FIRST CAPITAL INTERNATIONAL INC, 10SB12G/A, 1999-08-24

FIRST CAPITAL INTERNATIONAL INC
10SB12G/A, 1999-08-24
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.

FORM 10-SB
AMENDMENT NO. 2

GENERAL INFORMATION FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-26271

FIRST CAPITAL INTERNATIONAL, INC.
(Name of Small Business Issuer in Its Charter)

Delaware 76-0582435
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)

5120 Woodway, Suite 9004, Houston, Texas 77056
(Address of Principal Executive Offices) (Zip Code)

tel. (713) 629-4866 fax (713) 629-4913
(Registrant's Telephone Number, including Area Code)

With copies to: Robert D. Axelrod, Attorney At Law
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
tel. (713) 861-1996 ext. 116 fax (713) 552-0202

Securities to be registered pursuant to Section 12(b) of the Act:

None.

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001

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TABLE OF CONTENTS

PART I

Item 1. Description of Business 1
Item 2. Management's Discussion and Analysis 13
Item 3. Description of Property 22
Item 4. Security Ownership of Certain Beneficial Owners and Management 23
Item 5. Directors, Executive Officers, Promoters and Control Persons 24
Item 6. Executive Compensation 26
Item 7. Certain Relationships and Related Transactions 28
Item 8. Description of Securities 30

PART II

Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters 32
Item 2. Legal Proceedings 33
Item 3. Changes in and Disagreements With Accountants 33
Item 4. Recent Sales of Unregistered Securities 34
Item 5. Indemnification of Directors and Officers 36

PART F/S

Financial Information F-1

PART III

Item 1. Index to Exhibits 36
Item 2. Description of Exhibits
The Exhibits required by this item are included
as set forth in the Exhibit Index 37

Signatures 38

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PART I

Item 1. Description of Business

INTRODUCTION

First Capital International, Inc., a Delaware company, (the "Company") was
incorporated in January, 1977. The principal executive offices of the Company
are located at 5120 Woodway, Suite 9004, Houston, Texas 77056;
tel. (713) 629-4866, fax (713) 629-4913.

The Company's common stock is currently traded on the over-the-counter
bulletin board ("OTC BB") under the symbol "FCAI."

The Company presently operates in two business segments:

--- A leasing company in the Republic of Estonia named EIP Liisingu AS
("EIP") an Estonian corporation, which leases business and consumer
items. The Company acquired 100% of EIP in 1998, in a
recapitalization transaction accounted for in a manner similar
to a reverse merger.

--- An Internet retail shopping site called PlazaRoyal.com, located at
www.plazaroyal.com. The Company began offering this website on the
Internet in March 1999. The main focus of this business segment is
marketing U.S. retailers to European consumers via this website.
The Company is presently in the phase of seeking cyber retail
tenants to lease space at this website and to date has not
generated any revenues from its operation.

References to the Company in this Form 10-SB include First Capital
International, Inc. and EIP Liisingu AS.

HISTORY

The Company was originally incorporated in the State of Utah in 1977 under
the name Galt-Atlantis Corporation. The Company had insignificant operations
until December, 1981 at which time the Company changed its name to Kan-Tx Energy
Company and commenced activities in the natural resources industry. Being
unsuccessful with its oil an gas business, Kan-Tx Energy Company suspended
operations from 1986 until May, 1994, at which time the Company effectuated a
one-for-ten reverse stock split and re-incorporated itself by merger into Kan-Tx
Energy Company, a Delaware company, formed for the purpose of permitting the
Company to conduct its affairs pursuant to Delaware corporate law rather than
Utah corporate law by changing the domicile of the Company to Delaware. Also in
May, 1994, the Company acquired all of the outstanding capital stock of Ranger
Car Care Corporation, an automotive service company, which until that time had
been a privately owned Texas corporation, in exchange for 10,000,000 shares of
the Company's common stock. In June, 1994, the Company changed its name to
Ranger/USA, Inc. and commenced activities in the automotive service business
through its wholly owned subsidiary Ranger Car Care Corporation. In December,

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1997, the Company suspended its automotive service business and was dormant from
December, 1997 until August, 1998.

In August, 1998, in anticipation of a business combination, the Company
changed its name to First Capital International, Inc. , increased the number of
authorized shares to 100,000,000 shares of capital stock, and the present
directors and officers were appointed. In September, 1998, the Company entered
into a Stock Exchange Agreement with the two stockholders of EIP, who were
Eurocapital Group, Ltd. and United Capital Group Limited. Pursuant to the Stock
Exchange Agreement, the Company issued a total of 34,000,000 shares of its
common stock to the former EIP stockholders in exchange for all of the
outstanding shares of EIP. The terms and conditions of the Stock Exchange
Agreement were determined by the parties through arms length negotiations and
approved by the Board of Directors. However, no appraisal was performed. The
Company treated the acquisition of EIP as a recapitalization whereby EIP was the
accounting acquiror. At the time of the acquisition, the Company estimated the
market value of the Company's common stock at approximately $.005 per share,
resulting in a valuation of the acquisition of approximately $170,000. The
Former EIP stockholders are presently the beneficial owners of 64.5% of the
common stock of the Company. See, Security Ownership of Certain Beneficial
Owners and Management.

In August, 1998, upon appointment of its present officers and directors and
initiation of the recapitalization involving EIP, the Company began current
operations. Management has evaluated the operations of EIP and has determined
that it does not currently make economic sense to commit additional resources to
expand EIP's leasing operations in Estonia. It is management's current intent
to grow the Company through the continued development and commercialization of
its Internet based business, PlazaRoyal.com in both the United States and
Eastern Europe. The Company will also consider the acquisition of financial
services or Internet related businesses in the same markets.

BUSINESS ACTIVITIES

Leasing Activities. The Company, through its wholly owned subsidiary EIP,
operates a leasing business in Estonia, a nation which gained its independence
during the fall of the Soviet Union. EIP was founded in 1994 by the Estonian
Innovation Bank, a bank in Estonia, and EIP was owned by the Estonian Innovation
Bank until 1998 at which time the Estonian Innovation Bank sold EIP to
Eurocapital Group, Ltd. and United Capital Group Limited.

EIP owns a portfolio of leases of apartments, appliances, equipment and
automobiles. These leases are made to consumers and businesses in Estonia. The
main service offered by EIP is direct financing (lease-to-own, or option to
purchase) leases. EIP presently has no operating leases. A lease is considered
to be a direct financing lease if ownership of the leased asset is transferred
to the lessee at the end of lease term or if the amount of the lease payments or
the duration of the lease meet certain criteria. EIP's investment in direct

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financing leases totaled $226,539 at December 31, 1998, and at that date, the
typical lease term of its direct financing leases was two to three years (see
Consolidated Financial Statements). EIP markets its services using newspaper
advertisements and other printed media in Estonia.

The Company currently funds leasing operations using cash flows from
operations and debt financing from the Estonian Innovation Bank, the former
owner of EIP. EIP, the Company's leasing subsidiary, uses such funds to acquire
the assets which it leases. The principal balance on the Estonian Innovation
Bank loan, which bears interest at 10% per annum was is $333,641 at December 31,
1998. This note is due in payments of interest only with a final balloon
payment of principal and interest due in May, 2002.

The Company believes that the Estonian Innovation Bank, the sole lender to
EIP, is insolvent and does not represent a source of further financing. The
Company has not analyzed other financing sources in Estonia but believes that
additional Estonia-based financing is not available or would be extremely costly
to obtain. Management has evaluated the operations of EIP and has determined
that it does not currently make economic sense to commit additional resources to
expand leasing operations in Estonia.

The Company has another source of financing, a credit line, with United
Capital Group, a major shareholder of the Company. However, the Company does
not intend to use this financing for activities related to EIP. At June 30,
1999, the Company has unused credit of $19,672 on this credit line, which
originally provided for credit of up to $300,000. The Company believes that an
additional $200,000 line of credit can be negotiated with United Capital Group.

Lease Portfolio. The Company owns leases that meet the criteria to be
classified as direct financing leases. Assets owned and leased under direct
financing leases are carried at the Company's gross investment in the lease less
unearned income. Unearned income is recognized in such a manner as to
produce a constant periodic rate of return on the net investment in the lease.

During the years ended December 31, 1998 and 1997, the Company entered into
37 and 111 leases, respectively. The average value of a new lease was
approximately $2,548 in 1997, approximately $14,000 in 1998 and approximately
$10,167 in the quarter ended March 31, 1999. The Company's operations in Estonia
are conducted in transactions denominated in the local currency of Estonia, the
kroon or EEK, which is pegged at 8 EEK = 1 German Mark (DM), and the calculation
of these average lease values was based on the US$/DM exchange rate at the end
of each period calculated.

The average duration of the lease contracts was 1.1 years for 1997, 2.5
years for 1998, and 2.8 years for the quarter ended March 31, 1999. The average
interest rate of the leases has been approximately 17% per annum since 1997.

The components of the Company's investment in direct financing leases at
December 31, 1998 were as follows:

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Lease contracts receivable (net of
accounts reserved of $5,439) $280,986
Less unearned income 54,447
--------
Investment in irect financing leases $226,539
========

The value of the Company's lease portfolio was $192,641 at March 31, 1999,
$226,539 at December 31, 1998, and $233,158 at December 31, 1997. In each of
these periods, there was only one operating lease. EIP presently has no
operating leases.

Customers. EIP's current customer base is 60% consumer and 40% business.
The customer base can be further characterized as 52% real estate related, such
as apartments, 20% automobile, 20% furniture and household goods such as major
appliances and 8% miscellaneous categories. The business base can be further
characterized as 65% automobile, 18% industrial equipment, 12% computers and
office equipment and 5% real estate.

Disposition at the end of the lease. At the end of a finance lease, EIP
disposes of the leased asset by transferring ownership of the leased asset to
the lessee. At the end of an operating lease, EIP continues ownership of the
leased asset and takes possession of the leased asset. EIP then either
re-leases the asset to a different customer or sells the asset. EIP presently
has no operating leases.

Disposition upon customer default. If a customer defaults on a lease
payment, the Company repossesses the property and either leases the asset to a
different customer or sells the asset. In 1997 approximately 12 of EIP's
leases went into default. In 1998 approximately 3 of EIP's leases went into
default. All of these leases were direct finance leases.

The leasing industry is relatively new in Estonia. The Company believes
that there are more than 10 other leasing companies in Estonia. Many of the
Company's competitors are well established and have substantially greater
capital resources and greater marketing capabilities than the Company. There
can be no assurance that the Company will be competitive.

E-commerce Related Activities. The Company recently began development of an
Internet cyber shopping mall called Plaza Royal.com at www.plazaroyal.com. Plaza
Royal.com provides U.S. retailers an opportunity to be part of a cyber shopping
mall. The Company's main focus for Plaza Royal.com is to market U.S. retailers
to European consumers. Plaza Royal.com is a 3-D, as well 2-D virtual reality,
fully interactive cyber shopping experience with the capability to market to
non-English speaking customers. The 3-D cyber shopping experience at Plaza
Royal.com is designed to be entertaining to the consumer and to provide the
feeling of being in a shopping mall. The Company is presently seeking cyber
retail tenants to sublease space on this website. To date, the Company has not
had any revenues from this website. The Company believes it can create revenue
from three sources:

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--- Revenues from rent fees paid by retail organizations who sell from
the site.
--- Revenues from advertisers on the site.
--- Revenues from retailers for transaction and credit card processing
fees.

The Company has entered into e-commerce affiliated merchant programs with
the following companies: Dell Computers, CBS Sports Store, Sharper Image,
Amazon.com, Discover Nature, CarPrice.com, Reel.com, Nextcard and Swiss Army
Depot and approximately 70 other companies. The merchant programs enable the
Company to earn a percentage of the sales generated when a visitor to the
Company's website links to the website of an affiliated merchant and makes a
purchase. The Company will receive between 1% and 20% as a sales commission on
these types of transactions. These types of merchant programs are quickly and
easily established by the Company by applying for the an affiliation with a
merchant program over the Internet, and then programming the link (such as a
banner or 3-D display stand) into the PlazaRoyal.com website. There has been no
direct cost to set up these merchant programs. There have been no revenues from
these merchant programs to date. The sales commission rates are established by
the seller and no negotiation with the Company takes place. For example, Dell
Computers gives a 1% sales commission and Sharper Image gives a 20% commission.
No single merchant program is material to the Company.

The Company has plans to develop a legal directory portal website under the
name LegalClaims.com to provide consumers with listings of providers of legal
services, and to market legal services of subscribers to consumers, all in
jurisdictions where this type of activity is permitted. The Company has already
reserved the website name www.legalclaims.com. Revenues will come from
advertising, subscribers, and sharing in legal fees in jurisdictions where this
type of activity is permitted. The Company is in the process of designing the
website.

FOREIGN OPERATIONS

EIP operates in a part of the world which could be viewed as having a high
potential for political, economic and military instability. For example,
Estonia is near Russia. If the political situation in Russia worsened, a spill
over effect into Estonia could have adverse consequences for EIP. Some other
nations which gained independence after the fall of the Soviet Union have
experienced instability. If such instability were to occur in Estonia, the
Company's business could be adversely affected. The Company has no insurance
to cover political risks.

According to the July 12, 1999 "Quarterly Review-Estonia", a
PricewaterhouseCoopers publication, the Estonian inflation rate has been
negative since December, 1998, and the Estonian Consumer Price Index growth rate
has fallen to 3.1% in June, 1999 from 10.2% in June, 1998. Estonia is
recovering from banking sector missteps that took place in the recent past.
Upon the break up of the former Soviet Union, the economy of Estonia became a
credit driven economy due to inflows of foreign investment, which allowed the
then recently privatized corporations to postpone corporate financial,
operational and governance restructuring. At that time there were approximately
40 banks in Estonia. The postponement of these restructurings by the private
corporate debtors lead to credit defaults by the private corporations. The end

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result is that now approximately 90% of the banking sector is owned by two
Swedish conglomerates, there are only four banks remaining and credit is tightly
controlled. The tight credit environment has led to a reduction in imports and
an increase in unemployment, both of which act to reduce inflationary tendencies
and to lower consumer prices.

Estonia is a free market democracy with established commercial laws. In
Estonia, lease agreements are governed by the Estonian Law of Rent and the Law
of Property. Under these laws, if the lessee does not make a payment within
three months of a due date, or within such shorter period specified in the lease
agreement, the lessor is entitled to repossess the leased property (under a
legal theory of unilateral anticipatory termination). A repossession causes no
tax consequences to the lessor or investors). At this time, Estonian law is
unsettled as to whether a lessor must first make a claim of anticipatory
termination by the lessee in court.

