UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From To
Commission file number: 0-50090
AMERICAN POST TENSION, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3926203
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1179 Center Point Drive, Henderson, NV 89074
(Address of principal executive offices) (Zip Code)
(702) 565-7866
(Registrant?s Telephone Number, Including Area Code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ]Accelerated filer [ ]Non-accelerated filer [ ]
Smaller reporting company [ ]
(Do not check if a smaller reporting company)
Indicate by check mark whether registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ] No [ ]
As of October 15, 2008, the registrant had 34,291,600 shares of Common
Stock $0.0001 par value) outstanding.
TABLE OF CONTENTS
Certification of Chief Executive Officer Pursuant to Section 302
Page No.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 1
ITEM 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 2
AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 2
ITEM 4. CONTROLS AND PROCEDURES 3
PART II OTHER INFORMATION 3
Item 1. Legal Proceedings 3
Item 1A. Risk Factors 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 4
Item 3. Defaults upon Senior Securities 5
Item 4. Submission of Matters to a Vote of Security Holders 5
Item 5. Other Information 5
Item 6. Exhibits 5
SIGNATURES 6
Exhibit Index 6
Certification of Principal Financial and Accounting Officer
Pursuant to Section 302
Certification of Chief Executive Officer Pursuant to Section 906
Certification of Principal Financial and Accounting Officer
Pursuant to Section 906
FORWARD-LOOKING INFORMATION
To the extent that the information presented in this Quarterly
Report on Form 10-Q for the quarter ended September 30, 2008 discusses
financial projections, information or expectations about our products,
services, or markets, or otherwise makes statements about future events
or statements regarding the intent, belief or current expectations of
American Post Tension, Inc. and its subsidiary (collectively the
?Company?), its directors or its officers with respect to, among other
things, future events and financial trends affecting the Company, such
statements are forward-looking. We are making these forward-looking
statements in reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Although we believe that the
expectations reflected in these forward-looking statements are based on
reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such
forward-looking statements. Forward-looking statements are typically
identified by the words ?believes,? ?expects,? ?anticipates,? and similar
expressions. In addition, any statements that refer to expectations or
other characterizations of future events or circumstances are forward-
looking statements. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and that matters
referred to in such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among
other things, the pace of residential construction in our geographic
markets, changes in mortgage interest rates, prices and availability of
raw materials and supplies, our ability to locate, acquire, pay for, and
integrate other businesses that complement ours, our ability to expand
our business into the commercial construction field, our ability to
attract and retain qualified personnel if and as our business grows, and
risks associated with our stock being classified as a ?penny stock.? We
undertake no obligation to publicly update or revise these forward-
looking statements because of new information, future events or
otherwise, except as required by law.
PART 1. FINANCIAL INFORMATION.
Item 1. Financial Statements.
AMERICAN POST TENSION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2008 December 31, 2007
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 383,920 $ 1,206,064
Accounts receivable, net of
allowance for doubtful accounts
of $189,346 at September 30, 2008
and $240,275 at December 31, 2007 1,852,092 1,387,163
Other receivables -- 100,498
Inventory 3,212,092 1,691,623
Prepaid expenses 34,286 105,863
Deferred tax asset 169,313 38,246
Employee advances 2,163 --
----------- ------------
Total current assets 5,653,866 4,529,457
Property and equipment, net of
accumulated depreciation of
$1,381,634 at September 30, 2008 and
$1,247,806 at December 31, 2007 885,512 1,006,439
----------- -----------
