10QSB/A 1 march2001-10qa.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB/A-2 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 ---------------- Commission File Number: 0-26322 EAGLE BUILDING TECHNOLOGIES, INC. ----------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) Nevada 88-0303769 ------------------------ ----------------------- (State of Incorporation) (IRS Employer I.D. No.) 20283 Powerline Road, Suite 213, Boca Raton, Florida 33498 ---------------------------------------------------------- (Address of principal executive offices ) (561) 487-3600 ------------------------------------------------ (Issuer's telephone number, including area code) EAGLE CAPITAL INTERNATIONAL, LTD. ----------------------------------------------------- (Former name, former address, and former fiscal year, if changed since last report) Check whether the Issuer: (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ APPLICABLE ONLY TO CORPORATE ISSUERS There were 4,945,245 shares of Common Stock, $.001 par value, issued and outstanding at March 31, 2001. -1- EAGLE CAPITAL INTERNATIONAL, LTD. INDEX PART I. AMENDED FINANCIAL INFORMATION Item 1. Amended Financial Statements Balance Sheets - March 31, 2001 (Unaudited) and December 31, 2000 Statements of Operations - Three months ended March 31, 2001 and 2000 (Unaudited). Statements of Cash Flows - Three months ended March 31, 2001 and 2000 (Unaudited). Notes to Financial Statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security-Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K SIGNATURES -2- EAGLE CAPITAL INTERNATIONAL, LTD. This Form 10-QSB for the period ended March 31, 2001, has been amended from the original filing of May 14, 2001. During February 2002, the Company became aware that its former Chairman and Chief Executive Officer had prepared fraudulent documents to misrepresent the revenues, costs, and cash associated with operations conducted by the Company's wholly-owned subsidiary in India, and concerning certain loans and stock transactions. PART I - FINANCIAL INFORMATION Item I. Amended Financial Statements ---------------------------- -3- EAGLE BUILDING TECHNOLOGIES, INC. AMENDED CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS March 31, December 31, 2001 2000 ----------- ------------ (Unaudited) CURRENT ASSETS: Cash $ 134,107 $ - Accounts Receivable 506,690 559,415 Receivable from Officer 676,771 688,271 Other Advances 200,718 236,232 Inventories 1,447,665 1,348,518 Prepaid expenses 5,200 - ---------- ---------- TOTAL CURRENT ASSETS 2,971,151 2,832,436 ---------- ---------- PROPERTY AND EQUIPMENT, net 3,399,470 3,174,811 ---------- ---------- OTHER ASSETS - Deposits 20,146 120,146 Goodwill, net 3,023,702 3,063,170 Investment in joint venture 617,119 583,119 License rights, net 5,348,563 5,419,750 ---------- ---------- TOTAL OTHER ASSETS 9,009,530 9,186,185 ---------- ---------- TOTAL ASSETS $15,380,151 $15,193,432 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 1,202,000 $ 3,513,745 Cash overdraft - 439 Notes payable 5,670,710 7,007,266 Deposits 729,232 - ---------- ---------- TOTAL CURRENT LIABILITIES 7,601,942 10,521,450 ---------- ---------- LONG TERM LIABILITIES 854,243 50,775 ---------- ---------- REDEEMABLE COMMON STOCK, 155,834 shares issued and outstanding 1,168,748 1,168,748 ---------- ---------- SHAREHOLDERS' EQUITY: Common Stock, $.001 par value 11,666,666 shares authorized 4,945,245 and 4,034,243 shares issued and outstanding at March 31, 2001 and December 31, 2000 4,945 4,034 Additional paid in capital 21,402,199 17,697,898 Accumulated deficit (15,651,926) (14,249,473) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 5,775,218 3,452,459 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,380,151 $15,193,432 ========== ==========
See accompanying notes to condensed consolidated financial statements. -4- EAGLE BUILDING TECHNOLOGIES, INC. AMENDED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, March 31, 2001 2000 ---------- ---------- SALES $ 611,144 $ - COSTS OF SALES 484,944 - ---------- ---------- GROSS PROFIT 126,200 - ---------- ---------- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (1,506,264) 1,176,947 ---------- ---------- LOSS FROM OPERATIONS (1,380,064) (1,176,947) ---------- ---------- OTHER EXPENSES: Interest expense (22,389) (850,000) ---------- ---------- NET LOSS $(1,402,453) $(2,026,947) ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic 4,489,744 1,247,365 - Diluted 4,489,744 1,247,365 NET LOSS PER COMMON SHARE - Basic (.31) (1.62) ---------- ---------- - Diluted $ (.31) $ (1.62) ========== ==========
See accompanying notes to condensed consolidated financial statements. -5- EAGLE BUILDING TECHNOLOGIES, INC. AMENDED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, March 31, 2001 2000 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,402,453) $(2,026,947) Adjustments to reconcile net loss to net cash used in operating activities: Amortization 110,655 - Stock issued for services and interest 580,212 - Depreciation 22,247 - Interest expense from beneficial conversion features on debt - 850,000 Changes in operating assets and liabilities: Advances 35,514 - Accounts receivable 52,725 - Inventories (99,147) - Prepaid expenses (5,200) - Deposits 729,232 - Accounts payable and accrued expenses (2,311,745) (96,665) Note payable - Lone Wolf - 1,000,000 NET CASH USED IN ---------- ---------- OPERATING ACTIVITIES (2,287,960) (273,612) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in other assets 100,000 - Investment in subsidiaries (net of cash acquired) (34,000) (484,863) Investment in license rights - (5,000) Purchase of property, plant and equipment (246,906) (762,900) NET CASH USED IN ---------- ---------- INVESTING ACTIVITIES (180,906) (1,252,763) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash overdraft (439) - Net advances from officer 11,500 634,826 Net proceeds on notes payable 216,912 850,000 Proceeds from issuance of stock 2,375,000 22,500 NET CASH PROVIDED BY ---------- ---------- FINANCING ACTIVITIES 2,602,973 1,507,326 ---------- ---------- NET INCREASE (DECREASE) IN CASH 134,107 (19,049) CASH AT BEGINNING OF PERIOD - 20,326 ---------- ---------- CASH AT END OF PERIOD $ 134,107 $ 1,277 ========== ==========