The local currency of Estonia is the Estonian kroon or EEK. Because the
EEK is the functional currency for its Estonian subsidiary under Financial
Accounting Standards Board Statement No. 52, "Foreign Currency Translation"
(FAS 52), assets and liabilities denominated in foreign functional currencies
are generally translated at the exchange rate as of the balance sheet
date. Translation adjustments are recorded as a separate component of
stockholders' deficit. Revenues, costs and expenses denominated in foreign
functional currencies are translated at the weighted average exchange rate
for the period. Therefore, the Company has exposure to foreign currency
fluctuations and foreign government intervention such as a devaluation of the
local currency, or a freeze of international transfer of funds. The Estonian
Central Bank does not have the power to devalue the EEK, and technical
fluctuations are restricted to 3%. However, a devaluation of the German Mark
(DM) or the Euro could occur, with a resulting effect on the exchange rate of
the EEK. The Estonian Central Bank has officially pegged the EEK at 8 EEK = 1
DM. Therefore, the Company is also subject to foreign currency risks related
to the DM. Relative to the U.S. dollar, a declining EEK or DM would negatively
impact the value, in U.S. dollars, of the Company's transactions in Estonia. The
Estonian Central Bank has also officially pegged to the Euro at 15.64 EEK = 1
Euro, which is considered the equivalent of the DM peg. Therefore, the Company
is also subject to the same types of foreign currency risks related to the Euro.
Relative to the U.S. dollar, a declining Euro would negatively impact the value,
in U.S. dollars, of the Company's transactions in Estonia.

EMPLOYEES

As of July 21, 1999, the Company had nine employees in the USA and EIP had
four employees in Europe. No employees are represented by a union. The Company
believes that its employee relations are good.

SUBSIDIARIES

The Company has two wholly-owned subsidiaries, EIP Liisingu AS ("EIP"), an
Estonian corporation, which is a leasing company in Europe, and Ranger Car Care
Corporation, a Texas corporation, which is presently dormant.

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In July, 1999, the Company terminated negotiations to acquire 100% of the
outstanding equity of TGK-LINK AS, an Estonian company.

IMPACT OF THE YEAR 2000 ISSUE

The Year 2000 issue is the result of computer programs and hardware with
embedded date technology using two digits to define the applicable year rather
than four. Any programs or hardware that are time sensitive and have not
been determined to be Year 2000 compliant may recognize a date using "00" as the
year 1900 rather than the year 2000. Such improper date recognition could, in
turn, result in erroneous processing of data, or, in extreme situations, system
failure.

The Company is currently implementing a Year 2000 program which encompasses
performing an inventory of information technology and non-information
technology systems, assessing the potential problem areas, testing the systems
for Year 2000 readiness, and modifying systems that are not Year 2000 compliant.

To date, inventory and assessment are in progress for all core systems that
are essential for business operations. The Company believes all of its core
systems are Year 2000 compliant. Because many of the Company's systems are new
and designed to be year 2000 compliant, the Company's management estimates that
the work they have completed represents more than seventy-five percent of the
work involved preparing the Company's systems for the Year 2000.

Although the Company expects to be ready to continue business activities
without interruption by a Year 2000 problem, Company management recognizes the
general uncertainty inherent in the Year 2000 issue, in part because of the
uncertainty about the Year 2000 readiness of third parties, particularly in
Estonia and other Eastern European countries. Under a "worst case Year 2000
scenario", it may be necessary for the Company to temporarily interrupt normal
business activities or operations and to seek outside financing for cash flow
problems brought on by customer payment problems. The Company believes that
such circumstances could result in a material adverse impact to its operations
and in its current financial position, threaten its continued existence. The
Company has begun, but not yet completed, development of a contingency plan to
deal with the most likely worst case Year 2000 scenario". The contingency plan
is expected to be completed during the fourth quarter of 1999.

Based on a current assessment, the Company's total cost of becoming Year
2000 compliant is not expected to be significant to its financial position,
results of operations or cash flows and is estimated to be less than $10,000.

RISK FACTORS

Going Concern Risk

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During 1998 and 1997, the Company has been dependent on debt and equity
raised from individual investors and related parties to sustain its operations
and has incurred net losses of $827,104 and $26,953, respectively. Also, during
the year ended December 31, 1998, the Company had negative cash flows from
operations of $190,567. These factors along with a stockholders' deficit of
$130,699 at December 31, 1998 raise substantial doubt about the Company's
ability to continue as a going concern. (See Note 3 of the Consolidated
Financial Statements on Page F-11) The Company's long-term viability as a going
concern is dependent upon three key factors as follows:

- - The Company's ability to obtain adequate sources of debt or equity funding
to meet current commitments and fund the continuation of its business
operations.

- - The ability of the Company to acquire or internally develop viable
businesses.

- - The ability of the Company to ultimately achieve adequate profitability and
cash flows from operations to sustain its operations.

As a result of potential liquidity problems that the Company faces, its
auditors, Ham, Langston & Brezina, L.L.P. have added an explanatory paragraph
in their opinion on the Company's financial statements indicating that
substantial doubt exists about the Company's ability to continue as a going
concern.

Recent Losses and Accumulated Losses and Deficit, and Potential Deficiencies in
Liquidity

The Company's ability to achieve profitability will depend, in part, on its
ability to successfully develop and market its Internet site on a wide scale.
There is no assurance that the Company will be able to successfully make the
transition from development to commercial success for its Internet site on a
broad basis. While attempting to make this transition, the Company will be
subject to all risks inherent in a growing venture, including the need to
develop marketing expertise and produce significant revenue. The Company may
incur losses for the foreseeable future due to the significant costs associated
with Internet site development and commercialization activities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company incurred a net loss of $827,104 for the year ending December
31, 1998, and a net loss of $26,953 for the year ended December 31, 1997. At
December 31, 1998 the Company had an accumulative deficit of $865,340. Revenues
decreased during the year ending December 1998 to $57,174 from $132,872 during
the year ended December 31, 1997. Losses have been largely attributable to the
Company becoming active in August, 1998 after a dormant period, and the
Resulting commencement of business operations. Management believes that
revenues will increase, and ultimately that the Company will be profitable,
although there can no assurance that this will occur.

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Lack of Financing for Future Acquisitions and Expenditures

Financing for the Company. Until such time as the operating results of the
Company improve sufficiently, the Company must obtain outside financing to fund
the expansion of the business and to meet the obligations of the Company as they
become due. Any additional debt or equity financing may be dilutive to the
interests of the shareholders of the Company. Such financing must be provided
from the Company's operations, or from the sale of equity securities, borrowing,
or other sources of third party financing in order for the Company to expand its
operations. Further, the sale of equity securities could dilute the Company's
existing stockholders' interest, and borrowings from third parties could result
in assets of the Company being pledged as collateral and loan terms which would
increase its debt service requirements and could restrict the Company's
operations. There is no assurance that capital will be available from any of
these sources, or, if available, upon terms and conditions acceptable to the
Company.

Financing for EIP. The Company funds its leasing operations through its
cash flow from operation and from long term debt financing which it presently
has from third parties. EIP, the Company's leasing subsidiary, utilizes these
funds to acquire the assets which it leases. EIP presently owes long term debt
in the remaining principal balance of $333,641, which is payable interest only
on a monthly basis at 10% interest per annum with a final balloon payment of
principal and interest due in May, 2002.

The Company believes that the Estonian Innovation Bank, the sole lender to
EIP, is insolvent and does not represent a source of further financing.
Estonian Innovation Bank owned EIP at one time. The Company has not analyzed
other financing sources in Estonia but believes that additional Estonia-based
financing is not available or would be extremely costly to obtain. Management
has evaluated the operations of EIP and has determined that it does not make
economic sense to commit additional resources to expand leasing operations in
Estonia. If EIP does not raise new funds to finance new leases, EIP will
ultimately be in a self- liquidating situation, whereby EIP would find itself
with de minimis cash and no leases. EIP presently has no operating leases and
does not possess any assets that were the subject of previous operating leases.

Foreign Political Risk

Uninsured Political Risks

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The Company does not have any political risk insurance to cover its foreign
assets or bassness. There can be no assurance that the Company may not be
exposed to a complete loss of its foreign assets and business due to foreign
political events.

Foreign Currency Risk

Presently, the Company's operations in Estonia are conducted in
transactions denominated in the local currency of Estonia, the kroon or EEK. The
Company has determined that the EEK is the functional currency for its
Estonian subsidiary under Financial Accounting Standards Board Statement No.
52, "Foreign Currency Translation" (FAS 52). Under FAS 52, assets and
liabilities denominated in foreign functional currencies are translated at the
exchange rate as of the balance sheet date. Translation adjustments are
recorded as a separate component of stockholders' deficit. Revenues, costs and
expenses denominated in foreign functional currencies are translated at the
weighted average exchange rate for the period. Therefore, the Company has
exposure to foreign currency fluctuations and foreign government intervention
such as a devaluation of the local currency, or a freeze of international
transfer of funds. The EEK is pegged at 8 EEK = 1 German Mark (DM). Therefore,
the Company is also subject to the same types of foreign currency risks related
to the DM. Relative to the U.S. dollar, a declining EEK or DM would negatively
impact the value, in U.S. dollars, of the Company's transactions in Estonia.
The EEK is also pegged to the Euro at 15.64 EEK = 1 Euro, which is considered
the equivalent of the DM peg. Therefore, the Company is also subject to the
same types of foreign currency risks related to the Euro. Relative to the U.S.
dollar, a declining Euro would negatively impact the value, in U.S. dollars, of
the Company's transactions in Estonia.

Risk of Dilution Upon Conversion of Options

The Company presently has outstanding a total of 4,550,000 options to
purchase common stock of the Company at exercise prices of $.05 to $.25 per
share, which are below market exercise prices. The Company also has outstanding
debt owed by the Company to United Capital Group, Ltd. that presently may be
converted into 1,886,545 shares of common stock. The conversion price is $0.05
per share. If exercises or conversion occur, other shareholders will be subject
to an immediate dilution in per share net tangible book value.

Limited Operating History; No Assurance of Successful Implementation of Business
Strategy

The Company became active in August, 1998 after a dormant period. In
addition to those risks specifically inherent in the establishment and growth of
a developing businesses, including, among other things, limited access to
capital, delays in the completion of its business plan in certain markets and
intense competition, profits from e-commerce and eastern-Europe related business
endeavors have been elusive. There can be no assurance that the Company's
business ultimately will be successful. Therefore, ownership of securities of
the Company must be regarded as the placing of funds at a high risk in a new or
developing venture with all of the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject.

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Ability to Locate Suitable Combination Partners

The Company periodically enters into preliminary, non-binding discussions
with other firms in Internet related or Internet exploitable industries. Such
discussions could result in business combinations. While the Company desires
that such business combinations occur, no assurance can be given that any future
business combination can be structured on terms acceptable to the Company.

Control by Management

Alex Genin, the Chief Executive Officer and Chairman of the Board of the
Company is the beneficial owner approximately 71.6% of the common stock of the
Company. As a result, management, as a practical matter, will be able to elect
all directors and otherwise control the affairs of the Company for the
foreseeable future.

Certain Securities Law Considerations

The Company's stock is considered penny stock and subject to the penny
stock rules promulgated under the Securities Exchange Act of 1934, Rules 15g-1
to 15g-9. The penny stock rules require broker-dealers to take steps under
certain circumstances prior to executing any penny stock transactions in
customer accounts. Among other things, Rule 15g-3 requires a broker or dealer
to advise potential purchasers of a penny stock of the lowest offer and highest
bid quotations for such stock, and Rule 15g-4 requires a broker or dealer to
disclose to the potential purchaser its compensation in connection with such
transaction. Under Rule 15g-9, a broker or dealer who recommends such
securities to persons other than established customers must make a special
written suitability determination for the purchaser and receive the purchaser's
prior agreement to such a transaction. The effect of these regulations may be
to delay transactions in stocks that are deemed to be penny stocks, and
therefore sales of the Company's common stock by brokers or dealer and resales
by investors could be adversely affected.

Possible Volatility of Common Stock Price

The market price of the Common Stock may be highly volatile, as has been
the case with the securities of many other small capitalization companies.
Additionally, in recent years, the securities markets have experienced a high
level of price and volume volatility and the market prices of securities for
many companies, particularly small capitalization companies, have experienced
wide fluctuations which have not necessarily been related to the operating
performances or underlying asset values of such companies.

Issuance of Preferred Stock

The Company presently has authorized 10,000,000 shares of preferred stock,
par value $.001 per share, non of which are outstanding. The shares of Preferred

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Stock, if issued, would be entitled to preferences over the Common Stock. The
Company's Board of Directors will have authority, without action or consent by
the stockholders, to issue the authorized but unissued shares of Preferred Stock
in one or more series, to fix the number of shares in each series, and to
determine the voting rights, preferences as to dividends and liquidation rights,
conversion rights, and other rights of any such series. The shares of Preferred
Stock, when and if issued, could adversely affect the rights of the holders of
Common Stock, and could prevent holders of common stock from receiving a premium
for their common stock. For example, such issuance could result in a class of
securities outstanding that would have preferences with respect to voting rights
and dividends and in liquidation over the Common Stock, and could (upon
conversion or otherwise) enjoy all of the rights of holders of Common Stock.
The Board's authority to issue Preferred Stock could discourage potential
takeover attempts and could delay or prevent a change in control of the Company
through merger, tender offer, proxy contest or otherwise by making such attempts
more difficult to achieve or more costly. The Company may designate Series A
Convertible Preferred Stock in the near future in connection with a proposed
sale of securities. See, Preferred Stock--Description of Securities

No Cash Dividends

The Company has never paid cash dividends on its Common Stock and the Board
of Directors does not anticipate paying cash dividends in the foreseeable
future. It currently intends to retain future earnings to finance the growth of
its business.

Limitation on Director Liability

The Company's Articles of Incorporation provide, as permitted by governing
Delaware law, that a director of the Company shall not be personally liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, with certain exceptions. These provisions may discourage
stockholders from bringing suit against a director for breach of fiduciary duty
and may reduce the likelihood of derivative litigation brought by stockholders
on behalf of the Company against a director.
Competition

There are many companies which are currently engaged in e-commerce and
leasing. However, the Company intends to exploit markets in eastern Europe, and
enter niche markets in the U.S., such as the legal referral and services market.
Some of the Company's competitors are more established companies with
substantially greater capital resources and have substantially greater marketing
capabilities than the Company. No assurances can be given that the Company will
be able to successfully compete with such companies. The cost of entry into the
e-commerce marketplace is low. The Company anticipates that the number of
competitors will increase in the future.

