SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A-1
(Mark One)
|XX| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999 or
| | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ____________________
Commission File Number: 0-29182
FIDELITY HOLDINGS, INC.
-----------------------
(Exact name of small business issuer as specified in its charter)
Nevada 11-3292094
---------------------------- -------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
80-02 Kew Gardens Road, Suite 5000
Kew Gardens, New York 11415
---------------------------
(Address of principal executive offices)
(718) 520-6500
--------------
Issuer's telephone number
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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes |X| No |_|
<PAGE>
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: The number of shares of the
registrant's common stock outstanding as of August 13, 1999 was 13,670,174.
<PAGE>
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements
FIDELITY HOLDINGS, INC AND SUBSIDIARIES CONSOLIDATED FINANCIAL
STATEMENTS, June 30, 1999 (UNAUDITED)
<PAGE>
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
REVISED REVISED
JUNE 30, DECEMBER 31,
1999 1998
ASSETS: Unaudited Audited
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 6,176,005 $ 977,134
Net investment in direct financing leases, current 2,082,564 2,168,952
Accounts receivable 13,020,082 7,118,717
Inventories 19,972,768 19,061,666
Other current assets 2,410,800 1,510,545
------------ ------------
Total current assets 43,662,219 30,837,014
Net investment in direct financing leases,
net of current portion 687,935 785,023
Property and equipment, net 5,787,154 5,352,406
Excess of costs over net assets acquired 12,112,725 10,614,963
Notes receivable - officer 168,400 799,819
Other assets 2,624,486 2,159,198
------------ ------------
Total assets $ 65,042,919 $ 50,548,423
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Notes payable - floor plan $ 21,325,317 $ 17,791,253
Notes payable - bank -- 450,000
Convertible debentures payable -- 600,000
Accounts payable 4,728,152 2,584,189
Accrued expenses 3,306,351 2,809,714
Current maturities of long-term debt 763,329 869,813
Customer deposits 1,276,816 732,014
------------ ------------
Total current liabilities 31,399,965 25,836,983
Long-term debt, less current maturities 7,682,280 7,953,278
Due to employees 99,851 249,851
Due to officer 1,018,581 54,795
------------ ------------
Total liabilities 40,200,677 34,094,907
------------ ------------
Commitments
Stockholders' equity
Preferred stock, $.01 par value;
2,000,000 shares authorized, 900,000 and
1,150,000 shares issued and outstanding 9,000 11,500
in 1999 and 1998
Common stock, $.01 par value
50,000,000 shares authorized, 14,446,093
and 12,054,771 shares issued and
outstanding in 1999 and 1998 144,461 120,548
Additional paid in capital 23,096,925 14,759,617
Cumulative translation adjustment (3,882) (4,977)
Retained earnings 1,726,929 1,566,828
Treasury stock, at cost; 46,854 shares
and 0 shares in 1999 and 1998, respectively (131,191) --
------------ ------------
Total stockholders' equity 24,842,242 16,453,516
------------ ------------
Total liabilities and stockholders' equity $ 65,042,919 $ 50,548,423
============ ============
</TABLE>
<PAGE>
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
<TABLE>
<CAPTION>
REVISED REVISED
SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Automotive division $100,273,073 $ 26,487,239 $ 54,430,414 $ 26,322,087
Computer products and telecommunications
equipment 811,352 573,233 336,086 242,105
------------ ------------ ------------ ------------
Total revenues $101,084,425 $ 27,060,472 $ 54,766,500 $ 26,564,192
------------ ------------ ------------ ------------
Operating expenses:
Cost of sales - automotive division 85,166,266 23,026,967 46,373,321 23,026,967
Cost of sales - computer products and
telecommunications equipment 664,999 304,180 305,280 187,482
Selling general and administrative
expense 13,853,171 2,740,861 7,437,881 2,295,830
Interest expense 877,888 336,152 433,605 312,029
------------ ------------ ------------ ------------
Operating income before income
tax expense 522,101 652,312 216,413 741,884
Income tax expense 362,000 190,000 172,000 211,000
------------ ------------ ------------ ------------
Net income $ 160,101 $ 462,312 $ 44,413 $ 530,884
============ ============ ============ ============
Per common share:
Basic $ 0.01 $ 0.04 $ -- $ 0.05
Diluted 0.01 0.03 -- 0.04
Average number of shares used in computation:
Basic 12,934,268 10,567,682 13,124,465 10,789,350
Diluted 16,133,143 14,017,682 16,378,036 14,239,350
</TABLE>
<PAGE>
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
REVISED
SIX MONTHS
