- $ -- $ -- $ --
Expenses
General and
administrative expenses 65,813 81,773 960,806 484,938 290,880 894,993
------------ ------------ ------------ ------------ ------------ ------------
Net loss $ (65,813) $ (81,773) $ (960,806) $ (484,938) $ (290,880) $ (894,993)
============ ============ ============ ============ ============ ============
Weighted average shares
outstanding,
including shares subject
to rescission 11,463,380 10,596,971 9,980,208 10,641,303 8,948,319 9,794,811
============ ============ ============ ============ ============ ============
Net loss per share,
basic and diluted $ (.01) $ (.01) $ (.10) $ (.05) $ (.03) $ (.09)
============ ============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
F-3
<PAGE> 36
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Years ended June 30, 2000 and 1999, for
the Period from Inception (April 2, 1998) to June 30,
2000, for the 3 months ended September 30, 2000 and 1999, (unaudited)
and for the Period from Inception (April 2, 1998) to
September 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Three month period ended Inception to
September 30, September 30,
---------------------------- -------------
2000 1999 2000 Year ended June 30, Inception to
------------ ------------ ------------ --------------------------- June 30,
(unaudited) (unaudited) (unaudited) 2000 1999 2000
------------ ------------ ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (65,813) $ (81,773) $(960,806) $(484,938) $(290,880) $(894,993)
Depreciation and amortization 1,118 718 5,622 4,504 -- 4,504
Contribution of services -- -- 131,584 62,834 -- 131,584
Changes in:
Accounts receivable (1,150) (87,221) (20,462) 52,208 (71,520) (19,312)
Deferred offering expense -- -- 13,000 13,000 -- 13,000
Accrued liabilities 4,823 (13,780) 117,906 13,084 84,100 113,084
Accounts payable (11,085) (2,308) 12,035 20,811 2,308 23,119
--------- --------- --------- --------- --------- ---------
Net cash used in
operating activities (72,107) (184,364) (701,121) (318,497) (275,992) (629,014)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment -- (7,380) (18,034) (8,116) (9,918) (18,034)
Fibr-Plast patent cost -- (1,000) (7,472) (1,300) (6,172) (7,472)
--------- --------- --------- --------- --------- ---------
Net cash used in investing activities -- (8,380) (25,506) (9,416) (16,090) (25,506)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock 90,050 230,650 751,253 314,580 312,098 661,203
Offering expense -- -- (13,000) -- (13,000) (13,000)
Proceeds from notes payable -- -- 7,408 -- 7,408 7,408
--------- --------- --------- --------- --------- ---------
Net cash provided by financing activities 90,050 230,650 745,661 314,580 306,506 655,611
--------- --------- --------- --------- --------- ---------
Increase (decrease) in cash 17,943 37,906 19,034 (13,333) 14,424 1,091
Cash, beginning of period 1,091 14,424 -- 14,424 -- --
--------- --------- --------- --------- --------- ---------
Cash, end of period $ 19,034 $ 52,330 $ 19,034 $ 1,091 $ 14,424 $ 1,091
========= ========= ========= ========= ========= =========
</TABLE>
See notes to financial statements.
F-4
<PAGE> 37
FIBR-PLAST CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
For the Period from Inception (April 2, 1998) to September 30, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common stock Common stock Paid-in Development
Shares* Amount Capital Stage Total
------------ ------------ ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Issuance of shares to founders 240 $ 120 $ -- $ -- $ 120
Issuance of shares to Urban
stockholders 413,100 -- -- -- --
Net loss -- -- -- (119,175) (119,175)
---------- ---------- ---------- ---------- ----------
Balance June 30, 1998 413,340 120 -- (119,175) (119,055)
Issuance of shares to founders
and affiliate 7,999,760 40 -- -- 40
Sale of common stock 1,364,126 -- -- -- --
Net loss -- -- -- (290,880) (290,880)
---------- ---------- ---------- ---------- ----------
Balance June 30, 1999 9,777,226 160 -- (410,055) (409,895)
Net Loss -- -- -- (484,938) (484,938)
Sale of common stock 1,258,320 -- -- -- --
Shares issued for services 118,000 2 62,834 -- 62,834
---------- ---------- ---------- ---------- ----------
Balance June 30, 2000 11,153,546 162 62,832 (894,993) (831,999)
Shares issued for services 100,000 2 24,998 -- 25,000
Sale of common stock 360,200 -- -- -- --
Net loss -- -- -- (65,813) (65,813)
---------- ---------- ---------- ---------- ----------
Balance September 30, 2000 11,613,746 $ 164 $ 87,830 $ (960,806) $ (872,812)
========== ========== ========== ========== ==========
</TABLE>
* Including shares issued subject to rescission.
