<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-25803
AMERICA'S SENIOR FINANCIAL SERVICES, INC.
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(Exact name of small business issuer as specified in its charter)
Florida 65-0181535
---------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9501 N.E. 2nd Avenue
Miami Shores, FL 33138
----------------------------------------
(Address of principal executive offices)
(305) 751-3232
----------------------------------------------------
(Registrant's telephone number, including area code)
15544 N.W 77th Court
Miami Lakes, Fl. 33016
(305) 828-2599
----------------------------------------------------
(Former Address and telephone number)
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 [ ]
Number of shares outstanding of each of the issuer's classes of common equity:
As of September 30, 2000, the Company had a total of 9,664,391 shares
of Common Stock, par value $.001 per share (the "Common Stock"), outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
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AMERICA'S SENIOR FINANCIAL SERVICES, INC.
FORM 10-QSB
QUARTER ENDED SEPTEMBER 30, 2000
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I
Item 1. Financial Statements............................................................3-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................................10-11
PART II
Item 1. Legal Proceedings................................................................12
Item 5. Other Information................................................................12
Item 6. Exhibits and Reports on Form 8-K.................................................12
SIGNATURES...............................................................................13
</TABLE>
2
<PAGE> 3
AMERICA'S SENIOR FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
30-Sep-00 31-Dec-99
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 54,752 $ 402,373
Brokerage fees receivable 182,522 214,604
Employee advances 170,697 175,714
Mortgage loans held for sale 2,709,302 2,389,162
Due from shareholder -- 20,734
Prepaid expenses 151,030 56,851
Other current assets -- 72,302
------------ ------------
TOTAL CURRENT ASSETS 3,268,303 3,331,740
------------ ------------
PROPERTY AND EQUIPMENT, net 387,746 442,897
------------ ------------
OTHER ASSETS
Goodwill, net 4,903,425 5,096,841
Due from related parties 112,000 112,000
Notes receivable 250,000 250,000
Other assets 83,759 561,536
------------ ------------
TOTAL OTHER ASSETS 5,349,184 6,020,377
------------ ------------
TOTAL $ 9,005,233 $ 9,795,014
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital $ 17,488l $ 24,934
Lines of credit 473,104 366,298
Warehouse lines of credit 2,683,594 2,639,192
Accounts payable 641,527 394,752
Accrued liabilities 262,327 418,634
Other current liabilities -- 29,291
------------ ------------
TOTAL CURRENT LIABILITIES 4,078,040 3,873,101
CAPITAL LEASE OBLIGATIONS, less current 49,822 56,834
------------ ------------
LONG-TERM DEBT, convertible debentures 1,153,045 1,750,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 10,000,000 shares
authorized, zero shares issued and outstanding -- --
Common stock, $0.001 par value; 25,000,000 shares
authorized, shares issued and outstanding, 9,664,391
at September 30, 2000 and 7,690,262 at December 31, 1999 11,424 7,690
Additional paid-in capital 13,180,760 12,498,553
Retained earnings (deficit) (9,362,693) (8,219,283)
Unearned compensation - restricted stock (105,165) (171,881)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 3,724,326 4,115,079
------------ ------------
TOTAL $ 9,005,233 $ 9,795,014
============ ============
</TABLE>
See notes to financial statements.
3
<PAGE> 4
AMERICA'S SENIOR FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------------- -------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $ 1,516,140 $ 1,013,321 $ 4,922,941 $ 2,984,009
EXPENSES:
Payroll and related expenses 1,130,873 1,018,250 3,649,222 2,349,668
Administrative, processing, and occupancy 633,377 506,819 2,484,054 1,481,452
Debenture Financing costs 1,491,628
Goodwill amortization 64,472 56,478 193,416 2,540,851
----------- ----------- ----------- -----------
TOTAL EXPENSES 1,828,722 1,581,547 6,326,692 7,863,599
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (312,582) (568,226) (1,403,751) (4,879,590)
----------- ----------- ----------- -----------
OTHER
Interest income -- -- -- 28,975
Interest expense 22,082 9,669 64,067 441,176
----------- ----------- ----------- -----------
TOTAL OTHER, NET 22,082 9,669 64,067 470,151
----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (334,664) (577,895) (1,467,818) (5,349,741)
PROVISION FOR INCOME TAXES -- -- -- --
NET LOSS $ (334,664) $ (577,895) $(1,467,818) $(5,349,741)
=========== =========== =========== ===========
LOSS PER SHARE:
Basic $ (0.037) $ (0.082) $ (0.164) $ (0.795)
=========== =========== =========== ===========
Diluted $ (0.037) $ (0.082) $ (0.164) $ (0.795)
=========== =========== =========== ===========
Weighted average common shares outstanding 9,110,208 7,089,510 8,974,352 6,729,597
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