See accompanying notes to condensed consolidated financial statements. -6- EAGLE CAPITAL INTERNATIIONAL, INC. AMENDED NOTES TO FINANCIAL STATEMENTS MARCH 31, 2001 NOTE 1 - BASIS OF PRESENTATION --------------------- The accompanying interim condensed consolidated financial statements of Eagle Capital International, Ltd. are unaudited, but in the opinion of management reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results for such periods. The results of operations for any interim period are not necessarily indicative of the results for the respective full year. These condensed financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's annual report on Form 10-KSB for the year ended December 31, 2000 as filed with the Securities and Exchange Commission. Amended March 31, 2001 Balance Sheet and Statements of Operations for the Three Months Then Ended ------------------------------------------------------ The accompanying financial statements have been amended from the original filing for adjustments made as reflected below. During February 2002, the Company became aware that its former Chairman and Chief Executive Officer had prepared fraudulent documents to misrepresent the revenues, costs, and cash associated with operations conducted by the Company's wholly-owned subsidiary in India, and concerning certain loans and stock transactions. The following represents the accounts adjusted which changed the net loss reported:
Three Months Ended March 31, 2001 Amended Prior Change --------- --------- ---------- Revenues $ 611,144 $4,098,661 $(3,487,517) Cost of sales 484,944 1,682,444 1,197,500 Selling, general and administrative expenses 1,506,264 1,327,100 (179,164) Interest expense 22,389 3,902 (18,487) --------- --------- ---------- Increase in net loss (2,487,668) Net income as originally reported 1,085,215 ---------- Net loss as amended $(1,402,453) ==========
Revenues - During the quarter ended March 31, 2001, the Company originally recorded sales of $3,446,553 from its India subsidiary and now is amending the financial statements for the three months ended March 31, 2001 to remove the incorrectly reported revenue. -7- EAGLE CAPITAL INTERNATIIONAL, INC. AMENDED NOTES TO FINANCIAL STATEMENTS MARCH 31, 2001 NOTE 1 - BASIS OF PRESENTATION (Cont'd) ------------------------------ Selling, General and Administrative Expense - Amended to remove commissions originally recorded for non-existent sales from the Company's India subsidiary. The following represents the balance sheet accounts adjusted on the amended March 31, 2001 balance sheet:
Amended Prior Change ----------- ---------- ---------- Cash $ 134,107 $ 2,333,747 $(2,199,640) Accounts receivable 506,690 547,654 (40,964) Other advances 200,718 239,218 (38,500) Receivable from officer 676,771 (395,979) 1,072,750 Investment in joint venture 617,119 583,119 34,000 Property and equipment 3,399,470 2,975,971 423,499 Accounts payable and accrued expenses (1,202,000) (503,348) (698,652) Other short term notes payable (5,670,710) (1,536,924) (4,133,786) Redeemable Common Stock (1,168,748) -0- (1,168,748) Common stock and additional paid-in capital (21,407,144) (19,170,932) (2,236,212) Accumulated deficit 15,651,926 8,790,673 6,861,253 Convertible note/equity instrument -0- (2,125,000) 2,125,000 ----------- ----------- ---------- $ -0- ==========
NOTE 2 - STOCKHOLDERS' EQUITY -------------------- Changes in Stockholders' Equity - The following represents the changes in stockholders' equity from January 1, 2000 through March 31, 2001:
Additional Common Paid In Shares Amount Capital --------- --------- ----------- Balance - Jan. 1, 2001 4,034,243 $ 4,034 $17,697,898 Common stock sold for cash 558,335 558 2,374,442 Issuance of Common Stock for services and interest 102,667 103 580,109 Note payable conversion 250,000 250 749,750 --------- ------- ----------- Balance - March 31, 2001 4,945,245 $ 4,945 $21,402,199 ========= ======= ===========
-8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS The analysis of the Company's financial condition, liquidity, capital resources and results of operations should be viewed in conjunction with the accompanying financial statements including the notes thereto. Financial Condition At March 31, 2001, the Company had total assets of $15,380,151, as compared to total assets of $15,193,432 at December 31, 2000; and total liabilities[1] of $8,456,185 at March 31, 2001, as compared to total liabilities of $10,572,225 at December 31, 2000; and stockholders' equity at March 31, 2001 of $5,755,218, as compared to $3,452,459 at December 31, 2000. Liquidity and Capital Resources As of March 31, 2001, the Company's cash totaled $134,107 as compared to a cash overdraft of $439 at December 31, 2000. Net cash used in operations was $2,287,960 for the quarter ended March 31, 2001, compared to $273,612 in the same quarter ended March 31, 2000. The Company has no present additional commitment