Dependence On, and Availability of Management; Management of Growth

12
<PAGE>
The success of the Company is substantially dependent upon the time,
talent, and experience of Alex Genin, its President and Chief Executive Officer.
The Company has no employment agreement with Mr. Genin. The loss of the
services of Mr. Genin would have a material adverse impact on the Company and
its business. In the event of Mr. Genin's unavailability or in the event that he
should become temporarily disabled, the Company believes that it presently has
in place management systems and controls which are sufficiently strong to enable
it to run efficiently and effectively until Mr. Genin's return or until a
replacement could be found. No assurance can be given, however, that a
replacement for Mr. Genin could be located in the event of his unavailability.
Further, in order for the Company to expand its business operations, it must
continue to improve and expand the level of expertise of its personnel and must
attract, train and manage qualified managers and employees to oversee and manage
the expanded operations. Demand for Internet and computer industry personnel is
high. There is no assurance that the Company will be in a position to offer
competitive compensation to attract or retain such personnel.

Ability to Manage Growth

It is the intention of the Company to expand its existing business
operations by acquiring companies and starting new businesses. Such expansion
will subject the Company to a variety of risks associated with rapidly growing
companies. In particular, the Company's growth may place a significant strain on
its day-to-day operations. There can be no assurance that its systems, controls
or personnel will be sufficient to meet these demands. Inadequacies in these
areas could have a material adverse effect on the Company's business, financial
condition and results of operations.

Item 2. Management Discussion and Analysis

FORWARD-LOOKING STATEMENT AND INFORMATION

The Company is including the following cautionary statement in this Form
10-SB to make applicable and take advantage of the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies,
expectations, future events or performance and underlying assumptions and other
statements which are other than statements of historical facts. Certain
statements contained herein are forward-looking statements and, accordingly,
involve risks and uncertainties which could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements. The
Company's expectations, beliefs and projections are expressed in good faith and

13
<PAGE>
are believed by the Company to have a reasonable basis, including without
limitations, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties,
but there can be no assurance that management's expectations, beliefs or
projections will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are important
factors that, in the view of the Company, could cause actual results to differ
materially from those discussed in the forward-looking statements: the ability
of the Company's management to operate on a global basis; the ability of the
Company to effectuate and successfully operate acquisitions, and new operations;
the ability of the Company to obtain acceptable forms and amounts of financing
to fund current operations and planned acquisitions; the political, economic and
military climate in nations where the Company may have interests and operations;
the ability to engage the services of suitable consultants or employees in
foreign countries; and competition and the ever-changing nature of the Internet
and e-commerce. The Company has no obligation to update or revise these
forward-looking statements to reflect the occurrence of future events or
circumstances.

The following description of the Company's financial position and results
of operations should be read in conjunction with the Financial Statements and
the Notes to Financial Statements, contained in this report as set forth
beginning on page F-1.

INTRODUCTION

The Company intends to make all of the acquisitions by issuing common stock
in exchange for the acquired businesses. However, the Company may need
additional capital to enter into acquisitions. In the event that capital is
needed to effectuate certain acquisitions, the Company will be required to raise
substantially all of the funds for such acquisitions. The Company anticipates
that most, if not all, of any acquisitions it may make during the next 12 months
will be of operating entities that have current management in place.

The Company's first acquisition occurred in September, 1998 when the
Company completed the acquisition of 100% of the stock of EIP from the
stockholders of EIP in exchange for a total of 34,000,000 shares of the
Company's common stock.

14
<PAGE>
over effect into Estonia could have adverse consequences for EIP. Some other
nations which gained independence after the fall of the Soviet Union have
experienced instability. If such instability were to occur in Estonia, the
Company's business could be adversely affected.

The operations of EIP are conducted in Estonia with transactions
denominated in the local currency of Estonia, the EEK. Therefore, the Company
has exposure to foreign currency fluctuations and foreign government
intervention such as a devaluation of the local currency (see below for
discussion of foreign currency issues).

The Company believes that EIP's existing cash flow is adequate to fund its
existing lease portfolio. The Company's future ability to enter into new
leases is dependent upon the availability of financing. The Company's main
objective for the next 12 months is to maintain the existing portfolio of
leases.

The Company presently believes that the development and expansion of its
e-commerce business website, Plaza Royal.com, will require additional capital.
The Company will seek financing for Plaza Royal.com through the sale of debt or
equity. In order to achieve these objectives, the Company will be required to
raise additional funds from the sale of equity or debt. The sale of equity
securities could dilute the Company's existing stockholders' interest, and
borrowings from third parties could result in restrictive loan terms which would
increase the Company's debt service requirements and could restrict the
Company's operations. It is unknown at this time whether the Company will be
successful in raising capital on reasonable terms for the purpose of increasing
the capital base of EIP or for financing the further development of Plaza
Royal.com.

During late 1998 through March 31, 1999, the Company, in private
transactions, raised approximately $65,000 in cash through the sale of its
common stock and options.

PLAN OF OPERATION

The current plan of operation involves the further development of our main
E-commerce Portal: PlazaRoyal.com. The Company originally developed this portal
in March and April of 1999. At the present time the Company is actively in the
process of signing on new merchants for the PlazaRoyal.com Mall. Among those
already signed are Dell Computers, CBS Sport Stores, Discover Nature Stores, the
Sharper Image, Omaha Steaks, the Swiss Army Depot, Office Max, Hickory Farms and
Amazon.com.

Additionally, the Company is working on the development of the new
cyberstore concept, which will allow merchants to operate their respective
stores on the Internet as a joint venture with our Company. Also, we are in the
process of developing a detailed marketing program, which will enable our
shopping mall to function in several languages in several different countries.
Various local Internet providers in several countries have expressed an active
interest in supporting these developments in Europe.

15
<PAGE>
ANALYSIS OF FINANCIAL CONDITION

At June 30, 1999, the Company has an unused available amount of $19,672
under a credit line which was in the original amount of $300,000. This credit
line was provided by United Capital Group, a major shareholder of the Company.

The Company is actively seeking new acquisitions in the United States
and throughout Europe and currently negotiations are underway for the
acquisition of several E-commerce companies in the United States, as well as
travel related service companies with E-commerce features. The Company is
pursuing several new acquisition opportunities in Eastern Europe and is
presently negotiating for the acquisition of several Internet providers in the
Baltic Region. The Company is seeking to accomplish any further acquisition on a
stock exchange basis only. This would enable the Company to acquire additional
assets and maintain its cash flow as well.

Further, the Company is in the process of actively developing a new
international legal directory portal under the name of "LegalClaims.com." This
portal will enable us to expand our E-commerce services into this new market
segment, as well as, generate new revenue(s) for the Company from the sale of
memberships to legal professionals, as well as, revenue from advertising and
other types of services to the global legal community.

The Company currently has plans to increase the number of its employees by
hiring a marketing manager and an operations manager. Also, the Company has
contracted with the E-commerce Solution Company in order to provide full
E-commerce services to the clients of the PlazaRoyal.com portal. The Company
intends to finance these respective expenditures from the sale of its securities
and the Company's existing stockholders could suffer significant dilution in per
share net tangible book value from such sales of securities by the Company.

Since the Company emerged from dormancy it has been dependent on outside
financing from individuals and related parties to fund its Internet site
development and general corporate overhead. The Company is now in the phase of
building markets for PlazaRoyal.com and will continue to be dependent on outside
financing for the foreseeable future. If the Company is unable to successfully
transition from site development to commercial success for PlazaRoyal.com in a
reasonable time frame and/or is unable to acquire other commercially viable
businesses, the Company may be unable to obtain adequate sources of long-term
financing to continue operations.

GOING CONCERN ISSUE

During 1998 and 1997, the Company has been dependent on debt and equity
raised from individual investors and related parties to sustain its operations
and has incurred net losses of $827,104 and $26,953, respectively. Also, during
the year ended December 31, 1998, the Company had negative cash flows from
operations of $190,567. These factors along with a stockholders' deficit of
$130,699 at December 31, 1998 raise substantial doubt about the Company's

16
<PAGE>
ability to continue as a going concern. (See Note 3 of the Consolidated
Financial Statements on Page F-12) The Company's long-term viability as a going
concern is dependent upon three key factors as follows:

- - The Company's ability to obtain adequate sources of debt or equity funding
to meet current commitments and fund the continuation of its business
operations.

- - The ability of the Company to acquire or internally develop viable
businesses.

- - The ability of the Company to ultimately achieve adequate profitability and
cash flows from operations to sustain its operations.

Management has specific plans to address the financial situation as
follows:

- - In the near term the Company plans a private placement of its common stock
to qualified investors to fund its current operations.

- - The Company has filed a Form 10-SB and is a reporting company under the
Securities and Exchange Act of 1934. Management believes this step will
provide a market for its common stock and provide a means of obtaining
future funds necessary to implement its business plan.

- - In the long-term, the Company believes that cash flows from acquired
businesses and businesses that it is currently developing will provide
the resources for its continued operations. The Company has developed
PlazaRoyal.com, a virtual mall, for launch on the Internet. Management
believes that revenues from this virtual mall, if successfully marketed,
will more than cover overhead at the corporate level. Acquisition
activities and development of the Company's Internet project resulted in
corporate headquarters accounting for 95% of the Company's total net
loss in 1998.

COMPETITION

The Company believes that only a very limited number of sites on the
Internet offer the same type of 3-D shopping experience that PlazaRoyal.com
intends to offer. The Company also believes that as technology and related
Internet access speeds improve, that PlazaRoyal.com will attract both a greater
number of customers and more intense competition from other 3-D Internet
shopping sites. Such competition could ultimately make 3-D an ordinary feature

17
<PAGE>
of Internet shopping malls. The Company has developed a normal 2-D version of
its site that requires less graphic data transfer and is better suited for
current technology. This 2-D Internet site is already subject to extreme
competition and an inability by the Company to properly target its customers and
differentiate its Internet site from the sites of its competitors could have a
significant adverse impact on the Company. The Company plans to target markets
in Eastern Europe that management believes are either undeveloped or are not
adequately served.

The Company believes that EIP, the Company's leasing operation in Estonia,
is not subject to severe competition in the markets it serves because the
leasing industry is relatively new to Estonia. However, the financial systems
in Estonia are not as well developed as those in the United States and the
Company intends to continue leasing operations in Estonia only to the extent
that they are supported by EIP's current cash flows from operations.

FOREIGN CURRENCY TRANSLATION AND INFLATION ISSUES

EIP's functional currency is the Estonian kroon ("EEK") and substantially
all business conducted by EIP is conducted within Estonia. Small changes in the
U.S. dollar/EEK exchange rate do not have a significant impact on EIP's
financial position or results of operations. However, declines in the value of
the EEK generally reduce the value of certain of EIP's assets and cause
deterioration in the Company's overall financial position. If Estonia
experiences growing inflation, the Company could be classified as a highly
inflationary economy under generally accepted accounting principles. Under this
circumstance, declines in the value of the EEK would be reflected in operations
and would negatively impact the Company's financial position and results of
operations. To stabilize its currency, the government of Estonia has enacted
monetary policy that "pegs" the exchange rate of the EEK to the German mark
("DEM") in the ratio of 8 EEK = 1 DEM. Because the exchange rate of the DEM is
relatively stable against the U.S. dollar, the exchange rate of the EEK should
also be expected to be relatively stable against the U.S. dollar.

18
<PAGE>
to the DM. Relative to the U.S. dollar, a declining EEK or DM would negatively
impact the value, in U.S. dollars, of the Company's transactions in Estonia. The
Estonian Central Bank has also officially pegged to the Euro at 15.64 EEK = 1
Euro, which is considered the equivalent of the DM peg. Therefore, the Company
is also subject to the same types of foreign currency risks related to the Euro.
Relative to the U.S. dollar, a declining Euro would negatively impact the value,
in U.S. dollars, of the Company's transactions in Estonia.

Estonia has experienced a great amount of political and economic
instability and inflation increased, but then stabilized in 1999. Accordingly,
the government's monetary policy could come under pressure. If inflation
increases, both the outlook for leasing operations and the effect of translation
adjustments will negatively impact the Company's financial position and results
of operations.

SIGNIFICANT TRENDS

During 1998 EIP entered into 37 new finance leases as compared to 111 in
1997. Substantially all leases entered into by EIP are finance leases and the
average dollar amount of each lease was approximately $14,730 in 1998 and $2,548
in 1997. This trend highlights the fact that the Company's leasing operations
have been and are expected to continue to be adversely impacted by
underdeveloped Estonian financial markets and by managements decision to employ
substantially all new capital resources in funding the Company's Internet site
development and in building markets for its Internet sites. The Company intends
to continue servicing its existing lease portfolio but intends to enter into new
leases only to the extent that such new leases are supported by EIP's cash flows
from operations. Because EIP experienced negative cash flows from operations
of approximately $7,000 during 1998, the Company will fund few, if any, new
leases in 1999. The Company expects that negative cash flows from operations
at EIP during 1999 will meet or exceed those experienced in 1998 not only due to
a decline in leasing activity but also because the Company intends to use the
EIP employees to help in the development of markets for the Company's Internet
sites and in fund raising efforts in Eastern Europe.

RESULTS OF OPERATIONS

Year Ended December 31, 1998 Compared to the Year Ended December 31, 1997

During 1998 the Company experienced a decline in revenues of $75,698 or 57%
as compared to 1997. This decline in revenue was the direct result of a
decline in leasing activity in EIP that was caused by a deterioration of the
financial markets in Estonia and related limitations on the availability of
capital to enter into new leases. (See Significant Trends above.)

During 1998 the Company's operating, general and administrative costs of
approximately $258,000 increased 313% as compared to 1997. The increase of
approximately $176,000 was made up of an increase of approximately $95,000 in
personnel costs, an increase of approximately $61,000 in legal and other
professional fees.

19
<PAGE>
During 1998 depreciation and amortization decreased by $3,435 or 29% as
compared to 1997. This increase was the direct result of the expiration of
certain leases and disposition of the related leased assets. The Company
believes that such decreases will continue in future years as the Company
downsizes its leasing operations through EIP in Estonia and concentrates on
development of PlazaRoyal.com and other related Internet businesses.

During 1998 stock and option based compensation was $546,822 due to the
sale of common stock to officers and employees at below market prices and due to
the issuance of options for purchase of common stock with exercise prices below
the current price of the Company's common stock at the date of issue. Such
sales resulted in charges to compensation expense for the difference between the
market price and the exercise/sales price at the date of issue/sale. In 1997
there were no similar sales or issuances of stock and options.

During 1998 the Company had a net loss of ($827,104) compared to a net loss
of ($26,953) in 1997. The increased net loss was largely attributable to the
Company's Internet related activities in the United States as the net loss from
operations in Estonia, through EIP, increased by only $11,738. As described in
more detail above, the primary reasons for the increased losses were stock and
option based compensation charges and increases in personnel, legal and
professional fees in 1998.

Three Months Ended March 31, 1999 Compared to the Three Months Ended March 31,
1998

During the three months ended March 31, 1999 the Company's revenues were
consistent as compared to the three months ended March 31, 1998. Revenues were
consistent because both periods reflect the same decline in leasing activity in
EIP that was caused by a deterioration of the financial markets in Estonia and
related limitations on the availability of capital to enter into new leases.
(See Significant Trends above.)