4
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AMERICA'S SENIOR FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
-------------------------------
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,467,837) $(5,349,731)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 258,820 2,596,633
Common stock issued for services 202,244
Common stock issued for deposits 25,000
Non cash interest expense and other costs
- convetible debentures 1,932,804
Recognition of restricted stock earned -- 38,280
Changes in certain assets and liabilities:
Brokerage fee receivable 31,604 (79,337)
Employee advances 6,940 (111,848)
Prepaid expenses (72,155) (111,430)
Other current assets and liabilities net 68,709 --
Accounts payable 348,591 316,678
Accrued liabilities (169,802) --
----------- -----------
NET CASH USED IN OPERATING ACT (767,886) (767,951)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase / Sale of property and equipme (6,024) (213,327)
Acquisition expenditures, net of cash acquired 460,219 (1,103,924)
Increase in mortgage loans (1,238,885) --
Changes in other assets -- (726,180)
----------- -----------
NET CASH USED IN INVESTING ACT (784,690) (2,043,431)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 187,292 598,948
Other capital contributions (807) --
Net Borrowings under lines of credit 987,637 --
Borrowing on capital lease obligations -- --
Due from shareholder 20,734 22,618
Change in long-term debt 10,099 2,611,608
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,204,955 3,233,174
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (347,621) 421,792
CASH AND CASH EQUIVALENTS, beginning of period 402,373 195,728
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 54,752 $ 617,520
=========== ===========
</TABLE>
See notes to financial statements.
5
<PAGE> 6
AMERICA'S SENIOR FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(continued) Nine Months
Ended September 30,
-------------------------------
2000 1999
----------- -----------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid in cash during the period $ 13,117 $ 48,601
=========== ===========
Income taxes paid in cash during the period $ -- $ --
=========== ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During January and February 2000, the holder of the convertible
debenture bond converted $676,001 of the principal, penalty and
accrued interest into 398,497 shares of common stock (see Note 4).
During the first Quarter 2000, the Company recognized $20,466 of
expense related to the vesting of restriced stock issued to
employees.
During the first Quarter 2000, the Company issued 541,950 shares valued
at $135,488 for services.
The Company issued 100,000 shares valued at $25,000, as a deposit on an
acquisition candidate.
During the second Quarter 2000, the Company issued 157,266 shares
valued at $28,845 for services.
During the third Quarter 2000, the Company issued 507,097 shares valued
at $142,596 for services. In the fourth quarter 258,065 shares
associated with the above were cancelled, effectively reducing the
share value to $70,028.
6
<PAGE> 7
AMERICA'S SENIOR FINANCIAL SERVICES, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS INCLUDING JUPITER
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1999
================================================================================
<TABLE>
<CAPTION>
1/01/99 to 1/01/99 to
Historic 1/31/99 9/30/99 Proforma
AMSE CFSF (1) Jupiter Adjustments Consolidated
--------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES 2,984,009 58,469 1,771,773 4,814,251
EXPENSES:
Payroll and related expenses 2,349,668 58,089 1,103,902 3,511,659
Administrative, processing, and occupancy 1,481,452 37,191 822,308 2,340,951
Debenture costs 1,491,628 1,491,628
Goodwill amortization 2,540,851 172,047 (a) 2,712,898
TOTAL EXPENSES 7,863,599 95,280 1,926,210 172,047 10,057,136
LOSS FROM OPERATIONS (4,879,590) (36,811) (154,437) (172,047) (5,242,885)
Interest expense net 470,151 470,151
PROFIT (LOSS) BEFORE INCOME TAXES (5,349,741) (36,811) (154,437) (172,047) (5,713,036)
PROVISION FOR INCOME TAXES
NET PROFIT (LOSS) (5,349,741) (36,811) (154,437) (172,047) (5,713,036)
</TABLE>
(a) To annualize goodwill as if this acquisition took place on January 1, 1999.
(1) Capital Funding of South Florida, Inc. (CFSF)
7
<PAGE> 8
PART I
ITEM 1. FINANCIAL STATEMENTS
Note 1, Basis of Presentation
The unaudited, condensed, consolidated financial statements included
herein, commencing at page 3, have been prepared in accordance with the
requirements of Regulation S-B and supplementary financial information included
herein, if any, has been prepared in accordance with Item 310(b) of Regulation
S-B and, therefore, omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Certain reclassifications have been made to the 1999 financial information to
conform to the presentation used in 2000. Results of operations for the three
months ended September 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000. These financial
statements should be read in conjunction with the Company's Form 10-KSB, as
filed with the Securities and Exchange Commission on April 14, 2000.