Total assets $ 6,539,378 $ 5,535,896
=========== ===========
LIABILITIES AND SHAREHOLDER EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 785,277 $ 289,361
Accrued interest -- 1,080
Shareholder loans-current portion -- 185,085
Loan payable 1,421,062 --
Line of credit 840,000 --
----------- ------------
Total current liabilities 3,046,339 475,526
Long-term liabilities -- --
------------ ------------
Total liabilities 3,046,339 475,526
Shareholder equity
Preferred stock, $0.001 par value,
1,000,000 shares authorized, no
shares issued at December 31, 2007
and September 30, 2008 -- --
Common stock, $0.001 par value,
50,000,000 shares authorized,
34,291,600 issued at December 31,
2007 and 34,366,600 issued at
September 30, 2008 3,436 3,429
Additional paid in capital 5,174,708 5,167,799
Retained earnings (1,685,105) (110,858)
------------ -------------
Total shareholder equity 3,493,039 5,060,370
----------- ------------
Total liabilities and shareholder
equity $ 6,539,378 $ 5,535,896
=========== ============
The accompanying notes are an integral part of the unaudited condensed
financial statements
AMERICAN POST TENSION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2008 and 2007
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2008 2007 2008 2007
--------- ---------- ---------- ---------
Sales $3,499,340 $4,166,195 $ 10,251,355 $12,777,236
Cost of sales 3,127,389 2,980,306 8,950,132 9,235,323
--------- ---------- ---------- ----------
Gross margin 371,951 1,185,889 1,301,223 3,541,913
Other costs and expenses
Selling, general and
administrative 925,866 1,270,564 3,005,735 3,293,304
--------- ---------- ---------- ----------
Income (loss)from operations (553,915) (84,675) (1,704,512) 248,609
Other income and expense
Merger related expenses
and costs -- -- -- (3,219,400)
Other income, net 3 56,853 3 793,219
Interest income, net (18,661) 15,429 (805) 63,973
--------- ---------- --------- ----------
Net loss before income tax $(572,573) (12,393 (1,705,314) (2,362,208)
Provision for income tax -- (4,207) (131,067) 173,410
--------- ---------- --------- ----------
Net income (loss) $(572,573) (8,186) (1,574,247) (2,287,009)
========= ========== ========= ==========
Net (loss) per share basic $ (0.00)$ (0.00) $ (0.05)$ (0.07)
Net (loss) per share-diluted$ (0.00)$ (0.00) $ (0.05)$ (0.07)
Distributions per share $ 0.00 $ 0.00 $ 0.00 $ 0.10
Weighted average common
Shares outstanding:
Basic 34,366,600 34,275,296 34,316,782 30,981,946
Diluted 34,366,600 34,275,296 34,316,782 30,981,946
The accompanying notes are an integral part of the unaudited condensed
financial statements
AMERICAN POST TENSION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Nine Months Ended September 30, 2008 and 2007
Nine Months Ended
September 30,
--------------------
2008 2007
--------- ---------
Net income (loss) $(1,574,247) $(2,287,009)
Adjustment to reconcile net income (loss) to
net cash provided by (used in) operations:
Depreciation 134,029 139,132
Shares issued in merger -- 3,142,245
Shares issued to employees and Board members -- 77,944
Shares issued for services 4,000 --
Shares issued for accrued compensation 2,916 --
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (364,431) (372,420)
Inventory (1,520,469 1,484,939
Prepaid expenses and other assets 69,414 99,478
Deferred tax asset (131,067) 150,853
Increase (decrease) in:
Accounts payable and accrued 494,836 224,092
---------- ----------
Net cash provided by (used in) operations (2,885,019) 2,659,255
Cash flows from investing activities:
Distributions of property and equipment to
shareholders -- 21,882
Acquisition (sale) of property and equipment (13,102) (146,942)
---------- ----------
Net cash provided by investing activities (13,102) (125,060)
Cash flows from financing activities:
Shareholder distributions -- (2,994,769)
Issue of shares for public shell -- 4,407
Increase (repayment)of loans payable 2,261,062 8,266
Repayment of shareholder loans (185,085) (412,690)
---------- ----------
Net cash provided by financing activities 2,075,977) (3,394,786)
---------- ----------
Net increase (decrease) in cash (822,144) (860,592)
Cash, beginning of period 1,206,064 2,937,178
---------- ----------
Cash, end of period $ 383,920 $2,076,606
Supplemental cash flow information:
Cash paid for interest $ 21,799 $ --
========= =========
AMERICAN POST TENSION, INC.
NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2008 AND 2007
Note 1: BASIS OF PRESENTATION OF INTERIM PERIOD
The accompanying unaudited financial statements of the Company at
September 30, 2008 and 2007 have been prepared in accordance with
generally accepted accounting principles (?GAAP?) for interim financial
statements, instructions to Form 10-Q, and Regulation S-X. Accordingly,
certain information and footnote disclosures normally included in
financial statements prepared in accordance with GAAP have been condensed
or omitted.
These condensed financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company?s
annual report on Form 10-K for the year ended December 31, 2007. In
management?s opinion, all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation to make
the Company?s financial statements not misleading have been included. The
results of operations for the periods ended September 30, 2008 and 2007
presented are not necessarily indicative of the results to be expected for
the full year. The December 31, 2007 balance sheet has been derived from
the Company?s audited financial statements included in the Company?s
annual report on Form 10-K for the year ended December 31, 2007.
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported revenues and expenses during the reporting periods. Actual
results could differ from those estimates.
Fair Value
In September 2006, the Financial Accounting Standards Board (the ?FASB?)
issued Statement of Financial Accounting Standards (?SFAS?) No.
157, ?Fair Value Measurement? (?SFAS 157?). This statement defines fair
value, establishes a framework for measuring fair value in GAAP, and
expands disclosure about fair value measurements. This statement is
effective for financial statements for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Earlier
application is encouraged, provided that the reporting entity has not yet
issued financial statements for that fiscal year, including financial
statements for an interim period within that fiscal year. The Company
adopted SFAS 157 on January 1, 2008. Adoption of this statement did not
have a material impact on the financial statements of the Company.
AMERICAN POST TENSION, INC.
NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2008 AND 2007
Note 1: BASIS OF PRESENTATION OF INTERIM PERIOD (continued)
Recent Pronouncements
The Company has reviewed all recently issued, but not yet effective
accounting pronouncements and does not believe the future adoption of any
such pronouncements may be expected to cause a material impact on its
financial condition or the results of its operations.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally
Accepted Accounting Principles". SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting
principles in the United States. It is effective 60 days following the SEC's
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles". The adoption of this statement is not
expected to have a material effect on the Company's financial statements.
In March 2008, the FASB issued SFAS No. 161, ?Disclosures about
Derivative Instruments and Hedging Activities? (?SFAS 161?). SFAS 161
requires companies with derivative instruments to disclose information
that should enable financial-statement users to understand how and why a
company uses derivative instruments, how derivative instruments and
related hedged items are accounted for under FASB Statement No. 133
?Accounting for Derivative Instruments and Hedging Activities? and how
derivative instruments and related hedged items affect a company?s
financial position, financial performance and cash flows. SFAS 161 is
effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008. The adoption of this statement
is not expected to have a material effect on the Company?s future
financial position or results of operations.
In December 2007, the FASB issued SFAS No. 141 (Revised 2007), ?Business
Combinations? (?SFAS 141R?). SFAS 141R will change the accounting for
business combinations. Under SFAS 141R, an acquiring entity will be
required to recognize all the assets acquired and liabilities assumed in
a transaction at the acquisition-date fair value with limited exceptions.
SFAS 141R will change the accounting treatment and disclosure for certain
specific items in a business combination. SFAS 141R applies prospectively
to business combinations for which the acquisition date is on or after
the beginning of the first annual reporting period beginning on or after
December 15, 2008. Accordingly, any business combinations we engage in
will be recorded and disclosed following existing GAAP until January 1,
2009. The Company expects SFAS 141R will have an impact on accounting for
business combinations once adopted but the effect is dependent upon
acquisitions at that time. The Company is still assessing the
AMERICAN POST TENSION, INC.
NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2008 AND 2007
Note 1: BASIS OF PRESENTATION OF INTERIM PERIOD (continued)
impact of this pronouncement.
In December 2007, the FASB issued SFAS No. 160, ?Non-controlling
Interests in Consolidated Financial Statements-An Amendment of ARB No.