During the three months ended March 31, 1999 the Company's operating,
general and administrative costs increased by approximately $61,000 as compared
to the three months ended March 31, 1998. This increase was made up of an
increase of approximately $50,000 in personnel costs and an increase of
approximately $11,000 in legal and other professional fees. The $61,000
increase was attributable to the following: $26,000 to the commencement of
operations after a dormant period, $24,000 to the development the Company's
PlazaRoyal.com Internet site and $11,000 to general business development.

During the three months ended March 31, 1999 depreciation and amortization
remained constant as compared to the three months ended March 31, 1998 due to
similar levels of activity in EIP.

During the three months ended March 31, 1999 stock and option based
compensation was $142,574 due to the sale of common stock to officers and
employees at below market prices and due to the issuance of options for purchase

20
<PAGE>
of common stock with exercise prices below the current price of the Company's
common stock at the date of issue. Such sales resulted in charges to
compensation expense for the difference between the market price and the
exercise/sales price at the date of issue/sale. In the three months ended March
31, 1998 there were no similar sales of stock and options.

Interest expense increased from $7,957 during the three months ended March
31, 1998 to $69,012 during the three months ended March 31, 1999. The increase
was the result of the Company issuing convertible debt with a below market
common stock conversion rate during late 1998. The resulting discount on the
debt was amortized to interest expense over the term of the debt and resulted in
additional interest expense of approximately $61,000 during the three months
ended March 31, 1999.

During the three months ended March 31, 1999 the Company had a net loss of
($296,216) compared to a net loss of ($3,061) in the three months ended March
31, 1998. The increased net loss was largely attributable to the operations in
the United States as the net loss from operations in Estonia through EIP's
increased by only $1,487. As described in more detail above, the primary
reasons for the increased losses were stock and option based compensation
charges, increases in interest expense and increases in personnel, legal and
professional fees in 1998.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999, the Company had cash resources of approximately $130,000
and believes that it can obtain additional convertible debt from an existing
related party lender of approximately $200,000 to fund its current operations.
The Company's cash requirements for operations currently average approximately
$150,000 per quarter and management does not expect such requirements to change
until at least the first quarter of 2000. Accordingly, the Company will require
approximately $600,000 from outside sources to fund its 1999 operations.

The Company does not currently have any commitments for capital
expenditures in EIP. The Company intends to continue servicing its existing
lease portfolio but intends to enter into new leases only to the extent that
such leases are supported by EIP's cash flows from operations. Those cash flows
are not expected to allow additional leases in 1999 (See Significant Trends
above).

The Company expects to be able to raise sufficient capital for 1999
operations but raising the capital may cause dilution in per share net tangible
book value to existing shareholders. The Company will ultimately need to
produce positive cash flows from operations to meet its long-term capital needs.
(See Going Concern Issue above.)

21
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE

Item 3. Description of Property

The Company's principal executive offices are located at 5120 Woodway,
Suite 9004, Houston, Texas 77056, in approximately 2,000 square feet of office
space which is subleased from a firm owned by Alex Genin, the President of the
Company, on a month to month sublease for $2,343 per month. EIP leases
approximately 3,000 square feet of office space in Estonia on a month to month
lease for approximately $2,100 per month from an independent third party. The
Company believes that its offices are adequate for its present and future needs.

22
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of August 16, 1999
with respect to the beneficial ownership of shares of common stock by (i) each
person who is known to the Company to beneficially own more than 5% of the
outstanding shares of common stock, (ii) each director of the Company, (iii)
each executive officer of the Company and (iv) all executive officers and
directors of the Company as a group. Unless otherwise indicated, each
stockholder has sole voting and investment power with respect to the shares
shown. As of August 16, 1999, the Company had outstanding 66,238,142 shares of
common stock, and no outstanding preferred stock.

<TABLE>
<CAPTION>
Percent
Name and Address Shares of Common of
of Beneficial Holder Stock Beneficially Owned Class
- -------------------------------- ------------------------- ------
<S> <C> <C>
Alex Genin 50,026,545 (1)(2)(6) 71.6%
5120 Woodway, Suite 9004
Houston, Texas 77056

Eurocapital Group, Ltd. 25,500,000 (2) 39.1%
19 Peel Road
Douglas, Isle of Man
British Isles 1M1 4LS

United Capital Group Limited 17,826,545 (2)(3) 25.2%
50 Town Range, Suite 7B
Gibraltar

Michael Dashkovsky 4,500,000 (4) 6.8%
5120 Woodway, Suite 9004
Houston, Texas 77056

Abrador, SA 3,618,100 5.6%
48 East Street
Bella Vista, Sucre Building
Panama

Joseph a. Bond 400,000 .6%
5120 Woodway, Suite 9004
Houston, Texas 77056

Walter C. Wilson 200,000 (5) .3%
1900 West Loop South, Suite 2050
Houston, Texas 77027

23
<PAGE>
Joselito H. Sangel 500,000 (5) 0.8%
5120 Woodway, Suite 9004
Houston, Texas 77056

All officers and directors as
a Group--Five Persons 55,626,761 85.3%
_____________________________
<FN>

(1) Includes options to purchase up to 2,700,000 shares of common stock of
the Company which are presently exercisable at excise prices of from
$.05 to $.25 per share.

(2) Alex Genin currently holds powers of attorney from Eurocapital Group,
Ltd. and United Capital Group Limited pursuant to which Mr. Genin is granted
voting and investment power with respect to shares of the Company. Accordingly,
Mr. Genin is deemed to be the beneficial owner of these shares. Mr. Genin does
not own any stock of Eurocapital Group, Ltd. or United Capital Group Limited.

(3) Pursuant to the loan agreement, this amount includes 1,886,545 shares
issuable upon conversion of debt owed by the Company to United Capital Group,
Ltd. The conversion price is $0.05 per share.

(4) Includes an option to purchase up to 1,500,000 shares of common stock of
the Company which is presently exercisable at an exercise price of $0.05 per
share.

(5) Includes an option to purchase up to 100,000 shares of common stock of
the Company which is presently exercisable at an exercise price of $0.10 per
share.

(6) Includes shares owned by Eurocapital Group, Ltd. and United Capital
Group Limited.
</TABLE>

Item 5. Directors, Executive Officers, Promoters and Control Persons

The directors and executive officers of the Company are as follows.

<TABLE>
<CAPTION>
Name and Address Age Position
- -------------------------------- ----- ------------------
<S> <C> <C>
Alex Genin 47 Director, CEO, and
5120 Woodway, Suite 9004 President
Houston, Texas 77056

Joseph a. Bond 65 Director and
5120 Woodway, Suite 9004 Secretary
Houston, Texas 77056

24
<PAGE>
Michael Dashkovsky 37 Director
5120 Woodway, Suite 9004
Houston, Texas 77056

Walter C. Wilson 51 Director
1900 West Loop South, Suite 2050
Houston, Texas 77027

Joselito H. Sangel 45 Vice President of
5120 Woodway, Suite 9004 Finance
Houston, Texas 77056
</TABLE>

Directors are elected annually and hold office until the next annual
meeting of the stockholders of the Company or until their successors are elected
and qualified. Officers serve at the discretion of the Board of Directors. There
is no family relationship between or among any of the directors and executive
officers of the Company.

BIOGRAPHIES

Alex Genin has been a Director, President and a major shareholder of the
Company since August, 1998. Since 1992, Mr. Genin has been the President of ECL
Trading Company, which trades goods and commodities in Europe and countries of
the former Soviet Union. Since 1985, Mr. Genin has been the President of Eastern
Credit Ltd. Inc. which provides mortgage and financial consulting services in
Europe, Asia and the United States. Mr. Genin has extensive experience in
business activities in Europe, Asia and countries of the former Soviet Union.

Joseph a. Bond has been a Director and the Secretary of the Company since
August, 1998. For more than five years, Mr. Bond has been an attorney in the
private practice of law in Texas. Mr. Bond has extensive experience in
international tax law.

Michael Dashkovsky has been a Director of the Company since August, 1998
and since March, 1999 he has been the Company's Manager of European Operations.
Since 1990, Mr. Dashkovsky has been employed by Eastern Credit Ltd., Inc. as a
manager, and as the President of the Estonian Innovation Bank until February,
1999. This bank owned EIP at one time.

Walter C. Wilson has been a Director of the Company since January, 1999.
Since 1974, Mr. Wilson has been an attorney in private practice in Texas. Mr.
Wilson is licensed to practice law in Texas and Florida. He has a J.D. degree,
1969, from the University of Florida Law School. Mr. Wilson practices in
international law and international taxation.

Joselito H. Sangel has been the Company's Vice-President of Finance since
September, 1998. Since 1996, Mr. Sangel has been an accountant with EC Group
Companies, a firm controlled by Alex Genin. From 1988 through 1995 Mr. Sangel
was a portfolio accountant with First Interstate Bank.

25
<PAGE>
Item 6. Executive Compensation

The following table reflects all forms of compensation for services to the
Company for years ended December 31, 1998, 1997 and 1996 of Mr. Genin and
Michael Dashkovsky, a Director of the Company. No other executive officer of the
Company received compensation which exceeded $100,000 during these periods.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

ANNUAL LONG TERM COMPENSATION
COMPENSATION
AWARDS PAYOUTS
OTHER ALL
NAME AND ANNUAL RESTRICTED SECURITIES OTHER
PRINCIPAL COMPEN- STOCK UNDERLYING LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARDS OPTIONS/SARS PAYOUTS SATION
- ------------------- ----- ----------- ----- ------- -------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alex 1998 $37,000-(1) -0- -0- -0-(2) -0-(2) -0- 278,170 (3)(4)
Genin 1997 $ -0- -0- -0- -0- -0- -0- -0-
1996 $ -0- -0- -0- -0- -0- -0- -0-
Director,
CEO
and President

Michael 1998 $ -0- -0- -0- -0- -0- -0- 202,110 (5)(6)
Dashkovsky 1997 $ -0- -0- -0- -0- -0- -0- -0-
1996 $ -0- -0- -0- -0- -0- -0- -0-
Director and
Manager of
European Operations
<FN>
(1) This $37,000 was indirect compensation to Mr. Genin. In addition, businesses owned by Mr. Genin
received $131,553 as reimbursement for providing the Company with office space and business
services (such as: secretarial services, telecommunications services, and photostating services),
managerial and consultant staffing and travel expenses. For the current year 1999 to date,
Mr. Genin indirectly received an additional $43,400 as compensation. See, Certain Relationships
and Related Transactions.

26
<PAGE>
(2) On April 7, 1999, the Company awarded Mr. Genin with an immediately exercisable Option to purchase
up to 200,000 shares of common stock of the Company at an exercise price of $0.25 per share
expiring on March 31, 2002. This was compensation for services rendered from August, 1998 through
March 31, 1999.

(3) In 1998, Mr. Genin purchased an immediately exercisable option to purchase up to 2,500,000 shares
of common stock of the Company at an exercise price of $0.05 per share. The exercise price was
below the fair value of the Company's common stock on the date the option was purchased and the
option was valued at $31,250. Mr. Genin has not exercised this option and at December 31, 1998,
the value of his unexercised in the money option was $500,000. Mr. Genin paid $140 for this option.

(4) In 1998, Mr. Genin purchased 4,000,000 shares of the Company's common stock for $0.0008 per share
when the fair value of the stock was approximately $0.0625 per share. This transaction resulted
in compensation to Mr. Genin of $246,920.

(5) In 1998, Mr. Michael Dashkovsky, Manager of Eastern Operations and a Director of the Company,
purchased an immediately exercisable option to purchase up to 1,500,000 shares of common stock of
the Company at an exercise price of $0.05 per share. The exercise price was below the fair value
of the Company's common stock on the date the option was purchased and the option was valued at
$18,750. Mr. Dashkovsky has not exercised this option and at December 31, 1998, the value of his
unexercised option was approximately $300,000.

(6) In 1998, Mr. Dashkovsky also purchased 3,000,000 shares of the Company's common stock for $0.0014
per share when the fair value of the stock was approximately $0.0625 per share. This transaction
resulted in compensation to Mr. Dashkovsky of $183,360.
</TABLE>

EMPLOYMENT AGREEMENTS

The Company does not have an employment contract with any of its employees.
The Company presently intends to negotiate an employment contract with Alex
Genin which would be approved by the Board of Directors, however, no terms have
been discussed at this time.

DIRECTOR COMPENSATION

The Company does not currently pay any cash directors' fees.

27
<PAGE>
EMPLOYEE STOCK OPTION PLAN

The Company believes that equity ownership is an important factor in its
ability to attract and retain skilled personnel, and the Board of Directors of
the Company may adopt an employee stock option plan in the future. The purpose
of the stock option program will be to further the interest of the Company, its
subsidiaries and its stockholders by providing incentives in the form of stock
options to key employees and directors who contribute materially to the success
and profitability of the Company. The grants will recognize and reward
outstanding individual performances and contributions and will give such persons
a proprietary interest in the Company, thus enhancing their personal interest in
the Company's continued success and progress. This program will also assist the
Company and its subsidiaries in attracting and retaining key employees and
directors.

Item 7. Certain Relationships and Related Transactions

Alex Genin currently holds powers of attorney from Eurocapital Group, Ltd.
and United Capital Group Limited pursuant to which Mr. Genin is granted voting
and investment power with respect to shares of the Company. Accordingly, Mr.
Genin is deemed to be the beneficial owner of these shares. Mr. Genin does not
own any stock of Eurocapital Group, Ltd. or United Capital Group Limited.

The Company believes that the terms and conditions of all of the following
transactions were no less as favorable to the Company than terms attainable from
unaffiliated third parties. The terms of these transactions were determined by
the parties through arms length negotiations. These transactions were made at a
time when the Company's common stock had a very low market value and there was
only de minimis and infrequent trading activity.

Effective September, 1998, United Capital Group Limited and the Company
entered into a loan agreement, pursuant to which the Company may borrow up to
$300,000. As part of the loan agreement, during 1998, United Capital Group
Limited, on behalf of the Company, reimbursed businesses owned by Mr. Genin for
services which Mr. Genin's businesses provided to the Company, including office
space and business services (such as: secretarial services, telecommunications
services, and photostating services), managerial and consultant staffing
(including payments to Mr. Genin of $37,000 in 1998) and travel expenses. Mr.
Genin's businesses provided these services on terms no less favorable to the
Company than terms obtainable from unaffiliated third parties. At the time
these transactions occurred, the Company had limited resources, and was unable
to find any alternative source of financing. In 1998, Mr. Genin's businesses
received $168,553 under this arrangement and the cumulative total was $186,000
as of January 31, 1999. In February, 1999, United Capital Group and the Company
agreed to exchange the $186,000 indebtedness for 7,440,000 shares of common
stock. Pursuant to the loan agreement, this debt was converted at a conversion
price of $0.025 per share, which, at the time of conversion, was below market
value.