that is likely to result in its liquidity increasing or decreasing in any significant way. In addition, the Company knows of no trend, additional demand, event or uncertainty that will result in, or that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way. Results of Operations Sales for the three months ended March 31, 2001 were $611,144 compared with sales of $-0- in the quarter ended March 31, 2000. The Company recorded a net loss of $1,402,453 for the quarter ended March 31, 2001, compared to a net loss of $2,026,947 for the quarter ended March 31, 2000. FORWARD LOOKING STATEMENTS Statements made in this Management's Discussion and Analysis and elsewhere in this Annual Report that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future contain forward looking statements. Such forward looking statements include, without limitation, statements --------------------- [1] As a result of the Company's investigation in connection with the restatement of its 2000 and 2001 financials, the Company believes that there may be third parties to whom Anthony D'Amato, the Company's former Chairman and CEO, has obligated, or made representations purporting to obligate, the Company, or to issue equity in the Company without the knowledge or authorization of the Company,'s Board of Directors. The Company will continue to investigate and determine the validity of any such third party claims on a case by case basis. At the time of this filing, the Company cannot determine the financial impact, if any to the Company as a result of Mr. D'Amato's actions. -9- regarding the Company's planned capital expenditure requirements, cash and working capital requirements, the Company's expectations regarding the adequacy of current financing arrangements, product demand and market growth, other statements regarding future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. It should be noted that the Company's actual results could differ materially from those contained in such forward looking statements mentioned above due to adverse changes in any number of factors that affect the Company's business including, without limitation, risks associated with investing in and the marketing of IMSI's Wall System, risks concerning the protection of IMSI's patents, reliance upon distributors, regulatory risks, risks of expansion, product liability and other risks described herein. -10- PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS Not Applicable. Item 2. CHANGE IN SECURITIES Not Applicable Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On April 19, 2001, proxies were submitted by a majority of the shareholders of Eagle Capital International, Ltd. approving a change of the Company name to Eagle Building Technologies, Inc. Item 5. OTHER INFORMATION On April 19, 2001, the majority shareholders of Eagle Capital International, Ltd. approved a change of the Company name to Eagle Building Technologies, Inc. which becomes effective May 14, 2001. The Company's new trading symbol will be "EGBT". Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) There are no exhibits required to be filed for the period covered by this Report. (b)(i) On or about January 9, 2001, the Company filed a Report on Form 8-K/A amending the Forms 8-K filed on or about November 30, 2000 and December 4, 2000. (ii) On or about January 10, 2001, the Company filed a Report on Form 8-K announcing the acquisition of Fleming Manufacturing Co., a privately held Missouri corporation that manufacturers mobile block pants for the production of mortarless block and pavers. (iii) On or about January 26, 2001, the Company filed a Report on Form 8-K announcing a one- for-six (1:6) reverse stock split of the Company's Common Stock effective February 5, 2001. -11- (iv) On or about February 9, 2001, the Company filed a Report on Form 8-K announcing the appointment of Samuel Gejdenson and Meyer A. Berman to the Company's Board of Directors. (v) On or about April 16, 2001, the Company filed a Report on Form 8-K announcing the acquisition of eighty-five percent (85%) of the issued and outstanding securities of Master Srl ("Master"), an Italian corporation located in Piacenza, Italy. (vi) On or about May 10, 2001, the Company's filed a Report on Form 8-K announcing that the Company will change its name to Eagle Building Technologies, Inc. (the "Company") on May 14, 2001. -12- SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EAGLE BUILDING TECHNOLOGIES, INC. August 7, 2002 By:/S/Dan Curlee ------------------------------- Dan Curlee, President and CEO CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 In connection with the accompanying quarterly Report on Form 10-QSB of Eagle Building Technologies, Inc.. for the period ended March 31, 2001, Dan Curlee, President and Chief Executive Officer, and Don Pollock, Senior Vice President of Manufacturing, Secretary, Treasurer, and Director of Eagle Building Technologies, Inc. hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that: (a) such quarterly Report on Form 10-QSB for the period ended March 31, 2001, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (b) the information contained in such quarterly Report on Form 10- QSB for the period ended March 31, 2001, fairly presents, in all material respects, the financial condition and results of operations of Eagle Building Technologies, Inc. EAGLE BUILDING TECHNOLOGIES, INC. Dated: August 7, 2002 By:/s/Dan Curlee ------------------------------------ Dan Curlee, President and CEO Dated: August 7, 2002 By:/s/Don Pollock ------------------------------------ Don Pollock, Treasurer -13-