ENDED JUNE 30, 1999
-------------------
<S> <C>
Cash flows from operating activities:
Net income (loss) $ 160,101
Adjustments to reconcile net income
to net cash (used in) provided by operating activities:
Amortization of intangible assets 293,645
Depreciation 286,159
Deferred income taxes --
Noncash item-stock-based compensation 392,284
(Increase) decrease in assets:
Net investment in direct financing leases 183,476
Notes receivable --
Accounts receivable (5,901,365)
Inventories (911,102)
Other assets (749,074)
Increase (decrease) in liabilities:
Accounts payable 2,143,963
Accrued expenses 670,215
Floor plan notes payable 3,534,064
Deferred revenue --
Customer deposits 544,802
-----------
Net cash provided by (used in)
operating activities 647,168
-----------
Cash flows used in investing activities:
Additions to property and equipment, (720,907)
-----------
Net cash used in investing activities (720,907)
-----------
Cash flows from financing activities:
Repurchase of common stock (131,191)
Line of credit (450,000)
Net proceeds from stock issuance 5,765,999
Payments of long-term debt (325,793)
Proceeds from convertible debentures 2,750,000
Payment of convertible debentures (2,337,500)
-----------
Net cash provided by (used in)
financing activities 5,271,515
-----------
Effect of exchange rates on cash 1,095
-----------
Net increase (decrease) in cash and cash equivalents 5,198,871
Cash and cash equivalents, beginning of period 977,134
-----------
Cash and cash equivalents, end of period $ 6,176,005
===========
Supplemental Disclosures Of Cash Flow Information:
Cash paid during the period for:
Interest $ 877,888
Income taxes $ 781,500
</TABLE>
<PAGE>
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Unaudited
<TABLE>
<CAPTION>
Preferred Stock Common Stock
---------------------------- --------------------------- Additional
Paid in
Shares Amount Shares Amount Capital
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance
January 1, 1998 250,000 $ 2,500 6,895,700 $ 68,957 $ 5,414,293
Issuance of preferred
Stock for acquisition of
Major Automotive Group 900,000 9,000 -- -- 5,991,000
Issuance of common stock
for services and equipment -- -- 1,140,814 11,408 3,394,507
Net income -- -- -- -- --
Translation adjustment -- -- -- -- --
Balance ------------ ------------ ------------ ------------ ------------
December 31, 1998 1,150,000 11,500 8,036,514 80,365 14,799,800
Adjustment for 3 for 2
common stock dividend -- -- 4,018,257 40,183 (40,183)
Issuance of common stock
for services and deposits -- -- 653,414 6,534 1,535,466
Conversion of 1996
PFD. Stock (250,000) (2,500) 985,222 9,852 (7,352)
Proceeds from issuance
of common stock pursuant
to private placement, net -- -- 285,714 2,857 5,763,142
Convertible debentures
exchanged for common stock -- -- 466,972 4,670 1,046,052
Net income -- -- -- -- --
Translation adjustment -- -- -- -- --
Repurchase of common
stock -- -- -- -- --
Balance ------------ ------------ ------------ ------------ ------------
June 30, 1999 900,000 $ 9,000 14,446,093 $ 144,461 $ 23,096,925
============ ============ ============ ============ ============
<CAPTION>
Retained Currency Treasury Stock Total
Earnings Translation at cost Stockholders'
(Deficit) Adjustment Shares Amount Equity
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance
January 1, 1998 $ 1,038,688 $ 297 -- $ -- $ 6,524,735
Issuance of preferred
Stock for acquisition of
Major Automotive Group -- -- 6,000,000
Issuance of common stock
for services and equipment -- -- 3,405,915
Net income 528,140 -- 528,140
Translation adjustment -- (5,274) (5,274)
Balance ------------ ------------ ------------ ------------ ------------
December 31, 1998 1,566,828 (4,977) -- -- 16,453,516
Adjustment for 3 for 2
common stock dividend -- -- -- -- --
Issuance of common stock
for services and deposits -- -- -- -- 1,542,000
Conversion of 1996
PFD. Stock -- -- -- -- --
Proceeds from issuance
of common stock pursuant
to private placement, net -- -- -- -- 5,765,999
Convertible debentures
exchanged for common stock -- -- -- -- 1,050,722
Net income 160,101 -- -- -- 160,101
Translation adjustment -- 1,095 -- -- 1,095
Repurchase of common
stock -- -- 46,854 (131,191) (131,191)
Balance ------------ ------------ ------------ ------------ ------------
June 30, 1999 $ 1,726,929 $ (3,882) 46,854 $ (131,191) $ 24,842,242
============ ============ ============ ============ ============
</TABLE>
<PAGE>
FIDELITY HOLDINGS INC, AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
JUNE 30, 1999
1. Basis of Presentation
In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to fairly present the Company's financial position and
its results of operations and cash flows as of the dates and for the periods
indicated.