28
<PAGE>
The Company continues to use this method of financing to provide itself
with resources and capabilities, and will do so until it is able to secure
alternative sources of capital on better terms. United Capital Group Limited may
convert additional debt for shares of common stock of the Company pursuant to
the loan agreement at an exchange price of $0.05 per share for conversions
occurring on or after February 1, 1999. At June 30, 1999, the Company owes
$16,672 to United Capital Group Limited pursuant to this agreement. United
Capital Group Limited owns approximately 26.6% of the common stock of the
Company. Beginning August, 1999, United Capital Group Limited will begin
directly providing funds to the Company, instead of paying the funds to
businesses owned by Alex Genin. At that time, Mr. Genin will begin receiving
$6,200 per month in compensation directly from the Company.

During 1998, Mr. Genin's businesses compensated Mr. Genin in the amount of
$37,000 for services he rendered related to the Company. During 1999 to date,
Mr. Genin's businesses compensated Mr. Genin in the amount of $43,400 for
services he rendered related to the Company. Mr. Genin beneficially owns
approximately 71.6% of the common stock of Company.

In September, 1998, the Company entered into a Stock Exchange Agreement
with the two stockholders of EIP, who were Eurocapital Group, Ltd. and United
Capital Group Limited. The Company issued a total of 34,000,000 shares of common
stock of the Company to the EIP stockholders in exchange for all of the
outstanding shares of EIP. The terms and conditions of the Stock Agreement
Exchange were determined by the parties through arms length negotiations and was
approved by the Board of Directors. However, no appraisal was performed. As a
result of these transactions, Eurocapital Group, Ltd. now beneficially owns
39.2% of the common stock of the Company, and United Capital Group Limited now
beneficially owns 26.6% of the common stock of the Company. The Company treated
the acquisition of EIP as a recapitalization whereby EIP was the accounting
acquiror. At the time of the acquisition, the Company estimated the market
value of the Company's common stock at approximately $.005 per share, resulting
in a valuation of the acquisition of approximately $170,000.

Estonian Innovation Bank, which previously owned EIP, made a loan to EIP in
1997. The current principal balance on this loan, which bears interest at 10%
per annum, is $333,641, which is payable interest only on a monthly basis with a
final balloon payment of principal and interest due in May, 2002. The Company
does not believe that this funding source will provide any additional financing.
Eurocapital Group, Ltd. owns approximately 54% of Estonian Innovation Bank and
beneficially owns 39.2% of the common stock of the Company.

In October, 1998, the Company sold to Alex Genin 4,000,000 shares of common
stock at one-tenth cent per share and granted Mr. Genin an option to purchase
2,500,000 shares of common stock of the Company exercisable at $0.05 per share
expiring in August, 2001, for the total cash sum of $4,140. This option is
presently exercisable. These issuances were approved by the Board of Directors.
This was an incentive approved by the Board of Directors to persuade Mr. Genin
to become an officer and director and to devote virtually all of his time to the
management of the Company at a time when there was no meaningful market for the
shares and when the Company had limited financial resources. In April, 1999 the
Company granted Mr. Genin an option to purchase up to 200,000 of common stock to
the Company exercisable at $0.25 per share expiring in March, 2002.

29
<PAGE>
In October, 1998, Company sold to Michael Dashkovsky 3,000,000 shares of
common stock at one-tenth cent per share and granted Mr. Dashkovsky an option to
purchase 1,500,000 shares of common stock of the Company exercisable at $0.05
per share expiring in August, 2001, for the total cash sums of $3,080. This
option is presently exercisable. These issuances were approve by the Board of
Directors. This was an incentive approved by the Board of Directors to persuade
Mr. Dashkovsky to become an officer and director and to devote substantially all
of his time to the management of the Company at a time when there was no
meaningful market for the shares and when the Company had limited financial
resources.

Item 8. Description of Securities

The authorized capital stock of the Company consists of 100,000,000 shares
of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par
value $0.001. The Board of Directors may establish series or classes of shares
out of the authorized shares. As of August 16, 1999, the Company had
outstanding 66,238,142 shares of common stock, and no outstanding preferred
stock. The Company may, however, designate Series a Convertible Preferred
Stock in the near future in connection with a possible sale of securities. The
Company has no present plans or agreements to increase the number of authorized
shares of its capital stock. In the event that a corporate opportunity presents
itself, the Board may seek shareholder approval to increase the number of
authorized shares. Further, the Company may effectuate a reverse split of its
common stock in the future.

The following summary description of the securities of the Company is
qualified in its entirety by reference to the Certificates of Incorporation, as
amended, and the Bylaws of the Company, as amended, copies of which are filed as
exhibits to this Form 10-SB.

COMMON STOCK

The Company's Articles of Incorporation authorize 100,000,000 shares
of common stock. The holders of common stock are entitled to one vote per share
with respect to all matters required by law to be submitted to stockholders of
the Company, including the election of directors. The common stock does not
have any cumulative voting, preemptive, subscription or conversion rights. The
election of directors and other general stockholder action requires the
affirmative vote of a majority of shares represented at a meeting in which a
quorum is represented, except that pursuant to the Bylaws a consent to corporate
action by a majority of shareholders entitled to vote on a matter is permitted.
The outstanding shares of common stock are validly issued, fully paid and
non-assessable.

The holders of common stock are entitled to receive dividends when, as and
if declared by the Board of Directors out of funds legally available therefor
only after accrued dividends are paid to holders of preferred stock and other

30
<PAGE>
senior securities. In the event of liquidation, dissolution or winding up of
the affairs of the Company, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them subject to
the rights of holders of preferred stock and other senior securities.

PREFERRED STOCK

There are no shares of preferred stock outstanding. However, the Company
may designate Series a Convertible Preferred Stock in the near future in
connection with a proposed sale of securities. The Company's Articles of
Incorporation authorize 10,000,000 shares of preferred stock and provide that
the Board of Directors may designate the voting power, preferences, relative,
participating optional or other special rights, and qualifications, limitations
or restrictions of preferred stock. The Company's Articles of Incorporation
also provide that the Board of Directors may create one or more classes of
preferred stock and one or more series of preferred stock.

Series a Convertible Preferred Stock. If designated, the description of
Series a Convertible Preferred Stock would be qualified in its entirety by
reference to the Company's Articles of Incorporation, Bylaws and the Certificate
of the Designation, Preferences, Rights and Limitations of Series a Convertible
Preferred Stock.

Series a Convertible Preferred Stock would be convertible into common stock
beginning 24 months after purchase as follows: (i) at a conversion ratio of 20
shares of common stock per share of Series a Convertible Preferred Stock, or,
(ii) at a conversion price calculated as 70% of the average of the daily high
and low bid per share of common stock during the 20 trading days preceding
conversion, whichever method results in a greater of shares of common being
issued on the conversion date. However, the conversion price shall not be less
than $.10 per share of common stock. The Series a Convertible Preferred Stock
dividend would be the payment-in-kind of common stock for the equivalent of a
15% annual dividend rate on the stated value of the Series a Convertible
Preferred Stock. The value of common stock in connection with a dividend is
calculated as the average of the daily high and low bid per share of common
stock during the 20 trading days preceding the record date of the annual
dividend payment. Series a Convertible Preferred Stock would be non-voting.

31
<PAGE>
PART II

Item 1. Market Price of and Dividends on the Registrant's Common Stock and
Other Shareholder Matters

The Company's common stock is currently traded on the over-the-counter
bulletin board ("OTC BB") under the symbol "FCAI." The following table sets
forth, for the periods indicated, the reported high and low closing bid
quotations for the common stock of the Company as reported on the OTC BB . The
bid prices reflect inter-dealer quotations, do not include retail markups,
markdowns or commissions and do not necessarily reflect actual transactions.

<TABLE>
<CAPTION>
HIGH LOW
QUARTER ENDED BID BID
- ---------------------- -------- -------
<S> <C> <C>
March 31, 1997 $ (*) $ (*)
June 30, 1997 $ (*) $ (*)
September 30, 1997 $ (*) $ (*)
December 31, 1997 $ (*) $ (*)

March 31, 1998 $ (*) $ (*)
June 30, 1998 $ (*) $ (*)
September 30, 1998 $ (*) $ (*)
December 31, 1998 $ (**) $(**)

March 31, 1999 $ 1/2 $ 1/4
June 30, 1999 $ 1-7/16 $ 1/4
July 1, 1999 through
August 18, 1999 $ 15/16 $ 5/8
______________________
<FN>

(*) To the best of the Company's knowledge, from January 1, 1996 through
October, 1998, no broker-dealer made an active market or regularly
submitted quotations for the Company's stock. During this period
there were only an infrequent number of trades and virtually no
trading volume.

32
<PAGE>
(**) To the best of the Company's knowledge, from November, 1998 through
January, 1999, there were only an infrequent number of trades and
little trading volume.
</TABLE>

The closing bid price on the Company's common stock was $7/8 per share on
August 13, 1999. As of August 16, 1999, there were approximately 1013 holders
of record of the Company's common stock.

The Company's transfer agent is OTC Stock Transfer, Inc., 321 East 2100
South, Salt Lake City, UT 84115; PO Box 65665, Salt Lake City, UT 84165; tel.
(801) 485-555, fax (801) 486-0562.

DIVIDEND POLICY

The Company has not paid, and the Company does not currently intend to pay
cash dividends on its common stock in the foreseeable future. The current policy
of the Company's Board of Directors is for the Company to retain all earnings,
if any, to provide funds for operation and expansion of the Company's business.
The declaration of dividends, if any, will be subject to the discretion of the
Board of Directors, which may consider such factors as the Company's results of
operations, financial condition, capital needs and acquisition strategy, among
others.

Item 2. Legal Proceedings

None.

Item 3. Changes in and Disagreements With Accountants

(a) On July 2, 1998 the Company engaged Ham, Langston & Brezina, L.L.P.
("Ham, Langston & Brezina") as its independent accountant. The decision to
engage Ham, Langston & Brezina as the Company's independent accountant was
recommended and approved by the chairman of the Company's Board of Directors.

(b) In a report dated May 2, 1994, Darrell T. Schvaneveldt, Certified Public
Accountant, reported on the Company's financial statements as of April 30, 1994,
December 31, 1993, 1992 and 1991, and the related statements of operations,
stockholders' equity and cash flows for the accumulated period January 3, 1977
to April 30, 1994, the period January 1, 1994 to April 30, 1994, and for the
years ended December 31, 1993, 1992 and 1991. Such report did not contain an
adverse opinion or disclaimer of opinion, nor was such report qualified or
modified as to uncertainty, audit scope, or accounting principles. Darrell T.
Schvaneveldt, Certified Public Accountant, understands that he was terminated as
the Company's independent accountant effective May 2, 1994. Thereafter, the
Company engaged Ham, Langston & Brezina as its independent accountant on July 2,
1998.

33
<PAGE>
(c) During the Company's two fiscal years ended December 31, 1998 and 1997,
and the subsequent interim period preceding the decision to engage independent
accountants, there were no "reportable events" (hereinafter defined) requiring
disclosure pursuant to Item 304 of Regulation S-B.

(d) Effective July 2, 1998, the Company engaged Ham, Langston & Brezina as
its independent accountant. During the two years ended December 31, 1998 and
1997, and the subsequent interim period preceding the decision to engage
independent accountants, neither the Company nor anyone on its behalf consulted
Ham, Langston & Brezina regarding either the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements,
nor has Ham, Langston & Brezina provided to the Company a written report or oral
advice regarding such principles or audit opinion.

Darrell T. Schvaneveldt, Certified Public Accountant, has provided the Company
with a letter pursuant to Rule 304 of Regulation S-B.

Item 4. Recent Sales of Unregistered Securities

During the past three years, the following transactions were effected by
the Company in reliance upon exemptions from registration under the Securities
Act of 1933 as amended (the "Act") as provided in Section 4(2) thereof. Each
certificate issued for unregistered securities contained a legend stating that
the securities have not been registered under the Act and setting forth the
restrictions on the transferability and the sale of the securities. No
underwriter participated in, nor did the Company pay any commissions or fees to
any underwriter in connection with any of these transactions. None of the
transactions involved a public offering.

In September, 1998, the Company entered into a Stock Exchange Agreement
with the two stockholders of EIP, whereby the Company issued a total of
34,000,000 shares of common stock of the Company to the EIP stockholders in
exchange for all of the outstanding shares of EIP. The Stock Exchange Agreement
was the result of negotiations between the Company and the EIP stockholders.
The Company believes that the EIP stockholders had knowledge and experience in
financial and business matters which allowed them to evaluate the merits and
risk of the receipt of these securities of the Company. The Company believes
that the EIP stockholders were knowledgeable about the Company's operations and
financial condition.

In October, 1998 the Company sold a total of 7,650,000 shares of common
stock to six employees of the Company for prices ranging from $.001 to $.01 per
share in cash. In November, 1998 the Company sold 80,000 shares to another
employee at a purchase price of $.005 per share. In October, 1998, the Company
sold a total of 4,250,000 options to purchase common stock of the Company to
eight persons who were employees of the Company. The Company believes that each
of the persons had knowledge and experience in financial and business matters
which allowed them to evaluate the merits and risk of the purchase of these
securities of the Company. All of these persons were employees or vendors of
the Company and in such capacity they were knowledgeable about the Company's
operations and financial condition.

34
<PAGE>
In October, November and December, 1998, the Company sold a total of
1,420,000 shares of common stock to eight persons at prices ranging from $.005
to $.04 per share. The Company believes that these persons had knowledge and
experience in financial and business matters which allowed them to evaluate the
merits and risk of the purchase of these securities of the Company. The Company
believes that each of them was knowledgeable about the Company's operations and
financial condition.

In January, February and March, 1999, the Company sold a total of 1,780,000
shares of common stock to 14 persons at prices ranging from $.005 to $.05 per
share in cash. The Company believes that these persons had knowledge and
experience in financial and business matters which allowed them to evaluate the
merits and risk of the purchase of these securities of the Company. The Company
believes that each of them was knowledgeable about the Company's operations and
financial condition.

In February, 1999, pursuant to a loan agreement effective September, 1998,
United Capital Group Limited and the Company agreed to exchange the existing
indebtedness on this loan (which was $186,000) for 7,440,000 shares of common
stock, or $0.025 per share. The Company believes that each of the EIP
stockholders had knowledge and experience in financial and business matters
which allowed them to evaluate the merits and risk of the exchange or purchase
of these securities of the Company. The Company believes that the EIP
stockholders had knowledge and experience in financial and business matters
which allowed them to evaluate the merits and risk of the purchase of these
securities of the Company, and that they were knowledgeable about the Company's
operations and financial condition. Pursuant to the loan agreement, after
February, 1999, other such conversions as may occur will have a conversion price
of $0.05 per share.