Note 2, Loss Per Share
The Company follows the provisions of SFAS No. 128, "Earnings Per
Share," which requires presentation of basic earnings per share including only
outstanding common stock, and diluted earnings per share including the effect of
dilutive common stock equivalents. The Company's basic and diluted losses per
share for all periods presented are the same since the Company's convertible
debentures, stock options, and warrants are anti-dilutive.
Note 3, Income Taxes
The Company follows the provisions of SFAS No. 109, "Accounting for
Income Taxes." In accordance with this statement, the Company records a
valuation allowance so that the deferred tax asset balance reflects the
estimated amount of deferred tax assets that may be realized. Therefore, the
deferred tax assets generated by the net losses in the periods presented have
been offset in their entirety by a deferred tax asset valuation allowance.
Note 4, Convertible Debentures
In May 1999, the Company entered into a Securities Purchase Agreement,
pursuant to which the Company issued $2,500,000 of 3% convertible debentures,
which are due May 6, 2002, and common stock purchase warrants for 34,383 shares
at $8.70 per share, which expire May 31, 2004. The Securities Purchase
Agreement, among other terms, allows the Company to require the buyer to
purchase additional convertible debentures up to $7,500,000, if certain criteria
are met with regard to the trading prices and activity of the Company's common
stock. Currently, these criteria are not met and the Company may not require the
buyer to purchase additional
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<PAGE> 9
debentures. The holder of the debentures may take the interest in either cash or
Company common stock. The debentures are convertible into common stock at the
option of the holder, and are converted at a price of the lower of (a) $8.70 per
share, or (b) 85% of the average closing bid price for the common stock for 5 of
the 20 trading days ending immediately before the conversion. At the time the
Company entered into this agreement the debentures would be convertible at $6.16
per share of the Company's common stock. In May 2000 the Company refused a
request to convert some of the debentures to common stock.
During 1999, the debenture holder converted $750,000 worth of debentures into
152,260 common shares. During the first three months ended March 31, 2000, the
debenture holder converted another $613,995 in principal and $62,032 in interest
and penalty into 398,497 common shares.
Note 5, Loans held for Sale/ Warehouse Line of Credit
As part of Jupiter Mortgage Corporation acquisition, completed in
August 1999, the Company obtained certain loan funding credit facilities. As a
result, the balance sheet of the Company includes a "Warehouse line of credit"
and "loans held for sale." The warehouse line of credit is used to fund loans as
they are produced, and this line of credit is secured by the mortgages.
Note 6, Secured Convertible Demand Promissory Note
During the second quarter the company paid off several outstanding lines of
credit, retiring $210,000 in short term debt. The Company executed a secured
convertible demand promissory note with a third party, which retired the
above-mentioned lines of credit and provided the Company with additional working
capital. The Company also funded certain types of loans through such third
party's mortgage subsidiary.
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<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTORY STATEMENT
The Private Securities Litigation Reform Act provides a "safe harbor"
for forward-looking statements. Certain statements included in this form 10-QSB
are forward looking and are based on the Company's current expectations and are
subject to a number of risks and uncertainties that could cause actual results
to differ significantly from results expressed or implied in any forward-looking
statements made by, or on behalf of, the Company. The Company assumes no
obligation to update any forward-looking statements contained herein or that may
be made from time to time by, or on behalf of, the Company.
RESULTS OF OPERATIONS
Revenues for the three-month period ending September 30, 2000 increased by 49%
to $1,516,140, up from $1,013,321 for the three-month period ending September
30, 1999. This growth in revenues is primarily attributable to the contribution
of the Jupiter Mortgage Corporation ("Jupiter") subsidiary, which was acquired
by the Company in August 1999 and whose results were only partially included in
the Company's 3rd quarter 1999 results. Revenues for the nine-month period
ending September 30, 2000 increased by 64% to $4,922,941, up from $2,989,009 for
the nine-month period ending September 30, 1999. Jupiter Mortgage Corporation
was the primary factor for this increase. Revenues for Jupiter Mortgage
Corporation for the nine-month's ended September 30, 2000 increased by 63% to
$3,480,263 up from $2,129,867 for the nine-month period ending September 30,
1999. See the Pro-forma financial statements including Jupiter, presented on
page 7 herein for the nine months ended September 30, 1999.
Total expenses for the three-month period ended September 30, 2000 compared to
the three-month period ended September 30, 1999 increased to $1,828,722 from
$1,581,547. This increase in expenses is partially attributable to the inclusion
of the Jupiter subsidiary, which was a part of the Company from mid August
through September during the third quarter of 1999. Total expenses for the
nine-month period ended September 30, 2000 compared to the nine-month period
ended September 30, 1999 decreased to $6,326,712 from $7,863,599. Jupiter
Mortgage Corporation was the primary factor for increasing total expenses, as it
was not a part of the Company's 1999 results. Overall the total expenses
decreased due to a one-time impairment adjustment for approximately 2.3 million
related to the purchase of Dow Mortgage, which is reflected in the Company's
1999 results. In addition the Company, pursuant to terms of those certain
acquisition agreements with Senior Income Reverse Mortgage Corporation and
Pinnacle Financial Corporation, wrote down the acquisition costs and deposits
related thereto, as these acquisitions were not consummated and the agreements
terminated pursuant to their terms. These costs were approximately $591,000.