Certain information and footnote disclosures normally contained in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. These condensed consolidated financial statements should be
read in conjunction with the audited December 31, 1998 consolidated financial
statements and related notes included in the Company's 10-KSB. The results of
operations for the six months and three months are not necessarily indicative of
the operating results for the full year.
Amounts for the six months and three months ended June 30, 1998 have been
reclassified to conform with the June 30, 1999 presentation.
2. Common Stock Dividend
On June 1, 1999, the Company paid a 3-for-2 common stock dividend. Common shares
and earnings per share computations for prior periods have been restated to
reflect the stock dividend.
<PAGE>
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following management's discussion and analysis of financial condition
and results of operations has been amended to reflect management's decision to
continue the development of the Company's non-automotive operations which had
previously been classified in its financial statements as discontinued
operations for financial reporting purposes. See Item 5.
The following discussion of the operations, financial condition, liquidity
and capital resources of Fidelity Holdings, Inc. and its subsidiaries (the
"Company") should be read in conjunction with the Company's unaudited
Consolidated Financial Statements and related notes thereto included elsewhere
herein.
This discussion contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ significantly from the results discussed in the
forward-looking statements.
The Company
On May 14, 1998, the Company, a holding company, involved in the
acquisition and development of synergistic technological and telecommunications
businesses and the regional consolidation of the retail automotive industry,
acquired, from a related party, the Major Automotive Group of dealerships
("Major Auto") and related real estate. The Company operate in two divisions:
Automotive and Computer Products and Telecommunications. The Automotive Division
consists of retail automotive dealerships, the Company's subsidiary Major Fleet
and Leasing, Inc. ("Major Fleet") and any related entities. The Computer
Products and Telecommunications Division is comprised of all non-automotive
operations including the Company's subsidiaries Computer Business Sciences,
Inc., and IG2, Inc.
In conformity with generally accepted accounting principles, the
consolidated results of operations of the Company include the results from Major
Auto only since the date of acquisition on May 14, 1998. Accordingly, while the
results of operations for the three and six month periods ended June 30, 1999
include the results for Major Auto, there are no comparable results for the
corresponding three and six month periods in 1998.
Results of Operations - Six-Month Periods Ended June 30, 1999 and June 30, 1998
Revenues. Revenues for the six-month period ended June 30, 1999 increased
to approximately $101.1 million or $ 74.0 million over the prior comparable
period's revenue of $27.1 million. Such increase was almost solely attributable
to the revenues of Major Auto, which were $99.9 million for the 1999 period as
compared with Major Auto's revenues of $26.1 million in the period May 14, 1998
to June 30, 1998. A comparison of the average monthly revenue for Major Auto for
the seven and one-half month period it was owned by the Company in 1998 with the
average monthly revenue generated by Major Auto during the first six months of
1999 shows an approximate 28% increase in 1999. Management believes that this
increase in average monthly sales is primarily attributable to Major Auto's
successful efforts in selling used vehicles at its expansive facility in Long
Island City, New York. Average monthly used car sales revenues increased almost
40% in the 1999 period as more than 400 used cars were sold during each of the
months in the 1999
<PAGE>
period with more than 500 sold in June 1999. Major Auto's initiatives included
extensive Internet promotions, local advertising in all media and the branding
of its used car operation as "Major World." Additionally, the relatively mild
winter in the New York Metropolitan area contributed to increased sales during
these months when automotive sales, traditionally, decrease. The results of this
period are not necessarily indicative of the results for any future period or
the full year of 1999.