In April, 1999, the Company awarded Mr. Genin with an immediately
exercisable option to purchase up to 200,000 shares of common stock of the
Company at an exercise price of $0.25 per share expiring on March 31, 2002. This
was compensation for services rendered from August, 1998 through March 31, 1999.
Mr. Genin is an officer and director of the Company. The Company believes that
Mr. Genin had knowledge and experience in financial and business matters which
allowed him to evaluate the merits and risk of the receipt of this option The
Company believes that each of he was knowledgeable about the Company's
operations and financial condition.

From April through July 22, 1999, seven persons purchased a total of
215,000 shares of common stock of the Company at purchase prices of $0.05 per
share to $0.25 per share. The Company believes that each of the persons had
knowledge and experience in financial and business matters which allowed them to
evaluate the merits and risk of the purchase of these securities of the Company.
The Company believes that each of these persons were knowledgeable about the
Company's operations and financial condition.

35
<PAGE>
In August, 1999, the Company sold 1,000,000 shares of commons stock to
Bailey Pacific Enterprises ("Bailey") for cash consideration of $200,000. The
Company believes that Bailey had knowledge and experience in financial and
business matters which allowed it to evaluate the merits and risk of the
purchase of these securities of the Company. The Company believes that the
Bailey was were knowledgeable about the Company's operations and financial
condition.

Item 5. Indemnification of Directors and Officers

The following summary description of material provisions of the Company's
Certificate of Incorporation and Bylaws is qualified in its entirety by
reference to the Certificate of Incorporation and the Bylaws of the Company,
copies of which are included as exhibits to this Form 10-SB.

The Company's Certificate of Incorporation, Section Seven, provides that a
Director of the Company is not liable to either the Company or its shareholders
for breach of fiduciary duties unless the breach involves a breach of loyalty to
the Company or its shareholders, acts or omissions not in good faith which
involve intentional misconduct or knowing violation of law, liability for
unlawful payments of dividends or unlawful stock purchase or redemption by the
Company, or a transaction from which the director derived an improper personal
benefit.

The Company's Bylaws, Article V, Section 14, provides for the
indemnification of present and future officers and directors for all liabilities
against the officer or director in connection with any claim by reason of his
being or having been an officer or director of the Company.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the Company's Certificate of Incorporation or Bylaws, the Company has been
informed that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.

PART F/S

The financial information required by this item is included as set forth on Page
F-1.

PART III

Item 1. Index to Exhibits.

<TABLE>
<CAPTION>
<C> <C> <S>
3.1 (*) Certificate of Incorporation and Amendments thereto.
3.2 (*) By-Laws and Amendments thereto.
4.1 (*) Form of Common Stock Certificate.
Stock Exchange Agreement by and among First Capital
International, Inc. and certain registered holders of capital stock

36
<PAGE>
10.1 (*) of EIP Liisingu AS, an Estonian corporation.
10.2 (*) Loan agreement between the Company and United Capital Group, Ltd
16.1 (*) Letter on change of certifying accountant.
21.1 (*) Subsidiaries of the registrant.
27.1 (*) Financial Data Schedule for the year ended December 31, 1997.
27.2 (**) Financial Data Schedule for the year ended December 31, 1998.
27.3 (**) Financial Data Schedule for the three months ended March 31, 1999.
_________________
<FN>
(*) Previously provided
(**) Provided herewith
</TABLE>

Item 2. Description of Exhibits.

The Exhibits required by this item were previously provided
in the Company's submission of its original Form 10-SB as
filed with the Commission on June 4, 1999.

37
<PAGE>
SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Amendment No. 2 of Form 10-SB registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized.

First Capital International, Inc.

August 23, 1999 By /s/ Alex Genin
--------------------------------
Alex Genin
Director, CEO and President

August 23, 1999 By /s/ Joselito H. Sangel
--------------------------------
Joselito H. Sangel
Vice President of Finance

38
<PAGE>

FIRST CAPITAL INTERNATIONAL, INC.
__________

CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

F-1
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
TABLE OF CONTENTS
__________

PAGE(S)
-------

<S> <C>
Report of Independent Auditors. . . . . . . . . . F-3

Audited Financial Statements

Consolidated Balance Sheet as of December 31,
1998. . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statement of Operations for the
years ended December 31, 1998 and 1997. . . . F-5

Consolidated Statement of Stockholders' Deficit
for the years ended December 31, 1998 and
1997. . . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statement of Cash Flows for the
years ended December 31, 1998 and 1997. . . . F-8

Notes to Consolidated Financial Statements. . . . F-9
</TABLE>

F-2
<PAGE>
REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
First Capital International, Inc.

We have audited the accompanying consolidated balance sheet of First Capital
International, Inc. as of December 31, 1998, and the related statements of
operations, stockholders' deficit and cash flows for each of the two years in
the period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of EIP Liisingu A.S., a company with which the Company merged in
1998. The financial statements of EIP Liisingu A.S. reflect total assets
constituting 99% of the consolidated total as of December 31, 1998, total
revenues constituting 100% of the consolidated totals for the years ended
December 31, 1998 and 1997 and total costs and expenses constituting 11% and
100% of the consolidated totals for the years ended December 31, 1998 and 1997,
respectively. Those statements were audited by other auditors whose report has
been furnished to us, and our opinion, insofar as it relates to amounts included
for EIP Liisingu A.S., is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of First Capital International, Inc.
as of December 31, 1998, and the results of its operations and its cash flows
for each of the two years in the period then ended in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Ham, Langston & Brezina, L.L.P.
Houston, Texas
April 21, 1999

F-3
<PAGE>
PRICEWATERHOUSECCOPERS PWC

AS PricewaterhouseCoopers
Narva mnt. 9A
10117 Tallinn
Estonia
Telephone +(372) 6 141 800
Facsimile +(372) 6 141 900

RE PORT OF INDEPENDENT ACCOUNTANTS

To the shareholders of EIP Liisingu AS

We have audited the financial statements of EIP Liisingu AS for the years ended
31 December 1998 and 1997 as set out on pages 1 to 13. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion the financial statements present fairly, in all material
respects, the financial position of the EIP Liisingu AS at 31 December 1998 and
1997 and the results of its operations and its cash flows for the years then
ended in comformity with accounting principles generally accepted in the United
States of America.

As discussed in note 14 to the Financial Statements, the equity of EIP Liisingu
AS is negative. The owners of EIP Liisingu AS plan to increase the share
capital to the extent that equity will be in accordance with Estonian Commercial
Code. Based on the these planned actions the management of EIP Lissingu AS
prepared the financial statements on a going concern basis.

/s/ AS PricewaterhouseCoopers

AS PricewaterhouseCoopers

9 March 1999

F-3A
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
__________

ASSETS
------
<S> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . $ 61,467
Lease receivables, net. . . . . . . . . . . 107,200
Accounts and notes receivable, net. . . . . 8,862
Prepaid expenses. . . . . . . . . . . . . . 6,974
Assets held for sale. . . . . . . . . . . . 18,958
----------

Total current assets. . . . . . . . . . . 203,461

Lease receivables . . . . . . . . . . . . . . 119,339

Accounts and notes receivable, net. . . . . . 3,082

Property and equipment, net . . . . . . . . . 9,519
----------

Total assets. . . . . . . . . . . . . . $ 335,401
==========

LIABILITIES AND STOCKHOLDERS' DEFICIT
- ---------------------------------------------

Current liabilities:
Note payable-related party. . . . . . . . . $ 105,958
Accounts payable. . . . . . . . . . . . . . 21,276
Accrued liabilities . . . . . . . . . . . . 5,225
----------

Total current liabilities . . . . . . . . 132,459

Long-term debt-related party. . . . . . . . . 333,641
----------

Total liabilities . . . . . . . . . . . 466,100
----------

Commitments and contingencies

Stockholders' deficit:
Common stock, $0.001 par value; 100,000,000
shares authorized; 55,751,142 shares
issued and outstanding. . . . . . . . . . 55,751
Additional paid-in capital. . . . . . . . . 681,746
Accumulated deficit . . . . . . . . . . . . (865,340)
Accumulated foreign currency translation
adjustments . . . . . . . . . . . . . . . (2,856)
----------

Total stockholders' deficit . . . . . . (130,699)
----------

Total liabilities and stockholders'
deficit . . . . . . . . . . . . . . $ 335,401
==========
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
__________

YEAR ENDED DECEMBER 31,
--------------------------
1998 1997
------------ ------------
<S> <C> <C>
Revenue:
Interest income . . . . . . . . . . . $ 43,822 $ 109,628
Other operating revenue . . . . . . . 13,352 23,244
------------ ------------

Total revenue . . . . . . . . . . . 57,174 132,872
------------ ------------

Costs and expenses:
Operating, general and administrative
expenses. . . . . . . . . . . . . . 257,745 82,146
Stock and option based compensation . 546,822 -
Depreciation and amortization . . . . 8,563 12,109
Interest expense. . . . . . . . . . . 70,845 65,570
Other expense, net. . . . . . . . . . 303 -
------------ ------------

Total costs and expenses. . . . . . (884,278) 159,825
------------ ------------

Net loss. . . . . . . . . . . . . . . . $ (827,104) $ (26,953)
============ ============

Basic and dilutive net loss per
common share. . . . . . . . . . . . . $ (0.03) $ (0.00)
============ ============

Weighted average shares outstanding . . 24,477,471 12,651,142
============ ============
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
__________

FOREIGN COMPRE-
ADDITIONAL CURRENCY HENSIVE
COMMON STOCK PAID-IN ACCUMULATED TRANSLATION INCOME
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT (LOSS)
------- --------- -------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996. 50 $ 40,241 $ - $ (11,283) $ - $ 28,958
----------

Net loss - - (26,953) - (26,953)

Other comprehensive income-
foreign currency transla-
tion adjustment - - - (3,125) (3,125)
----------

Comprehensive income (30,078)
----------

Reverse 1 for 25 stock split
and subsequent cancellation
of shares . . . . . . . . . (48) (38,631) 38,631 - - -

Common stock issued for cash. 8 5,780 - - - -
------- --------- -------- ------------- ------------- ----------

Balance at December 31, 1997. 10 7,390 38,631 (38,236) (3,125) (1,120)
----------

Net loss - - (827,104) - (827,104)

Other comprehensive income-
foreign currency transla-
tion adjustment - - - 269 269
----------

Comprehensive income (826,835)
----------

Common stock issued for cash
before recapitalization . . 30 21,314 376 - - -
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT, CONTINUED
__________

FOREIGN COMPRE-
ADDITIONAL CURRENCY HENSIVE
COMMON STOCK PAID-IN ACCUMULATED TRANSLATION INCOME
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT (LOSS)
---------- ------- --------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Recapitalization effective
September 17, 1998. . . . . . 46,651,102 17,947 (17,947) - - -

Common stock issued for cash
and services after recapital-
ization . . . . . . . . . . . 9,100,000 9,100 510,600 - - -

Stock options issued to
officers below fair market
value - 50,000 - - -

Value of conversion feature on
convertible debt. . . . . . . - - 100,086 - - -
---------- ------- --------- ------------- ------------- ----------

Balance at December 31, 1998. . 55,751,142 $55,751 $681,746 $ (865,340) $ (2,856) $(827,955)
========== ======= ========= ============= ============= ==========
</TABLE>

See notes to consolidated financial statements.

F-7
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
__________

YEAR ENDED DECEMBER 31,
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . $(827,104) $ (26,953)
Adjustment to reconcile net loss to net
cash used in operating activities:
Loss from sale of property and equipment . . . - 304
Depreciation expense . . . . . . . . . . . . . 8,563 12,109
Provision for bad debts. . . . . . . . . . . . 53,148 -
Common stock and stock options issued for
services . . . . . . . . . . . . . . . . . . 546,822 -
Amortization of discount on note payable-
related party. . . . . . . . . . . . . . . . 39,234 -
Change in operating assets and liabilities:
Lease receivables. . . . . . . . . . . . . . 28,187 257,925
Accounts receivable. . . . . . . . . . . . . 14,612 242,649
Prepaid expenses . . . . . . . . . . . . . . 67 -
Assets held for sale . . . . . . . . . . . . (18,958) -
Accounts payable . . . . . . . . . . . . . . 18,157 (60,988)
Accrued liabilities. . . . . . . . . . . . . (53,295) (21,782)
---------- ----------

Net cash provided by (used in)
operating activities . . . . . . . . . . (190,567) 403,264
---------- ----------

Cash flows from investing activities:
Proceeds from sale of property and equipment . . 138 9,721
Capital expenditures . . . . . . . . . . . . . . - (9,041)
---------- ----------

Net cash provided by investing
activities . . . . . . . . . . . . . . . 138 680
---------- ----------

Cash flows from financing activities:
Proceeds from notes payable and related
conversion feature . . . . . . . . . . . . . . 166,810 -
Proceeds from sale of common stock . . . . . . . 44,568 (5,780)
Payments on notes payable. . . . . . . . . . . . - (354,354)
---------- ----------

Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . 211,378 (360,134)
---------- ----------

Effects of exchange rate changes on cash . . . . . (1,774) (1,518)
---------- ----------

Net increase in cash and cash equivalents. . . . . 19,175 42,292

Cash and cash equivalents, beginning
of year. . . . . . . . . . . . . . . . . . . . . 42,292 -
---------- ----------

Cash and cash equivalents, end of year . . . . . . $ 61,467 $ 42,292
========== ==========

Supplemental disclosure of cash flow information:

Cash paid for interest . . . . . . . . . . . . . $ 31,611 $ 65,570
========== ==========
</TABLE>

See notes to consolidated financial statements.

F-8
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------

First Capital International, Inc. (the "Company"), formerly Ranger/USA, Inc.,
assumed its current name in August 1998 when new management took over the
Company which, at the time, had no existing operations, and began implementation
of a new business plan. The Company is now involved primarily in the
identification, acquisition and operation of businesses serving or focussed on
Central and Eastern European markets. To date, the Company's initial business
has been EIP Liisingu AS, an Estonian company that provides lease financing of
real estate, motor vehicles and equipment. The Company is currently identifying
additional acquisition targets that are involved in the financial services or
high technology sectors (See Note 2) and is devoting substantial resources to
the development of a virtual shopping mall, PlazaRoyal.com, for deployment on
the Internet.

PRINCIPLES OF CONSOLIDATION
-----------------------------

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries after elimination of all significant intercompany
accounts and transactions.

MANAGEMENT ESTIMATES
---------------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. These
estimates mainly involve the useful lives of property and equipment, the
valuation of deferred tax assets and the realizability of accounts receivable.