See notes to financial statements.
F-5
<PAGE> 38
FIBR-PLAST CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Information as of September 30, 2000 and
for the three months ended September 30, 2000 and 1999 is unaudited)
NOTE 1 - DESCRIPTION OF THE BUSINESS
Fibr-Plast Corporation (the "Company") is a development stage company formed to
take advantage of an existing technology process and product called
"Fibr-Plast." The Fibr-Plast technology uses 100% recycled, solid waste, post
consumer materials to produce an alternative wood product. It can be molded into
an unlimited number of shapes and sizes, strengths and densities. The market for
alternative wood products is worldwide.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and development stage operations
The Company is the successor to Urban Resource Technologies, Inc., an Oklahoma
corporation ("Urban"), which was formed to manufacture and sell Fibr-Plast.
Shortly after Urban was formed, the founders decided that it would be beneficial
to operate under the name "Fibr-Plast Corporation." In order to effect a name
change, Urban's founders incorporated Fibr-Plast Corporation, an Oklahoma
corporation, on April 2, 1998, to carry on Urban's then proposed business. Urban
had sold 138,100 common shares for $34,525 cash proceeds, and had issued 275,000
shares for services rendered. The Company agreed to issue its common stock for
Urban's common stock on a one-for-one basis. As of June 30 and September 30,
2000, certificates for only 121,800 shares have been issued, but the total
413,100 shares are treated as being outstanding for all purposes. The cash and
in-kind proceeds from the sale of Urban stock of $103,275 were expended for
start-up costs and are included in the Company's net loss and deficit
accumulated during the development stage for the period from inception to June
30, 1998.
During the year ended June 30, 1999, approximately $50,000 resulting from sales
of approximately 200,000 shares of the Company's common stock was paid directly
to the Company's founders for expenses incurred by them on the Company's behalf.
The financial statements previously issued for the year ended June 30, 1999, and
for the period from inception to June 30 1999, did not include the Urban
transaction, or the sale of 200,000 shares of common stock described above. The
1999 financial statements included herein have been adjusted to include these
transactions.
F-6
<PAGE> 39
Since inception, the Company's primary focus has been raising capital for
construction of a plant, and is in the development stage.
Management estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Property and equipment
Property and equipment is recorded at cost and consists of furniture and
fixtures, office and other equipment. Property and equipment is depreciated on
the straight-line method over estimated useful lives. Depreciation expense and
accumulated depreciation in the accompanying financial statements are not
material.
New accounting standards
The Company adopted SFAS No. 130, "Reporting Comprehensive Income" and SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information"
during the period ended June 30, 1999. The Company has no comprehensive income
items. Therefore, net loss equals comprehensive income. The Company operates in
only one business segment. The Company will adopt SFAS No. 133, "Accounting for
Derivative Investments and Hedging Activities" during fiscal 2001. Currently,
the Company does not engage in hedging activities or transactions involving
derivatives.
Reclassifications
Certain items have been reclassified to conform with their current
classifications.
NOTE 3 - RELATED PARTIES
At the Company's inception, 240 shares of common stock were issued to the
Company's founders for nominal consideration. In October 1998, the par value was
changed from $.50 per share to $.00002 per share and 7,999,760 shares were
issued to the Company's founders and an affiliate.