Total other expenses for the three-month period ended September 30, 2000,
compared to the three-month period ended September 30, 1999 increased to $22,082
from $9,669. This increase
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<PAGE> 11
is due to an increase in interest expense. Total other expenses for the
nine-month period ended September 30, 2000 compared to the nine-month period
ended September 30, 1999 decreased to $64,067 from $470,151. This is
attributable to the interest expense of the convertible benefit of the
debentures in the amount of $441,176.
In summary, for the 3RD QUARTER 2000, the Company's loss was reduced from
$577,226 in 1999 (8.2 cents per share) to 334,664 in 2000 (3.7 cents per share).
This reduction represents an improvement of $242,562 or 43%.
In summary, for the YEAR TO DATE 2000 (through 9/30/2000) the Company's loss was
REDUCED from $5,349,741 in 1999 (79.5 cents per share) to $1,467,838 in 2000
(16.4 cents per share). This reduction represents an improvement of $3,881,903
or 72%.
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently managing the payment of our current
liabilities and obligations on a monthly basis as cash becomes available.
Although no assurances can be made for future periods, based on our September
results and the results in general from the third quarter 2000, the Company
believes that it is now cash flow neutral. During the second quarter, the
Company paid off several outstanding lines of credit, retiring $210,000 in short
term debt. The Company executed a secured convertible demand promissory note
with a third party, which retired the above-mentioned lines of credit and
provided the Company with additional working capital. The Company also funded
certain types of loans through such third party's mortgage subsidiary.
The Company issued $2,500,000 of convertible debentures in May 1999.
Each debenture is convertible into common stock. The number of shares of common
stock that may be issued upon conversion of the debentures depends upon the
market price of our common stock at the time of the conversion. At September 30,
2000, only 1,153,045 of the original 2,500,000 have not been converted into
common stock. Based upon the recent price of common stock of approximately
$0.45, if the debentures were converted into common stock, the Company would
issue 2,562,322 shares of common stock. Subject to certain criteria regarding
trading price and activity of the Company's common stock, the Company may issue
up to $7,500,000 of additional convertible debentures. These criteria are not
currently met. During 1999, the Company also issued warrants to purchase 34,483
shares of our common stock to the purchaser of the debentures and will issue
more warrants in the event of the sale of additional debentures. The material
risk associated with this type of debenture is that the Company's recent
historically low stock price could have a significant dilutive effect upon
future conversions of the principle amount of the debenture. In May 2000 the
Company refused the debenture holder's request to convert $75,000 of debentures
into approximately 400,000 shares of common stock. As a result, the debenture
holder accelerated the due date of the outstanding debentures and filed suit for
damages, which the Company intends to vigorously defend. See "Part II, Item 1.
Legal Proceedings." As a result it is unlikely that further debentures will be
issued.
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<PAGE> 12
PART II
ITEM 1. LEGAL PROCEEDINGS
On September 11, 2000 the Company was served a Complaint filed in U.S.
District Court, Southern District of New York, by Fennell Avenue LLC
against America's Senior Financial Services, Inc. The suit seeks
damages for our refusal to deliver certain shares of our common stock
to the Plaintiff upon Plaintiff's conversion of certain of our
convertible debentures. We believe that we were justified refusing the
request for conversion and intend to vigorously defend this matter.
The Plaintiff seeks the balance of the principal amount of the
convertible debenture, accrued interest, any profit they would have
received upon conversion of the debenture into common stock,
attorney's fees and such other relief as the Court may deem just and
proper.
ITEM 5. OTHER INFORMATION
During the third quarter of 2000, the Company issued 507,097 shares of
our common stock for services to be rendered. In the fourth quarter
258,065 shares associated with the above were cancelled, effectively
reducing the number of shares to 249,032.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.0 Financial data Schedule.
(b) Reports on Form 8-K.
1. A Form 8-K was filed as of February 3, 2000 regarding
Senior Income Reverse Mortgage Corporation and
Pinnacle Financial Corporation.
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<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICA'S SENIOR FINANCIAL SERVICES, INC.
Dated: November 21, 2000 By: /s/ Nelson A. Locke
----------------------------------------
Nelson A. Locke, President
Chief Executive Officer
Principal Accounting Officer
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