Cost of Sales. The cost of sales of $85.2 million attributable to Major
Auto's operations for the six months ended June 30, 1999 is the significant
component of the total cost of sales of $85.8 million for the period. In the
comparable prior period, Major Auto's cost of sales aggregated $23.0 million
from its acquisition on May 14, 1998 to June 30,1998.
Gross profit. Of the total gross profit of $15.2 million for the six
months ended June 30, 1999, Major Auto generated almost $14.9 million. Gross
profit as a percentage of sales for Major Auto during the 1999 period was 14.6%.
Although there was no comparable amount for the first quarter of 1998, the gross
profit percentage for Major Auto was 11.8% in the period May 14, 1998 to June
30, 1998 and 13.8% for the seven and one-half month period May 14, 1998 to
December 31, 1998. Management believes that the increase in gross profit
percentage is primarily attributable to the increased volume of used vehicle
sales as a percentage of total sales during the first six months of 1999, as
compared with each of the 1998 periods.
Selling, general and administrative ("S G & A") expense. In the six months
ended June 30, 1999, S G & A expenses increased approximately $11.1 million to
$13.8 million from $2.7 million. Substantially all of this increase resulted
from the acquisition of Major Auto. S G & A expenses attributable to Major Auto
increased approximately $9.4 million to an aggregate of $11.2 million in the
first half of l999 from $1.8 million for the period May 14, 1998 to June 30,
1998. S G & A expenses of the Computer Products and Telecommunications division
increased almost $1 million in 1999 from the prior comparable period. This
increase was substantially attributable to the IG2, Inc. development activities.
Interest expense. Interest expense had a net increase of $542,000 to
$878,000 in the first six months of 1999 from interest expense of $336,000
incurred in the comparable prior period. This is primarily related to the floor
plan interest of $386,000 and interest incurred in financing the acquisition of
Major Auto amounting to $374,000 and, to a lesser extent, $118,000 of net
interest primarily accrued on redeemed and converted debentures.
Results of Operations - Three-Month Periods Ended June 30, 1999 and June 30,
1998
Revenues. Revenues for the three-month period ended June 30, 1999
increased approximately $28.2 million over the prior comparable period to $54.8
million. Such increase was almost solely attributable to the revenues of Major
Auto, which were $54.2 million for the 1999 quarter as compared with the Major
Auto's revenues of $26.1 million in the period May 14, 1998 to June 30, 1998.
Cost of Sales. The cost of sales of $46.2 million attributable to Major
Auto's operations for the three months ended June 30, 1999, is the significant
component of the total cost of sales of $46.7
<PAGE>
million for the period. In the comparable prior period, Major Auto's cost of
sales aggregated $23.0 million from its acquisition on May 14, 1998 to June 30,
1998.
Gross profit. Of the total gross profit of $8.1 million for the three
months ended June 30, 1999, Major Auto generated almost $8.0 million. Gross
profit as a percentage of sales for Major Auto during the 1999 period was 14.6%.
Although there was no comparable amount for the second quarter of 1998, the
gross profit percentage for Major Auto was 11.8% in the period May 14, 1998 to
June 30, 1998. Management believes that the increase in gross profit percentage
is primarily attributable to the increased volume of used vehicle sales as a
percentage of total sales during the 1999 period as compared with each of the
1998 period.
S G & A expense. In the three months ended June 30, 1999, S G & A expenses
increased approximately $ 5.1 million to almost $7.4 million, from $2.3 million.
Almost all of this increase resulted from the acquisition of Major Auto. S G & A
expenses attributable to Major Auto aggregated $6.1 million in the second
quarter of 1999 as compared to $1.8 million for the period May 14, 1998 to June
30, 1998.