In April 1998, the Company entered into two-year consulting contracts with three
of its officers, and entered into a similar contract with another officer in
July 1998, each for $30,000 annually. In September 1999, the consulting
contracts then in effect were terminated. The three remaining officers entered
into five-year employment agreements, each of which provides for an annual
salary of $52,000, plus the cost of a leased automobile. No consulting
compensation or salaries were paid through June 30, 2000. The amounts provided
for in these contracts have been accrued
F-7
<PAGE> 40
as general and administrative expenses. Advances paid to the officers have been
offset against a portion of accrued salaries. Accrued unpaid salaries included
in accrued liabilities are $81,905 and $74,739 at June 30, 2000 and September
30, 2000, respectively.
The Company contracted to rent office space and furniture from related parties
for $2,950 per month through April 2000, and month-to-month thereafter. Total
rent since inception is $79,550.
NOTE 4 - INCOME TAXES
The Company's tax loss carryforward of approximately $650,000 as of June 30,
2000 will expire in 2020. A valuation allowance fully offsets the tax benefit of
the carryforward of approximately $220,000.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
From November 1998 to June 2000, the Company sold 3,035,546 (3,395,746 as of
September 30, 2000) shares of its common stock for cash and in-kind
consideration aggregating $729,793 ($819,843 as of September 30, 2000). The sale
of these shares may not have complied with applicable securities laws. The
purchasers may be able to compel the Company to rescind the purchases and pay
interest. Management intends to make a rescission offer. Until the offer for
rescission has been extended and declined, the cash and in-kind consideration
received from these stock sales will be reported as a liability.
In August 2000, the Company entered into an agreement to establish a corporate
joint venture, to be owned 50% by the Company, for the purpose of constructing
and operating a Fibr-Plast manufacturing facility. The joint venture partner is
responsible for furnishing plant and equipment, providing start-up operating
capital, and obtaining joint venture debt. The Company will provide a
non-exclusive license to use the Fibr-Plast name, furnish manufacturing
technology, and provide marketing and sales services. After making provisions
for retiring indebtedness, joint venture net income shall be split equally.
After the joint venture partner has completed and equipped the manufacturing
facility, then the Company will issue to the partner 300,000 shares of its
common stock. Twelve months thereafter, the Company will issue to the partner an
additional 300,000 shares of its common stock assuming continued compliance with
the joint venture agreement. In addition, the Company will issue options to
purchase 250,000 shares of its common stock, exercisable during a three-year
period at $.25 per share.
Because the joint venture partner is providing the necessary capital to commence
operations, Company management believes that its' limited capital needs can be
met by additional sales of common stock.
F-8
<PAGE> 41
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FIBR-PLAST,
INC. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF FIBR-PLAST, INC. SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH
IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
IN MAKING A DECISION WHETHER TO BUY OUR COMMON STOCK, YOU SHOULD ONLY RELY ON
THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH ANY DIFFERENT OR OTHER INFORMATION. THE INFORMATION IN THIS
PROSPECTUS MAY ONLY BE ACCURATE ON THE DATE OF THIS PROSPECTUS.
-----------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY............................................................2
RISK FACTORS..................................................................3
FORWARD-LOOKING STATEMENTS....................................................5
USE OF PROCEEDS...............................................................6
DIVIDEND POLICY...............................................................7
DILUTION .....................................................................8
MANAGEMENT'S PLAN OF OPERATION................................................8
PROPOSED BUSINESS.............................................................9
MANAGEMENT...................................................................20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...............21
CERTAIN TRANSACTIONS.........................................................22
DESCRIPTION OF COMMON STOCK..................................................23
SHARES ELIGIBLE FOR FUTURE SALE..............................................24
PLAN OF DISTRIBUTION.........................................................25
PROPOSED RESCISSION OFFER....................................................26
LEGAL PROCEEDINGS............................................................26
INDEMNIFICATION..............................................................26
LEGAL MATTERS................................................................27
EXPERTS ....................................................................27
ADDITIONAL INFORMATION.......................................................27
</TABLE>
UNTIL , 2001 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN
THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
<PAGE> 42
5,000,000 SHARES
FIBR-PLAST CORPORATION
COMMON STOCK
------------------------
PROSPECTUS
------------------------
, 2001
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by the Registrant in connection with this offering are
as follows. All amounts other than the SEC registration fee are estimates.