51? (?SFAS 160?). SFAS 160 establishes new accounting and reporting
standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years
beginning on or after December 15, 2008. The Company believes that SFAS
160 should not have a material impact on our financial position or
results of operations.
Note 2 ACCOUNTS RECEIVABLE
Accounts receivable are summarized as follows:
September 30, December 31,
2008 2007
--------------- -----------------
Accounts receivable $ 2,041,437 $ 1,627,438
Allowance for doubtful accounts (189,346) (240,275)
-------------- -----------------
Net amount $ 1,852,092 $ 1,387,163
The Company?s top ten customers comprised 58% of sales during the three
month period ending September 30, 2008. The top ten customers comprised
58% of sales during the twelve months ended December 31, 2007.
Note 3: RELATED PARTY TRANSACTIONS
The Company leases substantially all of its office, maintenance and
warehouse facilities from entities that are owned and/or controlled by Ed
Hohman, President, and John Hohman, Chief Operating Officer, who are the
Company?s principal shareholders. Rents were paid or accrued in favor of
the shareholders in the amount of $62,040 during the three months
ended September 30, 2008 and $247,480 during the twelve months ended
December 31, 2007.
Note 4: SHAREHOLDER LOANS AND LONG TERM DEBT
At March 31, 2008 and December 31, 2007 the Company had loans due to
its shareholders aggregating $46,676 and $185,085, respectively. The
loans were paid in full on April 7, 2008. Additionally the Company had
notes payable for vehicle purchases that were paid in full as of December
31, 2007.
AMERICAN POST TENSION, INC.
NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2008 AND 2007
Note 4: SHAREHOLDER LOANS AND LONG TERM DEBT (continued)
During the quarter ended September 30, 2008, the Company entered into a
line of credit agreement with the Bank of Nevada in the total amount of
$1,700,000, which was guaranteed by our principal officers, Edward Hohman
and John Hohman. This line of credit carries an interest rate of 6%
percent on outstanding balances. The Company has used $840,000 of this
line of credit during the quarter.
Note 5: INCOME TAXES
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, ?Accounting for Income Taxes (?SFAS
No.109?). SFAS No.109 requires the recognition of deferred tax assets and
liabilities for both the expected impact of differences between the
financial statements and tax basis of assets and liabilities, and for the
expected future tax benefit to be derived from tax loss and tax credit
carry-forwards. SFAS No. 109 additionally requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred
tax assets.
As of September 30, 2008, the Company has net operating losses for Federal
income tax purposes totaling approximately $1,685,000. The tax benefit of
the loss carry-forward at the statutory federal rate of 34 percent totals
approximately $573, 000. The Company has recorded a valuation allowance
of approximately $404,000 against the deferred tax asset as realization of
the entire tax benefit is unlikely. There was no change in the net
deferred tax asset during the quarter ended September 30, 2008.
Note 6: EQUITY
During the quarter ended September 30, 2008, the Company issued a total of
75,000 shares, resulting in total outstanding shares as of September 30,
2008 of 34,366,600. A total of 25,000 shares were issued to our
independent director as the annual director compensation of 25,000 shares.
These shares were issued as of July 1, 2008 at an issue price of $0.1166
per share, at a discount to the then market closing price of $0.14 per
share to reflect the restricted nature of the shares. An additional
50,000 shares were issued to CF Consulting, LLC as part of the consulting
agreement under which it provides principal financial officer services to
the Company. The shares were valued by agreement at $4,000, or $0.08 per
share. At the time of issue, the closing price of the shares was $0.10
per share and the bid price was $0.08.
Note 7. INVENTORY
During the quarter ended September 30, 2008, the Company ordered raw
material (wire strand) from a regular supplier, who was unable to meet the
AMERICAN POST TENSION, INC.
NOTES TO THE UNAUDITED
CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2008 AND 2007
Note 7. INVENTORY (continued)
order. As a result, the Company placed the order with another supplier.
Unexpectedly, the first supplier later obtained the supply and delivered
it to the Company with no prior notice, despite the order cancellation.