Interest expense. Interest expense had a net increase of $122,000 to
$434,000 in the second quarter of 1999 from interest expense of $312,000
incurred in the comparable prior period. This is primarily related to the
$106,000 increase incurred by Major Auto in its floor planning and acquisition
financing.
Assets, Liquidity and Capital Resources-June 30, 1999
At June 30, 1999, total assets of the Company were $65.0 million, an
increase of approximately $14.5 million from December 31, 1998. This increase is
primarily related to the increase in Major Auto's accounts receivable of
approximately $5.8 million, the increase in Major Auto's inventories of almost
$1.0 million and a net increase in cash of approximately $5.2 million. The
increase in accounts receivable and inventories is directly related to Major
Auto's increased sales levels during the first half of 1999. The increase in
cash is primarily attributable to the net proceeds from the private placement of
the Company's common stock in June 1999. The net proceeds, after cash
expenditures for fees, expenses and redemption of debentures, amounted to
approximately $3.5 million. Additionally, Major Auto's cash increased to almost
$2.0 million at June 30, 1999 compared with approximately $750,000 at December
31, 1998.
The net increase in the Company's cash of $5,198,871 for the six months
ended June 30, 1999 was primarily attributable to $5,271,515 generated through
its financing activities. This was the net effect of the net proceeds of
$5,765,999 from a private placement of the Company's common stock in June 1999
and proceeds from the sale of $2,750,000 in 12% convertible debentures as offset
by repayment of $2,337,500 of the debentures, payments of an aggregate of
$775,793 of long-term and short-term debt and the purchase of treasury stock for
$131,191.
The Company believes that the cash generated from existing operations,
together with existing cash, available credit from its current lenders,
including banks and floor planning, will be sufficient to finance its current
operations, planned expansion and internal growth for at least the next
twenty-four months.
<PAGE>
On May 3, 1999 the Company announced the declaration of a stock dividend
payable as one share of common stock for each two held. The dividend was paid on
June 1, 1999 to shareholders of record as of May 18, 1999.
Year 2000 Issue
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates are processed. In addition, similar problems may arise in
some systems that use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failures, which
could affect an entity's ability to conduct normal business operations.
The Company recognizes the need to ensure its operations will not be
adversely impacted by the inability of the Company's systems to process data
having dates that could be affected by the Year 2000 issue. The Company is
currently addressing the risk with respect to the availability and integrity of
its financial systems and operating systems. While the Company believes its
planning efforts are adequate to address the Year 2000 concerns, there can be no
assurance that the systems of other companies, including suppliers, customers
and others on which the Company's operations rely are, or will be made,
compliant on a timely basis and will not have a material effect on the Company.
However, all such significant systems are being evaluated for compliance. The
cost of the Company's Year 2000 compliance effort is not expected to be material
to the Company's results of operations or financial position.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not engaged in any litigation other than as previously
reported.
Item 2. Changes in Securities
1. On June 24, 1999, Company entered into an agreement with three
investors, pursuant to which the Company will have the right or obligation to
sell, under certain circumstances, in a series of private placement
transactions, up to $20.0 million of the Company's common stock (the "Common
Stock") and warrants in three tranches. Pursuant to a Securities Purchase
Agreement (the "Agreement"), the first tranche closed on June 24, 1999 and the
Company sold an aggregate of 285,714 shares of common stock for an aggregate of
$6,000,000 or $21 per share.