REVENUE RECOGNITION
--------------------

Interest income is recognized using the interest method over the terms of
underlying leases. Other operating revenue is recognized at the time services
are provided.

CONCENTRATIONS OF CREDIT RISK
--------------------------------

Cash and accounts and lease receivables are the primary financial instruments
that subject the Company to concentrations of credit risk. The Company
maintains its cash in banks selected based upon management's assessment of the
bank's financial stability. Cash balances are currently maintained in banks in
Estonia and the United States. Cash balances in U.S. banks may periodically
exceed the $100,000 federal depository insurance limit.

Continued
F-9
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------

CONCENTRATIONS OF CREDIT RISK, CONTINUED
--------------------------------------------

Accounts and leases receivable arise primarily from transactions with customers
in Estonia. The Company performs credit reviews of its customers and provides a
reserve for accounts where collectibility is uncertain. Collateral is required
for credit granted in connection with certain lease transactions.

CASH EQUIVALENTS
-----------------

For purposes of reporting cash flows, the Company considers all short-term
investments with an original maturity of three months or less to be cash
equivalents.

PROPERTY AND EQUIPMENT
------------------------

Equipment is stated at cost. Depreciation is computed principally by the
straight-line method over the estimated useful lives of 2 to 5 years for office
furniture and equipment and 2 to 3 years for machinery and equipment.

IMPAIRMENT OF LONG-LIVED ASSETS
----------------------------------

In the event that facts and circumstances indicate that the carrying value of a
long-lived asset, including associated intangibles, may be impaired, an
evaluation of recoverability is performed by comparing the estimated future
undiscounted cash flows associated with the asset to the asset's carrying amount
to determine if a write-down to market value or discounted cash flow is
required.

INCOME TAXES
-------------

The Company uses the liability method in accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and income tax carrying amounts of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

FAIR VALUE OF FINANCIAL INSTRUMENTS
---------------------------------------

The Company includes fair value information in the notes to financial statements
when the fair value of its financial instruments is different from the book
value. When the book value approximates fair value, no additional disclosure is
made.

Continued
F-10
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------

FOREIGN CURRENCY TRANSLATION
------------------------------

The Company has determined that the local currency is the functional currency
for its Estonian subsidiary under Financial Accounting Standards Board Statement
No. 52, "Foreign Currency Translation" (FAS 52). Under FAS 52, assets and
liabilities denominated in foreign functional currencies are translated at the
exchange rate as of the balance sheet date. Translation adjustments are
recorded as a separate component of stockholders' deficit. Revenues, costs and
expenses denominated in foreign functional currencies are translated at the
weighted average exchange rate for the period.

COMPREHENSIVE INCOME
---------------------

Effective January 1, 1998 the Company adopted FAS 130, "Reporting Comprehensive
Income". FAS 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. It requires (a)
classification of the components of other comprehensive income by their nature
in a financial statement and (b) the display of the accumulated balance of the
other comprehensive income separate from retained earnings and additional
paid-in capital in the equity section of a statement of financial position.
Prior years financial statements have been reclassified to conform to these
requirements.

2. RECAPITALIZATION
----------------

On September 28, 1998 First Capital International, Inc. was acquired by EIP
Liisingu AS ("EIP"), an Estonian corporation, in a recapitalization transaction
accounted for similar to a reverse acquisition, except that no goodwill was
recorded. First Capital International, Inc. was the "acquired" company in the
transaction, but remains the surviving legal entity. Prior to the acquisition
First Capital International, Inc.

Continued
F-11
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

2. RECAPITALIZATION, CONTINUED
----------------------------

was a non-operating public shell corporation with no significant assets.
Accordingly, the transaction was treated as an issuance of stock by First
Capital International, Inc. for EIP's net monetary assets, accompanied by a
recapitalization. In connection with this transaction, First Capital
International, Inc. issued 34,000,000 shares of common stock in exchange for all
outstanding shares of EIP. Since this transaction is in substance, a
recapitalization of EIP and not a business combination, proforma information is
not presented and a valuation of the company was not performed.

In connection with the recapitalization transaction described in the previous
paragraph, the outstanding common stock of First Capital International, Inc. was
essentially substituted for the common stock of EIP and the difference was
included in additional paid-in capital.

3. GOING CONCERN CONSIDERATIONS
------------------------------

During the years ended December 31, 1998 and 1997, the Company has been
dependent on debt and equity raised from individual investors and related
parties to sustain its operations. During the years ended December 31, 1998 and
1997, the Company incurred net losses of $827,104 and $26,953, respectively.
Also, during the year ended December 31, 1998, the Company had negative cash
flows from operations of $190,567. These factors along with a stockholders'
deficit of $130,699 at December 31, 1998 raise substantial doubt about the
Company's ability to continue as a going concern.

Management has specific plans to address the financial situation as follows:

In the near term the Company plans a private placement of its common stock
to qualified investors to fund its current operations.

In the intermediate term, the Company plans to file a Form 10SB and become
a full reporting company under the Securities and Exchange Act of 1934.
Management believes this step will provide a market for its common stock and
provide a means of obtaining future funds necessary to implement its business
plan.

Continued
F-12
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

3. GOING CONCERN CONSIDERATIONS, CONTINUED
------------------------------------------

In the long-term, the Company believes that cash flows from acquired
businesses and businesses that it is currently developing will provide the
resources for its continued operations. The Company is currently developing a
virtual mall for launch on the Internet. Management believes that revenues from
this virtual mall, if successfully launched, will more than cover overhead at
the corporate level. Acquisition activities and development of the Company's
internet project resulted in corporate headquarters accounting for 95% of the
Company's total net loss in 1998.

There can be no assurance that the Company's planned private placement of equity
securities or its planned full public reporting status will be successful or
that the Company will have the ability to implement its business plan and
ultimately attain profitability. The Company's long-term viability as a going
concern is dependent upon three key factors, as follows:

The Company's ability to obtain adequate sources of debt or equity funding
to meet current commitments and fund the continuation of its business
operations.

The ability of the Company to acquire or internally develop viable
businesses.

The ability of the Company to ultimately achieve adequate profitability and
cash flows from operations to sustain its operations.

4. ACCOUNTS AND NOTES RECEIVABLE
--------------------------------

Accounts and notes receivable at December 31, 1998 were as follows:

<TABLE>
<CAPTION>
<S> <C>
Trade accounts receivable. . . . . . . . . $ 6,618
Notes receivable . . . . . . . . . . . . . 4,042
Accrued interest receivable. . . . . . . . 3,537
Other. . . . . . . . . . . . . . . . . . . 409
-------

14,606
Less allowance for doubtful accounts . . . 2,662
-------

11,944
Less current portion of accounts and notes
receivable . . . . . . . . . . . . . . . 8,862
-------

$ 3,082
=======
</TABLE>

Continued
F-13

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

5. INVESTMENT IN DIRECT FINANCING LEASES
-----------------------------------------

The Company owns and leases various buildings, transportation and other
equipment under leases that meet the criteria to be classified as direct
financing leases. Assets owned and leased under direct financing leases are
carried at the Company's gross investment in the lease less unearned income.
Unearned income is recognized in such a manner as to produce a constant periodic
rate of return on the net investment in the direct financing lease.

The components of the Company's investment in direct financing leases at
December 31, 1998 were as follows:

<TABLE>
<CAPTION>
<S> <C>
Lease contracts receivable (net of
accounts reserved of $5,439) . . . . $280,986
Less unearned income . . . . . . . . . 54,447
--------

Investment in direct financing leases. $226,539
========
</TABLE>

The minimum lease payment receivables under noncancellable leasing arrangements
at December 31, 1998 were as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- --------------
<S> <C>
1999. . . . . . . . . . . . . . . . $133,092
2000. . . . . . . . . . . . . . . . 91,716
2001. . . . . . . . . . . . . . . . 50,700
2002. . . . . . . . . . . . . . . . 5,478
--------

Net minimum lease receipts. . . . . 280,986

Less unearned income. . . . . . . . 54,447
--------

Net investment in direct financing
leases. . . . . . . . . . . . . . 226,539

Less current portion. . . . . . . . 107,200
--------

119,339
========
</TABLE>

Continued
F-14
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

6. PROPERTY AND EQUIPMENT
------------------------

Property and equipment at December 31, 1998 was as follows:

<TABLE>
<CAPTION>
<S> <C>
Transportation equipment. . . $24,111
Office equipment. . . . . . . 4,934
-------

29,045
Less accumulated depreciation 19,526
-------

$ 9,519
=======
</TABLE>

7. NOTE PAYABLE AND LONG-TERM DEBT-RELATED PARTY
--------------------------------------------------

Notes payable and long-term debt at December 31, 1998 were as follows:

Note payable to a related foreign corpora-
tion under a $300,000 line of credit,
bearing interest at a stated rate of 8.0%
per year and currently due February 1,
1999. This note includes provisions under
which it may, at the option of the Company,
be converted to restricted shares of the
Company's common stock based at a conver-
sion price of $0.025 per share. The con-
version price at the date the note was
negotiated was below the fair value of
the Company's common stock. Accordingly,
the note was issued at a discount of
$100,086 and such discount is being amor-
tized to interest expense from the date
of individual draws under the line of
credit to the date of maturity, resulting
in an effective interest rate of approx-
imately 1600%. In February 1999 this note
was converted to common stock. $105,958

Continued
F-15

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

7. NOTE PAYABLE AND LONG-TERM DEBT-RELATED PARTY, CONTINUED
--------------------------------------------------------------

Note payable to EIP's former parent company,
bearing interest at 10% per year and due
in monthly payments of interest only
through May 2002, at which date the en-
tire principal balance is payable. This
note is collateralized by substantially
all of EIP's property and equipment and
leased assets excluding buildings and
transportation equipment. 333,641
--------

439,599
Less current portion 105,958
--------

$333,641
========

Future maturities of notes payable and long-term debt at December 31, 1999 were
as follows:

YEAR ENDING
DECEMBER 31,
------------

1999 $105,958
2000 -
2001 -
2002 333,641
--------

$439,599
========

Continued
F-16
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

8. INCOME TAXES
-------------

The Company has incurred losses since its inception and, therefore, has not been
subject to federal income taxes. As of December 31, 1998, the Company had net
operating loss ("NOL") carryforwards for income tax purposes of approximately
$480,000 which expire in 2008 through 2018. Under the provisions of Section 382
of the Internal Revenue Code the greater than 50% ownership change in the
Company in connection with the reverse merger with EIP (See Note 2) severely
limits the Company's ability to utilize the NOL carryforward to reduce future
taxable income and related tax liabilities. Additionally, because United States
tax laws limit the time during which NOL carryforwards may be applied against
future taxable income, the Company will not be able to take full advantage of
its NOL for federal income tax purposes should the Company generate taxable
income.

The composition of deferred tax assets and the related tax effects at December
31, 1998 are as follows:

<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Net operating losses. . . . . . . . $ 163,200
Allowance for doubtful accounts and
notes receivable. . . . . . . . . 2,754
Valuation allowance . . . . . . . . (165,954)
----------

Net deferred tax assets . . . . . $ -
==========
</TABLE>

The difference between the income tax benefit in the accompanying statement of
operations and the amount that would result if the U.S. Federal statutory rate
of 34% were applied to pre-tax loss is as follows (amounts in thousands):

<TABLE>
<CAPTION>
1998 1997
------------------- ----------------
AMOUNT % AMOUNT %
- ----------------------------- ---------- ------- -------- ------
<S> <C> <C> <C> <C>
Benefit for income tax at
federal statutory rate. . $ 281,215 34.0 $ 9,164 34.0
Non-deductible compensation (199,259) (24.1) - -
Increase in valuation
allowance . . . . . . . . (81,956) (9.9) (9,164) (34.0)
---------- ------- -------- ------

$ - - $ - -
========== ======= ======== ======
</TABLE>

Continued
F-17
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

9. STOCKHOLDER'S EQUITY
---------------------

On April 1, 1999 the Company authorized 10,000,000 shares of serial preferred
stock for which the Company's Board of Directors may designate voting power,
preferences, limitations and restrictions.

During the year ended December 31, 1998, the Company sold and issued, above the
number of existing shares outstanding, a total of 43,100,000 shares of common
stock.

In order to remain within the constraints of authorized shares on August 28,
1998, the Company adopted amendments to its certificate of incorporation to (i)
increase the authorized capital stock of the corporation from 50,000,000 shares
to 100,000,000 shares and (ii) decrease the par value of common stock from $0.01
to $0.001 per share.

During the year ended December 31, 1997, the Company, prior to the
recapitalization transaction described in Note 2, initiated a 1 for 25 reverse
stock split.

10. STOCK OPTIONS
--------------

During the year ended December 31, 1998, the Company issued non-qualified
options to employees, officers and directors of the Company that will allow them
to immediately acquire a total of 4,250,000 shares of the Company's common stock
at prices ranging from $0.05 to $0.10 per share. The table below summarizes the
annual activity in the Company's stock options:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
OPTIONS PRICE
--------- ------
<S> <C> <C>
Balance at December 31, 1996
and 1997 . . . . . . . . . - $ -

Granted. . . . . . . . . . 4,250,000 0.05
Canceled . . . . . . . . . - -
Exercised. . . . . . . . . - -
--------- ------

Balance at December 31, 1998 4,250,000 $ 0.05
========= ======
</TABLE>

Continued
F-18
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

10. STOCK OPTIONS, CONTINUED
--------------------------

The Company utilizes the disclosure-only provisions of SFAS No. 123 "Accounting
for Stock-Based Compensation" and applies Accounting Principles Board ("APB")
Opinion No. 25 and related interpretations in accounting for its stock option
plans. Under APB No. 25, because the exercise prices of the Company's employee
stock options were less than the market prices of the underlying Company stock
on the date of grant, compensation expense totaling $50,000 has been recognized
in these financial statements to reflect the value of stock options granted as
compensation.

Had the Company elected to recognize compensation cost for stock options based
on the calculated fair value at the grant dates, consistent with the method
prescribed by SFAS No. 123, net income (loss) per share would have reflected the
proforma amounts indicated below:

<TABLE>
<CAPTION>
1998 1997
---------- ---------
<S> <C> <C>
Net loss
as reported. . . . . . . . . . . . . . $(827,104) $(26,953)
proforma . . . . . . . . . . . . . . . (912,421) (26,953)
Basic and diluted net loss per share (0.03) (0.00)
</TABLE>

The fair values of the stock options are estimated on the dates of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions for options granted in 1998:

<TABLE>
<CAPTION>
<S> <C>
Dividend yield. . . . . 0.0%
Expected volatility . . 70.0%
Risk-free interest rate 4.9%
Expected holding period 2 years
</TABLE>

The table below summarizes information regarding Company stock options
outstanding and exercisable as of December 31, 1998:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
REMAINING AVERAGE
CONTRACTUAL EXERCISE
EXERCISE PRICE SHARES LIFE PRICE
- --------------- ---------- ----------- --------
<S> <C> <C> <C>
0.05 . . . . . 4,000,000 2.66 $ 0.05
0.10. . . . . . 250,000 2.66 0.10
</TABLE>

Continued
F-19
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

11. RELATED PARTY TRANSACTIONS
----------------------------

During the years ended December 31, 1998 and 1997, the Company engaged in
certain related party transactions as follows:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Direct financing leases with
officers and directors of EIP:

Total lease contract amount . . . $ 3,792 $ 1,066
Balance of lease receivable at
year end. . . . . . . . . . . . $ 1,050 $ 169
Interest rate . . . . . . . . . . 15% 10%

Interest incurred on long-term debt
to former parent of EIP . . . . . $31,611 $69,613
</TABLE>

During 1998 the Company began subleasing office space from a company 100% owned
by the Company's president. The sublease is on a month-to-month basis and
provides for monthly payments of $2,343. Total rent expense recognized with
respect to this lease during 1998 was $9,372.