<TABLE>
<S> <C>
SEC registration fee $ 2,780
Printing and engraving $ 30,000
Legal fees and expenses $ 100,000
Accounting and auditing fees and expenses $ 8,300
Blue sky fees and expenses $ 5,000
Transfer agent fees $ 3,500
Travel Expenses $ 25,000
Miscellaneous $ 25,420
Total........................................ $ 200,000
</TABLE>
ITEM 25. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant had agreed to indemnify its executive officers and directors to
the fullest extent permitted by Section 1031 of the Oklahoma General Corporation
Act. That Act permits the Registrant to indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by the Registrant or in its right) by reason of the fact
that the person is or was an officer or director or is or was serving at our
request as an officer or director. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with the action, suit or
proceeding, provided that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to our best interests, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The Registrant may indemnify officers and directors in an action
by the Registrant or in its right under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the Registrant. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the Registrant must indemnify him against the expenses which
he actually and reasonably incurred. The foregoing indemnification provisions
are not exclusive of any other rights to which an officer or director may be
entitled under our bylaws, by agreement, vote, or otherwise.
II-1
<PAGE> 44
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(a) (1) From April to October 1998, the Registrant sold
2,000,000 shares of common stock to each of Wayne H.
Ford, Thomas C. Johns and Thomas G. Watson.
(2) From July to October 1998, the Registrant sold
2,000,000 shares of common stock to Joseph Francella.
(3) From November 1998 to December 31, 2000, the
Registrant sold an aggregate of 4,080,946 shares of
common stock to private investors. The Registrant
believes that each purchaser who was not an
accredited investor had such knowledge and experience
in financial and business matters that he was capable
of evaluating the merits and risks of the prospective
investment.
(4) In December 1998 the Registrant agreed to issue an
aggregate of 413,100 shares of common stock to 27
persons who then were the shareholders of Urban
Resource Technologies, Inc., an Oklahoma corporation.
(5) In June 2000, the Registrant issued 68,000 and 50,000
shares of common stock to Nelson Orr and Robin F.
Howard, respectively, for services rendered. In July
2000, the Registrant issued 100,000 shares of common
stock to Tony Felitsky for services rendered.
(b) There were no principal underwriters.
(c) The aggregate consideration for the securities referred to in
subparagraphs (a)(1) and (2) was $160. The aggregate
consideration for the securities referred to in subparagraph
(a)(3) was $1,020,236.50. The consideration for the securities
referred to in subparagraph (a)(4) was shares of Urban
Resource Technologies, Inc. which had no meaningful value. The
consideration for the securities referred to in subparagraph
(a)(5) is set forth in that subparagraph.
(d) The Registrant claimed exemption from the registration
provisions of the Securities Act with respect to the
securities referred to in subparagraphs (a)(1), (2) and (5)
pursuant to Section 4(2) thereof inasmuch as no public
offering was involved. The Registrant claimed exemption from
the registration provisions of the Securities Act with respect
to the securities referred to in subparagraphs (a)(2), (3) and
(4) pursuant to Section 3(b) of the Act and Rule 504
thereunder as then in effect. Sales of such securities made
subsequent to April 6, 1999 were not offered pursuant to any
form of general solicitation or general advertising and the
Registrant exercised reasonable care to assure that the
purchasers were not underwriters within the meaning of Section
2(11) of the Securities Act. In connection with such sales,
the Registrant (a) made reasonable inquiry to determine if
each purchaser acquired the
II-2
<PAGE> 45
shares for himself or for other persons; (b) made written
disclosure to each purchaser prior to sale that the shares
have not been registered under the Securities Act and,
therefore, cannot be resold unless they are registered under
the Securities Act or unless an exemption from registration is
available; and (b) placed a legend on the stock certificates
stating that the shares have not been registered under the
Securities Act and setting forth or referring to the
restrictions on transferability and sale of the shares.