Under the terms of the Agreement and the adjustable warrant issued in
connection with the Agreement, the purchasers will be entitled to acquire
additional shares exercisable at $.01 per share, pursuant to a "reset" formula
which takes into account the market price of the Common Stock at future dates,
commencing 40 trading days after the date on which the purchasers may resell the
shares pursuant to a registration statement (the "Effectiveness Date"). The
Company filed its Registration Statement on Form S-3 on August 2, 1999 (the
"Registration Statement"). There are three reset periods for the adjustable
warrant issued in connection with each tranche, covering 34%, 33% and 33%,
respectively of the number of shares issued on the applicable tranche closing
date. The first reset period is 40 trading days after the effective date of the
Registration Statement. The second reset period is the 40 trading days beginning
after the end of the first reset period. The third reset period is 40 trading
days beginning after the end of the second reset period. The number of shares to
be issued during each reset period is calculated by (a) multiplying the number
of shares subject to price adjustment by (b) an amount equal to 115% of the
applicable tranche purchase price less the reset price and dividing the result
by the reset price. For each reset period, the reset price is the average of the
lowest ten trading days' closing bid prices during the preceding 40 trading-day
period. In the event that the reset price for any reset period is less than
$14.00 per share (the "Floor Price") the adjustable warrant will vest with
respect to shares up to the floor price (the "Initial Shares") and with respect
to shares whose vesting would exceed the number of Initial Shares, the Company
will have the option of paying cash in lieu of issuing such Initial Shares at
the amount equal to the difference between the reset price and $14.00. The
adjustable warrants will cease to vest in the event that, after the
Effectiveness Date, the average market price of the Common Stock exceeds $31.50
over a specified period and under certain conditions.
In addition, the Company issued warrants to the purchasers enabling them
to purchase up to an aggregate of 285,714 shares of common stock at a purchase
price of $23 per share, exercisable for a five-year period.
The Company has agreed to pay certain expenses of the purchasers and an
advisor to the purchasers incurred in connection with the private placement, not
to exceed $65,000. A finder's fee of up to 5% of the purchase price, payable 2%
in cash and 3% in Common Stock, of which at least $84,000 is payable in cash, is
being paid to International Securities Corporation in connection with the
transaction. The sale was effected
<PAGE>
to the purchasers in reliance upon exemptions provided under Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D and Rule 506 promulgated
thereunder.
2. In April, 1999 the Company issued 985,225 shares of Common Stock to
Harold and Bruce Bendell in exchange for their 250,000 shares of 1996 Major
Series of Convertible Preferred Stock.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Reclassification of Financial Statements
On February 7, 2000, the Company announced that its Board of Directors had
determined to continue the development of the Company's non-automotive
operations which had previously been classified in its financial statements as
discontinued operations for financial reporting purposes. Pursuant to Emerging
Issues Task Force ("EITF") 90-16: Accounting for Discontinued Operations
Subsequently Retained, the Company is filing this amendment to its Form 10-QSB
for the fiscal quarter ended June 30, 1999 to reflect the reclassification of
its financial statements in connection with its decision to continue the
Company's non-automotive operations.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27. Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIDELITY HOLDINGS, INC.
Date: February 25, 2000 /s/ Doron Cohen
------------------------------
Doron Cohen, President & CEO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS AND
RELATED FOOTNOTES OF FIDELITY HOLDINGS, INC. AND SUBSIDIARIES AS OF AND FOR THE
NINE MONTHS AND THREE MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND FOOTNOTES.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-END> JUN-30-1999 JUN-30-1999
<CASH> 6,176,005 6,176,005
<SECURITIES> 0 0
<RECEIVABLES> 13,020,082 13,020,082
<ALLOWANCES> 0 0
<INVENTORY> 19,972,768 19,972,768
<CURRENT-ASSETS> 43,662,219 43,662,219
<PP&E> 6,136,982 6,136,982
<DEPRECIATION> (349,828) (349,828)
<TOTAL-ASSETS> 65,042,919 65,042,919
<CURRENT-LIABILITIES> 31,399,965 31,399,965
<BONDS> 0 0
0 0
9,000 9,000
<COMMON> 144,461 144,461
<OTHER-SE> 24,688,781 24,688,781
<TOTAL-LIABILITY-AND-EQUITY> 65,042,919 65,042,919
<SALES> 101,084,425 54,766,500
<TOTAL-REVENUES> 101,084,425 54,766,500
<CGS> 85,831,265 46,678,601
<TOTAL-COSTS> 13,853,171 7,437,881
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 877,888 433,605
<INCOME-PRETAX> 522,101 216,413
<INCOME-TAX> 362,000 172,000
<INCOME-CONTINUING> 160,101 44,413
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 160,101 44,413
<EPS-BASIC> .01 .00
<EPS-DILUTED> .01 .00
</TABLE>