12. LITIGATION
----------

The Company is a party to certain litigation arising in the normal course of
business. Management believes that such litigation will not have a material
impact on the Company.

13. IMPACT OF THE YEAR 2000 ISSUE
----------------------------------

The Year 2000 issue is the result of computer programs and hardware with
embedded date technology using two digits to define the applicable year rather
than four. Any programs or hardware that are time sensitive and have not been
determined to be Year 2000 compliant may recognize a date using "00" as the year
1900 rather than the year 2000. Such improper date recognition could, in turn,
result in erroneous processing of data, or, in extreme situations, system
failure.

The Company is currently implementing a Year 2000 program which encompasses
performing an inventory of information technology and non-information technology
systems, assessing the potential problem areas, testing the systems for Year
2000 readiness, and modifying systems that are not Year 2000 compliant.

Continued
F-20
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
__________

13. IMPACT OF THE YEAR 2000 ISSUE, CONTINUED
----------------------------------------------

To date, inventory and assessment are in progress for all core systems that are
essential for business operations. The Company believes all of its core systems
are Year 2000 compliant. Because many of the Company's systems are new and
designed to be year 2000 compliant, the Company's management estimates that the
work they have completed represents more than seventy-five percent of the work
involved in preparing the Company's systems for the Year 2000.

Although the Company expects to be ready to continue business activities without
interruption by a Year 2000 problem, Company management recognizes the general
uncertainty inherent in the Year 2000 issue, in part because of the uncertainty
about the Year 2000 readiness of third parties, particularly in Estonia and
other Eastern European countries. Under a "worst case Year 2000 scenario", it
may be necessary for the Company to temporarily interrupt normal business
activities or operations and to seek outside financing for cash flow problems
brought on by customer payment problems. The Company believes that such
circumstances could result in a material adverse impact to its operations and in
its current financial position, threaten its continued existence. The Company
has begun, but not yet completed, development of a contingency plan to deal with
the "most likely worst case Year 2000 scenario". The contingency plan is
expected to be completed during the fourth quarter of 1999.

Based on a current assessment, the Company's total cost of becoming Year 2000
compliant is not expected to be significant to its financial position, results
of operations or cash flows and is estimated to be less than $10,000.

14. SEGMENT AND GEOGRAPHIC INFORMATION
-------------------------------------

The Company currently operates in the equipment and real estate direct financing
lease business but is actively seeking qualified businesses to acquire. The
Company's two reportable segments are based upon geographic area and type of
business. All of the Company's foreign operations are currently conducted by
EIP in Estonia. EIP operates with the Estonian kroon as its functional
currency.

Continued
F-21
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

14. SEGMENT AND GEOGRAPHIC INFORMATION, CONTINUED
-------------------------------------------------

The corporate component of operating income (loss) represents corporate general
and administrative expenses. Corporate assets include cash and cash
equivalents.

Following is a summary of segment information:

<TABLE>
<CAPTION>
1998 1997
---------- ---------
<S> <C> <C>
Net Revenue:
United States - Corporate. . $ - $ -
Estonia - Leasing. . . . . . 57,174 132,872
---------- ---------

Total net revenue. . . . . $ 57,174 $132,872
========== =========

Depreciation and Amortization:
United States - Corporate. . $ - $ -
Estonia - Leasing. . . . . . 8,563 12,109
---------- ---------

Total depreciation and
amortization . . . . . . $ 8,563 $ 12,109
========== =========

Loss from Operations:
United States - Corporate. . $(788,413) $ -
Estonia - Leasing. . . . . . (38,691) (26,953)
---------- ---------

Total loss from operations $(827,104) $(26,953)
========== =========

Assets:
United States - Corporate. . $ 906 $ -
Estonia - Leasing. . . . . . 334,495 324,293
---------- ---------

Total assets . . . . . . . $ 335,401 $324,293
========== =========

Capital Expenditures:
United States - Corporate. . $ - $ -
Estonia - Leasing. . . . . . 138 9,721
---------- ---------

Total capital expenditures $ 138 $ 9,721
========== =========
</TABLE>

Continued
F-22
<PAGE>

FIRST CAPITAL INTERNATIONAL, INC.
__________

CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)

F-1

<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
TABLE OF CONTENTS
__________

PAGE(S)
-------
<S> <C>
Unaudited Financial Statements

Consolidated Balance Sheet as of March 31,
1999 and December 31, 1998 . . . . . . . . . . . . F-3

Consolidated Statement of Operations for the
three months ended March 31, 1999 and 1998 . . . . F-4

Consolidated Statement of Stockholders' Deficit
for the three months ended March 31, 1999 and 1998 F-5

Consolidated Condensed Statement of Cash Flows
for the three months ended March 31, 1999 and 1998 F-6

Selected Notes to Consolidated Financial Statements. . F-7
</TABLE>

F-2
<PAGE>

<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 1999 AND DECEMBER 31, 1998
__________

MARCH 31, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED) (NOTE)
- ------------------------------------------------ ------------ --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . $ 91,539 $ 61,467
Lease receivables, net . . . . . . . . . . . . 91,269 107,200
Other. . . . . . . . . . . . . . . . . . . . . 21,908 34,794
------------ --------------

Total current assets . . . . . . . . . . . . 204,716 203,461

Lease receivables. . . . . . . . . . . . . . . . 101,102 119,339

Accounts and notes receivable, net . . . . . . . 2,595 3,082

Property and equipment, net. . . . . . . . . . . 6,774 9,519
------------ --------------

Total assets . . . . . . . . . . . . . . . $ 315,187 $ 335,401
============ ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT
- ------------------------------------------------

Current liabilities:
Note payable to a related party. . . . . . . . $ 32,013 $ 105,958
Accounts payable and accrued liabilities . . . 3,649 26,501
------------ --------------

Total current liabilities. . . . . . . . . . 35,662 132,459

Long-term debt to a related party. . . . . . . . 306,646 333,641
------------ --------------

Total liabilities. . . . . . . . . . . . . 342,308 466,100
------------ --------------

Commitments and contingencies

Stockholders' deficit:
Common stock, $0.001 par value; 100,000,000
shares authorized; 65,023,142 and 55,751,142
shares issued and outstanding at March 31,
1999 and December 31, 1998, respectively . . 65,021 55,751
Additional paid-in capital . . . . . . . . . . 1,043,154 681,746
Accumulated deficit. . . . . . . . . . . . . . (1,134,556) (865,340)
Accumulated foreign currency translation
adjustments. . . . . . . . . . . . . . . . . (740) (2,856)
------------ --------------

Total stockholders' deficit. . . . . . . . (27,121) 130,699)
------------ --------------

Total liabilities and stockholders'
deficit. . . . . . . . . . . . . . . . $ 315,187 $ 335,401
============ ==============
<FN>
Note: The consolidated balance sheet at December 31, 1998 has been derived from
the audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. See accompanying notes.
</TABLE>

F-3
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
__________
(UNAUDITED)

THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Revenue:
Interest income . . . . . . . . . . . $ 10,470 $ 10,700
Other operating revenue . . . . . . . 2,476 2,105
------------ ------------

Total revenue . . . . . . . . . . . 12,946 12,805
------------ ------------

Costs and expenses:
Operating, general and administrative
expenses. . . . . . . . . . . . . . 65,656 4,152
Stock and option based compensation . 142,574 -
Depreciation and amortization . . . . 2,057 2,085
Interest expense. . . . . . . . . . . 69,012 7,597
Other expense, net. . . . . . . . . . 2,863 2,032
------------ ------------

Total costs and expenses. . . . . . 282,162 15,866
------------ ------------

Net loss. . . . . . . . . . . . . . . . $ (269,216) $ (3,061)
============ ============

Basic and dilutive net loss per
common share. . . . . . . . . . . . . $ (0.00) $ (0.00)
============ ============

Weighted average shares outstanding . . 61,107,031 46,651,142
============ ============
</TABLE>

See accompanying notes.

F-4
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 1999
__________
(UNAUDITED)

FOREIGN COMPRE-
ADDITIONAL CURRENCY HENSIVE
COMMON PAID-IN ACCUMULATED TRANSLATION INCOME
STOCK CAPITAL DEFICIT ADJUSTMENT (LOSS)
------- ----------- ---------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998. $55,751 $ 681,746 $ (865,340) $ (2,856) $ (827,955)

Net loss. . . . . . . . . . . - - (269,216) - (215,967)

Other comprehensive income-
foreign currency transla-
tion adjustment . . . . . . - - - 2,116 2,116
------------

Comprehensive income (213,851)
------------

Common stock issued
(9,272,000 shares). . . . . 9,270 358,908 - - -

Stock options issued to an
officer at a below market
value conversion price. . . - 2,500 - - -
------- ----------- ---------------- ------------- ------------

Balance at March 31, 1999 . . $65,021 $ 1,043,154 $ (1,134,556) $ (740) $(1,041,806)
======= =========== ================ ============= ============
</TABLE>

See accompanying notes.

F-5
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
__________
(UNAUDITED)

THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
--------- --------
<S> <C> <C>
Cash flows from operating activities:. . . . $ 11,367 $29,260
--------- --------

Cash flows from financing activities:
Proceeds from sale of common stock . . . . 42,104 18,520
Payments on notes payable. . . . . . . . . (24,207) (9,598)
--------- --------

Net cash provided by financing
activities . . . . . . . . . . . . 17,897 8,922
--------- --------

Effects of exchange rate changes on cash . . 808 -
--------- --------

Net increase in cash and cash equivalents. . 30,072 38,182

Cash and cash equivalents, beginning
of period. . . . . . . . . . . . . . . . . 61,467 42,242
--------- --------

Cash and cash equivalents, end of period . . $ 91,539 $80,424
========= ========

Non-cash investing and financing activities:

Conversion of note payable to a related
party to common stock. . . . . . . . . . $186,000 $ -
</TABLE>

See accompanying notes.

F-6
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________

1. INTERIM FINANCIAL STATEMENTS
------------------------------

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month periods ended March 31,
1999 and 1998 are not necessarily indicative of the results that may be expected
for the respective full years.

A summary of the Company's significant accounting policies and other information
necessary to understand these consolidated interim financial statements is
presented in the Company's audited financial statements for the years ended
December 31, 1998 and 1997. Accordingly, the Company's audited financial
statements should be read in connection with these financial statements.

2. INCOME TAXES
-------------

The difference between the 34% federal statutory income tax rate shown in the
accompanying interim financial statements is primarily attributable to an
increase in the valuation allowance applied against the tax benefit from
utilization of net operating loss carryforwards.

3. STOCKHOLDERS' EQUITY
---------------------

During the quarter ended March 31, 1999, the Company issued shares of common
stock and had other increases to stockholders' equity as follows:

F-7
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________

3. STOCKHOLDERS' EQUITY, CONTINUED
---------------------------------

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN
STOCK CAPITAL TOTAL
------- ----------- --------
<S> <C> <C> <C>
Common stock issued for cash . $ 1,830 $ 40,274 $ 42,104

Compensation recognized on
common stock issued to of-
ficers and employees at
below market value . . . . . - 140,074 140,074

Common stock issued in payment
of note payable to a related
party. . . . . . . . . . . . 7,440 178,560 186,000
------- ----------- --------

$ 9,270 $ 358,908 $368,178
======= =========== ========
</TABLE>

4. SEGMENT AND GEOGRAPHIC INFORMATION
-------------------------------------

The corporate component of operating loss represents corporate general and
administrative expenses and expenses incurred in developing the Company's
internet site. Corporate assets include cash and cash equivalents.

Following is a summary of segment information:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------
1999 1998
------- -------
<S> <C> <C>
Net Revenue:
United States - Corporate $ - $ -
Estonia - Leasing . . . . 12,946 12,805
------- -------

Total net revenue . . . $12,946 $12,805
======= =======
</TABLE>

F-8
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________

4. SEGMENT AND GEOGRAPHIC INFORMATION, CONTINUED
-------------------------------------------------

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------
1999 1998
-------- ------
<S> <C> <C>
Loss from Operations:
United States - Corporate. . $264,668 $ -
Estonia - Leasing. . . . . . 4,548 3,061
-------- ------

Total loss from operations $269,216 $3,061
======== ======
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
---------- -------------
<S> <C> <C>
Assets:
United States - Corporate $ 21,081 $ -
Estonia - Leasing . . . . 294,106 335,401
---------- -------------

Total assets. . . . . . $ 315,187 $ 335,401
========== =============
</TABLE>

F-9
<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 61467
<SECURITIES> 0
<RECEIVABLES> 107200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 203461
<PP&E> 29045
<DEPRECIATION> 19526
<TOTAL-ASSETS> 335401
<CURRENT-LIABILITIES> 132459
<BONDS> 333641
<COMMON> 55751
0
0
<OTHER-SE> (186450)
<TOTAL-LIABILITY-AND-EQUITY> 335401
<SALES> 0
<TOTAL-REVENUES> 57174
<CGS> 0
<TOTAL-COSTS> 813130
<OTHER-EXPENSES> 303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70845
<INCOME-PRETAX> (827104)
<INCOME-TAX> 0
<INCOME-CONTINUING> (827104)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (827104)
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 91539
<SECURITIES> 0
<RECEIVABLES> 91269
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 204716
<PP&E> 29045
<DEPRECIATION> 22271
<TOTAL-ASSETS> 315187
<CURRENT-LIABILITIES> 35662
<BONDS> 306646
<COMMON> 65021
0
0
<OTHER-SE> (92142)
<TOTAL-LIABILITY-AND-EQUITY> 315187
<SALES> 0
<TOTAL-REVENUES> 12946
<CGS> 0
<TOTAL-COSTS> 210287
<OTHER-EXPENSES> 2863
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69012
<INCOME-PRETAX> (269216)
<INCOME-TAX> 0
<INCOME-CONTINUING> (269216)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (269216)
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>