On advising the supplier to pick up the materials, the supplier instead
suggested that the Company retain the supply, and pay for it only when the
material was used. The supplier accordingly cancelled the related invoice.
The Company has placed the wire strand in inventory, but the related
charge has been entered as a ?loan payable?, without interest rather than
as an account payable. The amount of this ?loan payable? at September 30,
2008 was $1,421,062. The loan amount will be transferred to accounts
payable as and when the material is used, and will be paid for
accordingly.
ITEM 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
Three and Nine Months Ended September 30, 2008 as compared to Three
and Nine Months Ended September 30, 2007 Results of Operations
The following table sets forth, for the periods indicated, certain
information related to our operations, expressed in dollars and as a
percentage of our net sales:
Three Months Ended September 30, 2008:
Net sales
Net sales totaled $3,499,340 for the three months ended September 30, 2008,
as compared to $4,166,195 for the same period in 2007, or a decrease of 16%.
Home Builders Research reported that new home sales are down 45.4 percent in
Las Vegas and the year to date 2008 metro Phoenix housing market continues at
a pace 49% below that of last year and permit activity is down 64%. Our
revenue is derived from new construction of residential housing and is
directly related to new home sales and permits for new residential
construction. The decreased activity of new residential home construction has
been pronounced in Las Vegas, Nevada and Phoenix, Arizona has resulted in
reduced sales level and gross margin.
Cost of sales
Cost of sales, including all installation expenses, during the three months
ended September 30, 2008 was 89.4% of net sales, as compared to 72.3% in
2007.
We are anticipating competition to increase and downward
pressure on our gross margin during the next year as current and potential
competitors seek new revenue streams.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months ended
September 30, 2008 were $925,866 or 26.5% of net sales as compared to
$1,282,564 or 30.8% of net sales during the same period of the prior year.
Selling, general and administrative expenses decreased by $356,698 for the
three month period ending September 30, 2008 versus the three month
period ending September 30, 2007. Our Chief Executive Officer and Chief
Operating Officer, who together own approximately 75% of the outstanding
shares of common stock, have salaries of $500,000 per year, which they
have voluntarily reduced to $250,000 in the quarter ended September 30,
2008.
Provision for income taxes
The Company recorded no provision for income taxes for the three months
ended September 30, 2008, because of concerns regarding the potential
realization of The benefits of the tax loss.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to certain market risks primarily related to
changes in interest rates. The Company does not undertake any specific
actions to limit these exposures at this time.
ITEM 4. CONTROLS AND PROCEDURES
a) Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934 (the ?Exchange Act?)). Disclosure
controls and procedures are the controls and other procedures that we
designed to ensure that we record, process, summarize and report in a
timely manner the information we must disclose in reports that we file
with or submit to the Securities and Exchange Commission under the
Exchange Act. Based on this evaluation, our Chief Executive Officer and
our Chief Financial Officer concluded that our disclosure controls and
procedures were effective as of the end of the period covered
by this report.
Disclosure controls and procedures are controls and procedures that are
designed to ensure that information required to be disclosed in our
reports filed or submitted under the Securities Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commission?s rules and forms. Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
our reports filed under the Exchange Act is accumulated and communicated
to management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding
required disclosure.
(b) Changes in Internal Control over Financial Reporting.
During the quarter ended September 30, 2008, there was no change in our
internal control over financial reporting (as such term is defined in
Rule 13a-15(f) under the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, our internal control over
financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
We have been involved in various legal and governmental proceedings
incidental to our continuing business operations. As of September 30, 2008
there were no continuing legal suits or any known pending litigation
related to claimed construction defects as a result of services and
products provide to our customers.