ITEM 27. EXHIBITS.
1.01 Form of Selected Dealer Agreement*
3.01 Certificate of Incorporation, as amended.**
3.03 Bylaws.**
4.01 Form of Specimen Stock Certificate for the Registrant's Common
Stock.*
5.01 Opinion of Freese & March, P.A. regarding legality of
securities being registered.*
10.01 Consulting Agreement of April 3, 1998 between the Registrant
and Wayne H. Ford.**
10.02 Consulting Agreement of April 3, 1998 between the Registrant
and Thomas C. Johns.**
10.03 Consulting Agreement of April 3, 1998 between the Registrant
and Thomas G. Watson.**
10.04 Consulting Agreement of July 3, 1998 between the Registrant
and Joseph Francella.**
10.05 Employment Agreement of September 1, 1999 between the
Registrant and Wayne H. Ford.**
10.06 Employment Agreement of September 1, 1999 between the
Registrant and Thomas G. Watson.**
10.07 Employment Agreement of September 1, 1999 between the
Registrant and Joseph Francella.**
10.08 Lease Agreement of May 1, 1998 between the Registrant and Tom
Johns and Tom Watson.**
II-3
<PAGE> 46
10.09 Preincorporation Agreement of August 29, 2000 between Samuel
Slavens, Inland Island, Inc. and the Registrant.*
23.01 Consent of Freese & March, P.A. (included in Exhibit 5.01).*
23.02 Consent of Tullius Taylor Sartain & Sartain LLP.*
----------
* Filed herewith.
** Previously filed as an exhibit to the Registration Statement.
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the Registration Statement; and
(iii) include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Securities Act, each such
post-effective amendment shall be treated as a new registration
statement of the securities offered, and the offering of the securities
at that time to be the initial bona fide offering
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 47
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Tulsa,
State of Oklahoma, on the 12th day of January, 2001.
FIBR-PLAST CORPORATION
/s/ Thomas G. Watson
----------------------------------------
By: Thomas G. Watson, President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Thomas G. Watson Chief Executive Officer, Chief January 12, 2001
------------------------------ Financial and Accounting Officer and
Thomas G. Watson Director
/s/ Joseph Francella Director January 12, 2001
------------------------------
Joseph Francella
</TABLE>
II-5
<PAGE> 48
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
1.01 Form of Selected Dealer Agreement*
3.01 Certificate of Incorporation, as amended.**
3.03 Bylaws.**
4.01 Form of Specimen Stock Certificate for the Registrant's Common
Stock.*
5.01 Opinion of Freese & March, P.A. regarding legality of securities
being registered.*
10.01 Consulting Agreement of April 3, 1998 between the Registrant and
Wayne H. Ford.**
10.02 Consulting Agreement of April 3, 1998 between the Registrant and
Thomas C. Johns.**
10.03 Consulting Agreement of April 3, 1998 between the Registrant and
Thomas G. Watson.**
10.04 Consulting Agreement of July 3, 1998 between the Registrant and
Joseph Francella.**
10.05 Employment Agreement of September 1, 1999 between the Registrant and
Wayne H. Ford.**
10.06 Employment Agreement of September 1, 1999 between the Registrant and
Thomas G. Watson.**
10.07 Employment Agreement of September 1, 1999 between the Registrant and
Joseph Francella.**
10.08 Lease Agreement of May 1, 1998 between the Registrant and Tom Johns
and Tom Watson.**
10.09 Preincorporation Agreement of August 29, 2000 between Samuel Slavens,
Inland Island, Inc. and the Registrant.*
23.01 Consent of Freese & March, P.A. (included in Exhibit 5.01).*
23.02 Consent of Tullius Taylor Sartain & Sartain LLP.*
</TABLE>
----------
* Filed herewith.
** Previously filed as an exhibit to the Registration Statement.