On October 26, 2007, the District Council of Iron Workers of the State
of California and Vicinity (?Ironworkers?) filed a charge with the
National Labor Relations Board alleging that Post Tension of Nevada, Inc.
engaged in unfair labor practices in its Phoenix operations. The General
Counsel of the Board issued a complaint and notice of hearing based on
this charge alleging that Post Tension committed certain unfair labor
practices and that the employees had engaged in an unfair labor practice
strike. A hearing on this matter has been held and briefs to the
Administrative Law Judge were filed on April 1, 2008. The
primary issue is whether a strike by employees was an ?unfair labor
practice? strike or an ?economic? strike. Striking employees have made an
offer to return to work and several have returned to work and others will
be returned when work is available. If the strike is an unfair labor
practice strike there is approximately $30,000 in back wages due.
Ten of the striking employees and foremen have also filed charges with
the EEOC in Cases Nos. 540-2008-01783 through 540-2008-01793 alleging
that they have been discriminated against based on their national origin.
A position statement has been filed on behalf of the Company.
There are no legal disputes involving a labor organization at Post
Tension?s Henderson location. Laborers? Local 702 has been recognized as
the representative of the field and shop employees at the Henderson
location and PTNV and Local 702 are engaged in bargaining for a collective
bargaining contract. There are no charges pending before any
administrative agency concerning this bargaining relationship.
The Company is also participating in an on-going arbitration dispute with
its former Chief Financial Officer, who resigned from the Company in
March, 2008, as provide in the contract under which he was employed. The
Company also has filed a separate legal proceeding seeking damages from the
former CFO in a state court in Las Vegas. Neither the arbitration nor
the legal proceeding is expected to have a material effect on our
financial results.
ITEM 1A. Risk Factors
Investing in our common stock involves a high degree of risk. Certain of
the risks related to an investment in our common stock were disclosed in
an amended Current Report on form 8-K, which we filed with the SEC on
June 28, 2007. The portion of that amended Current Report under the
Caption ?Risk Factors? is hereby incorporated into this report by this
reference. You should carefully consider those risk factors, as well as
the following additional risk factors and other information in this
report, before deciding whether to invest in shares of our common stock.
The decreased activity of new residential home construction has been
pronounced in Las Vegas, Nevada and Phoenix, Arizona and has resulted in
significantly reduced sales and gross margin. Our revenue is derived
primarily from new construction of residential housing and is directly
related to new home sales and permits for new residential construction.
The recent downturn in residential construction in Las Vegas, Nevada and
Phoenix, Arizona has resulted in a significant reduction in our revenues
for the three-month period ended September 30, 2008. We cannot predict
whether or when residential construction activity will rebound in those
markets. Prolonged sluggishness in residential construction, however, can
be expected to continue to have a negative impact on our revenues and
earnings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The Company issued 25,000 shares of common stock to an outside director
during the quarter ended September 30, 2008, in accordance with the regular
compensation arrangement for its independent directors. The shares were
issued for the equivalent of $0.117 per share, or a total of $2,916 in
accrued director compensation.
Also during the quarter ended September 30, 2008, the Company issued
50,000 common shares to CF Consulting, LLC, in accordance with the
consulting agreement under which CF Consulting LLC provides principal
financial officer and corporate counsel consulting services to the
Company. The shares were issued for total consideration of $4,000, as
provided in the consulting agreement.
As a result of these issues, the total number of shares of common stock
outstanding increased from 34,291,600 at June 30, 2008 to 34,366,600 at
September 30, 2008.
Item 3. Defaults upon Senior Securities
There were no defaults upon senior securities during the three month
period ended September 30, 2008.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act.
31.2 Certification of Principal Financial and Accounting Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act.
32.2 Certification of Principal Financial and Accounting Officer Pursuant
to Section 906 of the Sarbanes-Oxley Act.
SIGNATURES:
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
November 19, 2008
American Post Tension, Inc.
(Registrant)
By: /s/ Edward Hohman
------------------------------
Edward Hohman
President and Chief Executive
Officer (Principal Executive
Officer) and
By: /s/ Robert Hipple
------------------------------
Robert Hipple
(Principal Financial Officer)
Exhibit Index
Exhibit No. Description
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act.
31.2. Certification of Principal Financial and Accounting Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act.
32.2 Certification of Principal Financial and Accounting Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act.